Education

Five Things for Artists to Consider Expensing on their Taxes

January 23, 2019 | Written by: Stem

Life as an artist can be costly, with paying for music gear, reserving studio time and investing in making merch. A lot of the money spent on a career as an artist can be expensed on yearly taxes. As a platform, Stem is not only focused on revenue transparency for artists but also helping them use their earnings to fund upcoming releases and creative endeavors. While we are neither CPAs nor providing set advice, below are five recommendations of items to discuss with a personal tax consultant when it comes time to evaluate your tax expenses as an artist.

Touring & Lodging

For a tour, plane tickets, gas, van rentals, tire care and shipping fees (pertaining to your gear, merch or physical music) need to be taken into account. While these add up in up-front costs, they can be expenses for musicians. Touring is a means of promoting an album, and the album is the physical product an artist is selling.

In addition to touring transportation for you, your band/team members’ and your gear, lodging can also be a recoupable expense. Hotels are necessary in order to be present and energized for upcoming concerts.

Local Travel

Local traveling expenses tend to be overlooked when tax time rolls around. Commuting to the studio, practice space or local show is necessary in order to work as an artist. Keep in mind that car repairs, gas and Lyft rides are also applicable tax expenses when involving your career as an artist. Remember though that Lyfts for day-to-day errands (such as to the grocery store) are not recoupable.

Laundry & Clothes

While day-to-day clothes are not deductible, some clothing for artists can be expensed on taxes. Any clothing that cannot be worn on a daily basis and is used for your live show can be deducted. Suits, jeans, dresses, and nice shirts that you may wear while performing cannot be deducted. Unfortunately those suits, jeans or dresses are viewed as normal clothes, as they can also be worn to grab coffee when you’re in between tours. If there are costumes you wear only for live performances, those can be applied as expenses on your taxes.

Obviously your deductible, performance-only costumes and your non-deductible clothes worn on off days will need to be cleaned. Laundry and dry-cleaning on the road can be expensed, even if it’s just on your normal clothing, as you’re working. Bear in mind though that laundry at home cannot be expensed.

Technology

In today’s society, technology is more important than ever for artists but devices, softwares and services are very costly.  Computers and phones are necessary artist investments for confirming tour routings, sharing song demos with collaborators, managers and producers, reviewing press pitches and much more. Software such as Pro-Tools, Adobe Photoshop and After Effects are integral as well. They enable artists to record and mix their music, edit album artwork and create lyric videos for new singles. Streaming services, such as Spotify and Apple Music, allow artists to see their playlist placements in the wild and how their music looks to their fans. They are also research tools for comparable artists. Talk with your consultant about how these pieces of technology can be expenses!

Studio Rentals & Instrument Purchases

An hourly or daily rate for a recording studio plus the cost of new effects pedals and microphones can add up. However, instruments and gear are artists’ tools for writing music, and a recording studio is where artists bring their creative visions to life. Anything involved in writing, practicing and recording music is possible for a tax write off.

Many costs are applicable as tax write offs for artists. Stem wants to make sure artists can invest their earnings back into their career and continue making music. Keep in mind that we are not Certified Public Accountants nor providing hard advice. We’re only giving recommendations of items to discuss with your own personal, CPA when working on your taxes.