Taxes for Musicians: A Simple Guide to All the Forms You’ll Need

Some cloud-based programs even offer real-time synchronization with multiple devices such as phones and tablets so that you can access your data wherever you are. Managing money in the music industry can be a daunting task, and if you don’t have the right accounting software in place, then it can be an even bigger challenge. Keeping accurate records of expenses and revenue is essential for any musician or music industry professional, so having the best accounting software for your needs is crucial. Fortunately, there are many great options available specifically designed to help the music industry stay organized and financially secure. In this article, we will examine 5 of the best accounting software solutions for musicians and music industry professionals. When it comes to making money in the music industry, there are a few key things you need to know about accounting and financial statements.

Music Business

• For more information, check out the best online bookkeeping services for small businesses.
• If you’re just starting out as a musician and are working on music projects as a side gig while still having a day job, things are a bit different.
• You may soon be receiving a number of forms you’ll be expected to use when filing your taxes before the April 15 deadline.
• At the end of the year, it simplifies the process to figure your total income and parse out your expenses when they are localized to one account.
• Let’s say that I am about to tour as a hired gun for a pretty well known indie artist.

I have seen tax preparers save their clients hundreds or sometimes thousands of dollars because they know the tricks of the trade. On the other hand, I have heard from some of my clients that their previous preparer disallowed them legitimate expenses, because they didn’t understand the music business. Look for someone who is familiar with your field so that they are knowledgeable about the types of things you can write off. If you find yourself working with a tax preparer that seems like they do not understand you or your business, it would be better to go elsewhere. In a typical musician/artist scenario, would the amount they can save me be worth the additional expense?

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You can also hire an accountant who has a particular specialization, for example, if you own a small business or live abroad. Some professionals are generalists, but it is important to hire someone with a level of experience no matter what. The cost of hiring accountant for musicians a professional accountant to do your taxes varies based on your situation and what tax forms you are required to file. If your tax situation is simple, say you work for a company and need to submit your W2s, it may cost less to hire an accountant.

• Be aware that since an LLC can be a sole proprietorship, partnership, or corporation, you will need to clarify if any of the LLCs you hire are incorporated or not.
• Yes, QuickBooks is a very helpful tool for musicians and music industry professionals to use.
• However, humans tend to more prone to errors compared to well-functioning programs.
• As a licensed tax consultant, I cannot advise to keep any earnings “under the table.” All income must be reported.
• They will learn about your family or business’s financial records and goals.

How to Make Money in Music: A Guide to Accounting for Musicians

My advice to filling out the W-4 is to get as close to zero exemptions as possible to avoid having to pay a lot at the end of the year. As a licensed tax consultant, I cannot advise to keep any earnings “under the table.” All income must be reported. If you make less than $400, you would report it on line 21 of your form 1040.

It offers features such as tracking expenses and income, managing invoices, budgeting and forecasting, and connecting with payroll services to help streamline the financial side of their business. Additionally, its user-friendly interface and built-in reporting features make it easy to use. Emily Kingan is known in the music world as the drummer for Lovers and singer/guitarist for homocore band The Haggard. Her bands have toured the world, spreading empowering feminist messages to fans for years. Around Portland, Oregon she is also known as a lifesaver for artists and musicians when it comes time to file taxes.

We are accountants, who are also musicians, helping entertainers with entertainment industry tax and accounting issues nationwide. You entertain people for a living, and with an accountant for actors, musicians, and other creatives, you can focus on the fans rather than your finances. Entertainers face particular financial situations that don’t occur in most professions and our accountants can help you protect what you’ve earned. Whether you need a music accountant for your band’s tour or a contract analysis for your next big role, our entertainment accounting services help you grow your wealth and plan for the future. If you’re serious about making money in music, then you need to get serious about accounting. By following the tips in this article, you’ll be on your way to financial success.

Johan Tax & Accounting

Atlanta-based Alexis Louis (fka Alexis Kimbrough) is the founder of Growth Group, a music-focused accounting firm that works with musicians, record labels, and recording studios. A musician herself, she has served as featured panelist at the International Music Conference, Driven Music Conference and as a panelist at the Xero Roadshow. Her academic background includes stints studying Accounting and Taxation at Howard and American Universities. We can manage your tax returns or self-assessments, keep you compliant with HMRC, as well as providing you with advice and support day-to-day or during investigations. All the while, you’ll be covered by our insurance if any tax investigations are opened. Meaning your professional costs with us will be covered while HMRC is investigating.

Zoho Books is a cloud-based accounting software that provides features such as invoicing, expense tracking, and inventory management. It is aimed at small businesses and includes integrations with various other business tools. If you’re just starting out as a musician and are working on music projects as a side gig while still having a day job, things are a bit different. In this case, you’ll be able to report net losses when filing your tax returns for the first years of your new business venture, and get tax deduction on these losses. Can a drummer write off expenses related to their music if most of their income is made through non-music related means?

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• You may consider incorporating if you anticipate making a profit of $30,000 or more within the current tax year and future years to come.
• You can find a good CPA by asking your family, friends, and colleagues for recommendations.
• We provide litigation support for the music industry, including expert witness services, reviews of recoupable expenses, penny letters, tour budgets, depreciation schedules, and tax planning.
• He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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How to Interpret Your Financial Statements

Another friend is a drummer who makes most of their income through teaching private students. I would also add to keep track of your mileage if you teach at a location outside your house. You can also write off a percentage of your rent and utilities as a home office expense if you work from home.