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Tax Matters

by Ben McLane, Esq.

If a person is actively pursuing a career as a musical artist, and not just playing/writing as a hobby, that person is engaged in a trade or business (i.e., the music business). Hence, an artist can use the Internal Revenue Laws of the United States to his or her advantage. This article will discuss the main deductions that an artist can utilize for the purposes of paying taxes.

So long as an artist incurs expenses that are "ordinary and necessary" in pursuit of that artist's career, the expense should be deductible. However, any expense deducted from a tax return must be backed up by documentation. Therefore, it is imperative that an artist keep complete records of any and all expenses paid in pursuit of the artist's career. Usually, the record will be a receipt. Note that the IRS does not consider a cancelled check, by itself, adequate to verify a deduction; a receipt is more official and credible. An account book is also recommended to keep track of expenses. The main deductions to be aware of are as follows:

A. Travel. This would include air, bus, taxi or train fares, and any related transportation.

B. Meals and Lodging. These are deductible if related "primarily" to business.

C. Car. Gas, repairs, parking and depreciation are deductible in total. As an option, in lieu of deducting all the car expenses added together, an artist can simply keep track of the mileage and just take the standard deduction of .28 per mile.

D. Entertainment. Meals, drinks, etc. are 50% deductible so long as "primarily" business related.

E. Equipment. For an artist, many tools of the trade are deductible. These would include such things as musical equipment, instruments, computer, etc. Moreover, if an artist uses a portion of their home or apartment on a regular basis for business (e.g., practicing, recording, booking, etc.), that portion is deductible as a home office. This means that a percentage of the rent/mortgage and utilities are deductible. For instance, if an apartment has 4 rooms and 1 is used for business, 25% of the rent and utilities are deductible expenses.

The foregoing is only meant to give an artist an overview of potential business deductions. It is advisable to contact an accountant before filing a tax return to confirm that the artist's particular situation allows for these, or other, tax deductions.

Copyright 1998, Ben McLane
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