The number one mistake musicians make really has nothing to do with music or entertainment at all. It has to do with a simple tax concept: deducting expenses. I have only met three musicians who have understood this basic concept before having consulted with them myself. Ironically, it can save an artist thousands and thousands of dollars per year, and yet they throw money away. What is this big dark secret? Did you know that you can write your business expenses off your taxes? Here’s how it works.
Most of you are contractors, not employees. Let me explain. The person who paid you deducted nothing from your check before paying you. In other words, you are paid per job, being given a gross amount each time you perform, where you are totally responsible for all taxes to be paid. This makes you a self employed contractor. In the entertainment business, there is a huge advantage to this status.
Just think of all the things you purchase just so that you can perform. Your music, your instrument, your amplifier, cables, chords, the cart you use to move it all…your gas…even travel costs. Now, think about all of the other things around your house that you need in order to do your work; your computer, your printer, copier, even paper…even the office space! All of these things are completely necessary in order for you to be working. ALL of these things are called “deductions.” Just like the word says, you are allowed to deduct a portion, and often the entire amount of the cost of these items off your taxes.
Give us a call or email us and GFY will help put you in contact with people who work with us who can help you organize you finances in order to take advantage of this opportunity. It’s simple. It’s easy. If you aren’t deducting now, you WILL save lots of money.