| Author | Message | ||
     Xl1200r |
I've been drumming for something like 10 years now, and just recently joined my first band. We've been rehearsing and plan on playing out in a couple months once we have everything down solid. I've just been using a cheaper electronic kit because of volume issues associated with living in an apartment, but just bought an acoustic kit for gigs with this group. My question is can I treat this like a sole propriotership and deduct my expenses for the new equippment? Technically, we will be making some money at this. To me it really is just a "hobby", but when you start get hired and paid to do your hobby, the lines get a little grey. Anyone else here in the small-time music industry that give some pointers? I know of at least a few... | ||
| Jimduncan69 |
almost all places we play we get paid cash. although there are a few venue's that pay by check. we have never filed. but if you do decide to file you can right off anything that has to do with playing. including your gas to the gig's. | ||
| Xl1200r |
Exactly what I was thinking, Gary. For this year, I've already invested close to $2000 in gear, with all the federal rate mileage I could claim. In my tax bracket, I think that's like $600 back in my pocket. | ||
| Davegess |
You will have to be careful to document EVERYTHING and you will save yourself a lot of grief if you make a profit every once in a while. There is an IRS rule on hobby businesses and you want to follow this closely. Follow the rules on this and you will be fine. | ||
| Xl1200r |
I've been reading on some of the rules. The main points are purchases can't be lavish (a $25,000 vintage Strat, as an example, is likely not a justifiable expense), unless your main business is recording (or something similar), you can't claim a home office, and there were some others as well. Rules about claiming meals, how to claim your car, things like that. The feds don't require odometer readings, so it makes that part easy. The rest is just basically recipts, if I understand it correctly. | ||
| Davegess |
They are also likely to want to see the occasional year of profit. | ||
| Court |
You do not deduct equipment, you depreciate it. You will have to select one of four methods (i.e. "straight line, double declining balance, sum or the years digits or accelerated) and keep records. In addition, should you ever sell any of the equipment you are subject to recapture provisions. The fact of the matter is . . . you are much better off to keep it a hobby and forget the deductions unless you are making, and investing, a significant sum . . like greater than $50,000/yr. I'll get lectured for saying this but my reasons are as follows:
You asked. Someday you'll thank me. . . . then again if you have a Platinum CD you'll be hunting me down. Play music for fun, start a sham construction business for your write offs.  | ||
| Leftcoastal |
"Play music for fun, start a sham construction business for your write offs." THAT'S where I went wrong! - All this time I've been trying to run a LEGIT construction business! What was I thinkin'? AL | ||
| Lemonchili_x1 |
I'm with the keep it cash philosophy, my reasoning being that you don't know when gigs will go quiet and/or you stop playing for a while. Last fin year I played 1-2 gigs a month, but this year I've done hardly any so far. With gear... it's a hobby, I never expected to make any money, but I'm more than happy (and slightly amazed) that last years gigs paid for the new amp and new bass I bought at the beginning of last year "You, profit or loss, subject your band mates and everyone else to a much higher chance of being audited. " If you are going to claim I think its polite to ensure your bandmates know what you're doing. It's better if you're all doing the same thing. | ||
| Spank |
I have been a musician for a living for the last ten years off and on. It's a lot like Court said, it all depends on how much you make at it. If it's just some bar gigs I wouldn't worry too much about it ( especially if it's cash ). I am basically a hired gun if you will, although I have been a part of a band, thats really when you treat it like your own business. I suppose you could do the same but it can get messy, just like court explained. | ||
| Ft_bstrd |
Gray Economies are good. Unless you have a giant contract and are making tons of money, leave it as "hobby money" and forget about the deductions. | ||
| Davegess |
The cash advice is good, probably the way to go. |
