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Income Tax Planning for Musicians

Monday November 28, 2022. 02:00 PM , from Sweetwater inSync
If you’re in the business of creating, performing, or recording music, there are steps you can take to make the most of your year-end gear purchases and potential tax deductions. But you need to wrap these up by December 31 to be able to claim them on your tax return, so you’ll want to plan your purchases now.

Take a look at the links below; they offer lots of useful information.

If you’re new to the issues related to tax deductions for recording and performing musicians, this article from 2014 by our friends at Disc Makers does a great job of summing up the main points. And this article about what the Tax Cuts and Jobs Act Will Mean for Working Musicians.

Section179.org explains travel, meal, vehicle, and equipment expenses (for both gigging and studio musicians), and helps you determine whether or not you can deduct them on your tax return.

Here’s a “nuts and bolts” explanation of Section 179 (first-year depreciation allowance for equipment) and how to take advantage of it. It’s important to know that the deduction limit for Section 179 increased to $1,000,000 until the end of 2026.

In 2021, the IRS and Treasury Department issued a temporary exception that allows businesses to claim 100% of their food or beverage expenses paid to restaurants. This Temporary exception begins January 1, 2021 and runs through December 31, 2022. There are some important rules to know about this, so make sure you read this IRS news release.

Additional Resources about Meals, Travel, and Vehicles

Treasury, IRS provide guidance on tax relief for deductions for food or beverages from restaurantsMeal portion of per diem allowance can be treated as attributed to a restaurantTopic No. 511 Business Travel ExpensesLaw change affects moving, mileage and travel expenses

Of course, we’re not legal experts or tax advisors, so you should definitely discuss these issues with your professional tax advisor. Each individual’s situation is different, and these links are for informational purposes only. After you’ve had a chance to look them over and if it makes sense for your tax situation, please give us a call at (800) 222-4700. We’ll be happy to work with you on end-of-year purchases.
The post Income Tax Planning for Musicians appeared first on inSync.
https://www.sweetwater.com/insync/income-tax-planning-for-musicians/
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