Tax Deductions for Musicians: Unlocking the Benefits

Musicians have the opportunity to create beauty and harmony in their environment every day. The chance to do it for a living can be a dream come true, but navigating accounting, taxes, and business expenses can be confusing. 

If you work as a musician, you’re likely self-employed, a freelancer, or own a business. In that case, there are business deductions and allowed expense deductions you may take to reduce your taxable income. Continue reading to learn about tax deductions for musicians to help make tax preparation less stressful this year. 

Who Can Claim Musician Tax Deductions?

You can claim musician tax deductions if you work as a sole proprietor, freelancer, independent contractor, or self-employed musician. Likewise, if you own a business as a musician or have established an LLC for your music business, you may claim relevant business deductions. 

Common Tax Deductions for Musicians

Several deductions are specific to musicians, from studio or office expenses to the costs of instruments and performances. In addition, you may be eligible for general deductions like travel expenses, insurance, or advertising.  If you’re preparing business taxes for the first time, understanding tax write-offs for the self-employed or small business owners can help save time and protect your hard-earned revenue. Here’s what you need to know.  

Instruments and Performances

One of your biggest costs may be your instruments and performance fees. All expenses related to your instruments and performances are deductible expenses as a musician. Major expenses like instruments are considered capital expenses that you must depreciate over a few years. Small expenses can be deducted in a single year. 

Expenses to depreciate or deduct as a one-time expense include: 

• Instruments
• Cases
• Bows
• Music stands
• Sheet music 
• Instrument cleaning supplies, rosin, and other consumable supplies
• Stage rental fees

Studio or Workspace

This cost is a deductible business expense if you have a studio or workspace. Even if you don’t have a full-time studio, you can also deduct:

• Recording studio booking fees
• Rent for a teaching space
• Utility costs for a workspace
• Membership fees to professional associations, like the American Federation of Musicians

In addition, the costs of launching a business are deductible business expenses, including:

• LLC formation costs
• Business licenses
• Fees for a website, domain, hosting, and other costs

Musical Events

If you perform at the musical events you organize, stage rental, lighting, staff salaries, and payments to other musicians are all deductible business expenses. 

Likewise, if you attend sponsored events by industry associations like the National Association of Music Merchants (NAMM), your related expenses are deductible if you attend for business reasons. In addition, travel, lodgings, meals, and attendance fees are deductible business expenses.

Legal and Professional Fees

Professional and legal fees needed as part of your normal business operations may be deducted as a business expense. These include:

• Accounting services
• Legal services
• Software related to music editing or production
• Software related to accounting or scheduling
• Any other necessary software
• Other professionals fees

Travel Expenses

Travel reimbursements for temporary posts and out-of-pocket travel expenses qualify for tax-free reimbursements. If you must travel to a job site beyond your regular office, you may be able to deduct travel costs. Possible travel deductions include transportation by plane, car rentals, lodging expenses, and meals. 

If driving to new work sites, you may deduct actual costs or take the IRS standard deduction. This usually results in a higher deduction. You can deduct a flat rate of 65.5 cents per mile for 2023 and 67 cents per mile in 2024. 

Insurance

Insurance necessary for the business, including worker’s compensation insurance if you have employees, is a deductible business expense. If you opt for liability insurance, that’s also a deductible business expense. 

Likewise, if you’re self-employed, your health insurance expenses are deductible. To be deductible, the insurance costs must: 

• Be for yourself, your spouse, and any dependents 
• Aren’t paid through any kind of pre-tax program
• You were not eligible to participate in a health insurance program by your employer or your spouse’s provider

Health insurance premiums are considered an adjustment to income rather than an itemized deduction, so you can claim them without itemizing deductions. You can deduct the amount you paid for health insurance from your gross income.

Marketing Expenses

Advertising costs are a deductible business expense if you market your musical performances, instructions, or services through paid advertising. To take this deduction, you’ll need to keep accurate records of costs with receipts.

Business Clothing

If you’re required to wear a uniform for performances, the cost of the uniform, plus any cleaning costs, is considered a business expense. You must keep receipts to deduct these costs. 

Education

You may need to pay for continuing education or training for your music career. Fortunately, this is a deductible business expense if it’s necessary for your musical career.

Meals

Meals can sometimes be a deductible business expense, usually if you have to stay away from home overnight. Generally, the IRS allows deductions of 50% of business meals. If you choose to deduct the actual expense, you must keep track of all meal expenses, including tips and tax. Or, you may be able to take a per diem allowance. 

Expenses That Musicians Cannot Claim as Tax Deductions

While normal business expenses are deductible as a musician, there are some expenses you cannot deduct, including: 

• Fees from legal violations: You cannot deduct parking tickets, court fees, or other fees related to any legal violation. 
• Regular commuting mileage: The mileage for commuting to work for an office away from home is not a deductible business expense. 
• Reimbursed expenses: For example, if you are reimbursed for travel expenses, they’re not deductible as a business expense.
• Life insurance premiums: If you’re the beneficiary, you cannot deduct life insurance costs.

How to Prepare for Tax Filing and Monitor Tax Deductions for Musicians?

To prepare tax filings and track deductions as a musician, consider these tips:

• Track everything: You should keep receipts and file them carefully for all business expenses. Tracking software or accounting apps can make this easier.
• Create digital files: You can request electronic receipts for all expenses or scan physical receipts. To save time while preparing taxes, ask and save the receipts into a single folder or cloud-based drive so you don’t have to search later. 
• Start early: You can save time preparing deductions by setting up clear accounting systems or using trusted software like doola Books.  
• Consider getting help: A certified public accountant or tax professional can help you prepare taxes, double-check accounting records, and ensure correct filing. 

How to Claim Write-Offs as a Musician on Your Tax Return?

As a business owner or self-employed musician, you usually report your 1099 income on Schedule C. You can also use Schedule C to claim all business tax deductions or expenses.  After subtracting business expenses from income, you will input the difference on Schedule 1 of Form 1040. Tax preparation software can help you fill out these forms automatically after you input the relevant income and expenses. 

In addition, Section 179 of the IRC allows businesses to take an immediate deduction for business expenses of depreciable assets like computers, equipment, vehicles, and software. You can also learn more about filing self-employment tax.

Maximizing Tax Deductions as a Musician

Working as a musician can be an opportunity to create beauty and inspiration while sharing your talents. However, tax preparation can be overwhelming. Preparing and correctly filing taxes with allowed deductions takes time that you could use for practicing or relaxing. 

That’s why excellent tax preparation software is so useful to save your valuable time. Consider doola Books to simplify bookkeeping and free up time to focus on your business goals. Or, get doola’s tax package to ensure compliance and online filings for worry-free tax filings!

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