Many Moods Enterprises

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It's Tax Season, Are You Getting Your Deductions?

Artist get your tax deductionsStarting out as an independent artist can be intimidating when it comes to setting yourself up as a business structure. As an independent artist, you may not have to formally register as a business entity, but you are still in the business of entertainment.

The artist I meet usually are struggling artists who have a nine to fiver, in order to pay the bills right now. If you have employment, then you file taxes every year.  An indie artist that is performing, you should certainly have incurred expenses.  Did you buy a new microphone, or other recording equipment?  Perhaps you purchase clothing or performances or paid a band to play behind you.  There are many expenses that can be deducted on your tax return.

Deducting expenses such as equipment, travel, clothing, boarding, studio rental, purchases of Cd's and other expenses are allowable as a deduction on your tax return as a performing artist. You’ll have to do the long form, but it will be well worth your time.  You'll also want to keep all receipts from your purchases and other expenses.  By making these deductions, you lower you gross salary that you received from employment, and receive a bigger return.  Of course, if you make money from gigs and shows, you'll have to report that income as well.

Some popular tax programs have simplified the tax preparation process and made it easy to prepare your own taxes.  Be sure to use the long 1040 tax form or you won't see the option to take these type of deductions. The process is so easy, you won't need to use a tax preparation service or accountant.

If you’re an indie artist, remember you are a product and should package yourself as such.  You don’t necessarily have to form an company, but you can if you want to present yourself as a professional organization as well as an artist.  If you form a non-profit organization, you can receive grants and sponsorship through various Arts organizations in your state and you can legitimately request donations. (By that I mean the state attorney general won’t come after you for accepting donations without a 501©3).

If you’re intention is to create your empire, you’ll want to explore the different types of business structures that are available. You have several options open to you, it’ just a matter of deciding what’s best for you at this time.

Sole Proprietorship, Partnership or Non Profit or for profit Corporation, where do I start? What are the advantages of one over the other? Do I need a Lawyer? Is it expensive? Is it really necessary? These are some of the questions you may be asking yourself.

Choose the business structure that is most feasible for you at the present time.  If now is not the time to form an entity, don't.  Just continue as a performing artist and make your tax deductions as such.

There’s lots of information about setting up your business, and tons of companies that will assist you for a small fee.  Just Google it and get your deductions.

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