Taxes for Musicians

I know, it's not the most cheery of subjects.

Many musicians forget (or never even realize) that they have a different taxing process than many other citizens.

For example, if you've ever had a waitressing job, you know how to keep track of your cash tips and report them every year on your tax forms. Musicians have to keep track of tips and how much they're paid by different venues where they've performed.

Other things to keep in mind:

      -Double-check  whether you or anyone in your bands owes taxes in another state.

     -If you're touring outside the United States, you need to check regulations for the other countries you've passed through.

       -If you are making most of your living off your shows, your band is considered to have a 'Profit Motive' according to the IRS. This means it cannot be considered a hobby, and makes you liable for taxation.

      -W-2 forms have to be issued to band members if the band is considered a business by the IRS. The band members file taxes these with the typical 1040 individual tax-return form.

    -Along with the W-2s, musicians can use form  2106 to report business-related expenses (and reimbursements given from the band money-pot). Several purchases, ranging from travel expenses to instrument repair and even performance clothing are tax-deductible.




You can use either a logbook with a receipt-holder to keep track, or you can go electronic with bookkeeping software and scanned receipts. Just be certain that you do keep good records, because it is fairly likely that your music business will be audited at some point!



For some more detailed instruction, please check out this in-depth article published by Allegro.