Brooks Posted September 28, 2005 Posted September 28, 2005 due to my musical partners financial situation(he needs to show MORE income in order to get a house loan),to my chagrin we are about to start declaring all our gig income.are there some resources to help w/ tax tips for musicians?he needs to show more income, but i certianly don't!what/how do y'all make deductions, how do you depriciate expensive items, and any other tips y'all can think of would be greatly appreciated. i should add that i'm not a full time musician, gig income is small potatos compared to my day job salary.
hardheartedbill Posted September 28, 2005 Posted September 28, 2005 dude, I missed your message til now i'll call ya tonight
mc2 Posted September 28, 2005 Posted September 28, 2005 Why don't you let your pal declare himself "band leader" and claim BOTH your cuts of the pay? That way he bumps his reported income a lot higher to help himself and you can claim you just do it for fun filling in. The same gig $$ total would be the same and the IRS would be getting paid the same total tax for now. After your pal gets his mortgage, you can possibly return to your former arrangement of undeclared income...maybe change the band name to be safe, so there's less chance the IRS ever comes by. Better yet...tell your buddy to get a better mortgage broker who can get him his mortgage without having to make the band change!! (disclaimer...consult a real accountant for legal advice
SteveE9C6 Posted September 28, 2005 Posted September 28, 2005 Why is this a problem? Here is my suggestion. I am not a tax expert but I do pay a CPA to handle mine.First...1. Declare yourself an entertainment business. (Brooks Boneyard Entertainment)2. Set up a small area of your house strictly for office/rehearsal use.3. Keep records of utilities, home payments, etc.4. Keep records of all music related purchases.5. Keep mileage/fuel records.File and claim all income from your music. You will need to file a separate schedule for business. If you are meticulous with records you will almost certainly wind up losing money from a business view point.Again, do some reading and obtain competent tax/legal advice. I think most folks actually will lower their taxes by doing this.
Guitarseh Posted September 29, 2005 Posted September 29, 2005 I'm not an accountant, but have a little experience running some small businesses. If you do not turn a profit in 3 of the last five years, your music will generally be classified as a hobby, and you will only be able to deduct amounts up to your actual business expenses (so you can't declare a loss). There are additional requirements that basically add up to you having to show that you are really pursuing these activities for profit with some expectation of success. There are very clear pubs about all this on the IRS web site. The most important is:http://www.irs.gov/pub/irs-pdf/p535.pdfSee page 5 for more info, and consult with the pros if you really want to stay out of trouble.MarkB
Brooks Posted September 29, 2005 Author Posted September 29, 2005 There are very clear pubs about all this on the IRS web site. The most important is:http://www.irs.gov/pub/irs-pdf/p535.pdfSee page 5 for more info, and consult with the pros if you really want to stay out of trouble.MarkB this is what i'm talking about, thanx mark.
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