Tips from an Accountant: The Best Way for Musicians to Do Their Taxes

We are expert accountants specialising in entertainment finance, ensuring https://siatviviendas.com/business-bookkeepers-bookkeeping-services/ creatives stay focused on their craft while we manage their taxes and financial needs. We specialize in supporting musicians and understand the challenges of irregular income, contract work, and music industry expenses. Whether you should operate as a sole trader, limited company, or partnership depends on your income and long-term goals. We advise on the best setup, handle company formation, VAT registration, and payroll for band members or session musicians you may hire.

Tax Information

The salary range for Music Business Accountants runs from $44,000 to $79,000. The tax year finished on the 31st of March, and you have until the end of January the next year to pay your return. Tell us what services you are interested in Once we have your work and turnover, we will ask you to let us know what sort of support you are searching for. Playing music is your passion and accountant for musicians your dream, but the accounting side can be a headache and we are here to get you sorted and get everything beating to the same drum.

Company

Use this at tax time to make sure you’ve written off all your deductions and keep them with your tax files (again, hard copy or digital) in case of an audit. Basically, you want to be able to prove how you spent money in your business and it helps if you already have this organized by year. You can learn the basics to keep track of https://www.bookstime.com/articles/small-business-tax-deductions your books and manage your business finances.

• If you claim zero exemptions, you will have more money withheld for taxes during each paycheck.
• At Math LLC, we charge somewhere in the neighborhood of $200–350 to prepare a tax return for someone who is self-employed.
• Whether you’re a solo artist, session musician, band member, or composer, managing finances while navigating the music industry can be overwhelming.
• Review your bank and credit card statements; PayPal, Stripe, Venmo accounts; and be sure to track any cash you earn or spend in your business.
• These reports can also tuck neatly into our business plan template that is designed to help you secure funding from external sources like a bank.
• Starting a business is a bit like building a house that requires solid foundations.

Protect Your Earnings

Beyond tax support, we provide financial advice to help you build a sustainable career. We offer workshops and one-on-one sessions to help you understand the financial aspects of your music career better. We also help with budgeting and financial planning to ensure career stability. Our goal is to minimise your tax burden while maximising your deductions, allowing you to keep more of your hard-earned money.

Tom Tom got down to business in the following interview to explore the sometimes overwhelming details of finances with Kingan. We offer a highly personalised service which puts our creative artists and music businesses at the very centre, from tour accounting, business management and withholding taxes, to niche industry areas and specialist advice. Earnings in the music industry can fluctuate over time and we are always thinking ahead to protect our clients’ financial interests.

• Claim all eligible deductions and take advantage of tax benefits specific to musicians.
• After all, creativity does not flow when the mind is preoccupied with mundane affairs.
• Arts and entertainment accountants advise both individual artists and arts-related businesses on financial matters.
• If there is a discrepancy between your income calculated by the IRS, and what you reported on your tax return, you may face penalties and fees.
• This experience supplies them with professional connections—a source of potential clients—and powerful insight into the financial concerns of their artist clients.

Recording Studios

My recommendation is to only write-off music-related expenses against music-related income. For example, if you bought a drum set, write it off against the money earned playing shows, rather than the money earned at your non-music related day job. The IRS pays special attention to income and expenses related to creative pursuits, such as musicians, photographers, and writers. They may consider these to be hobbies, in which case expenses are not allowed. If you claim music related expenses against zero music related income it will look like you had a business loss.

• I have seen tax preparers save their clients hundreds or sometimes thousands of dollars because they know the tricks of the trade.
• For a musician, your vehicle is arguably your most important business tool.
• 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.
• While these ingredients certainly remain important in the digital age, you need to shift your marketing focus online.
• As a self-employed musician, you are required to pay national insurance as part of your tax return if you earn a certain amount of money, which the HMRC will calculate based on your return.
• With monthly financial reports, you can track net income, cash flow, royalty payments, and other KPIs.
• Our accountants for musicians are well aware that creative professionals like musicians need bespoke accounting services.

If you are a self-employed musician, there will be a tax on your earnings in a tax year. This includes money from gigs, concerts, tips and bonuses, playing music in the street, CD sales, online tracks, and merchandise. Moreover, you are also obliged to pay a certain amount for national insurance as per your earnings.

Accounting for Musicians & Artists

In case the HMRC wants to verify data, they will ask for previous receipts. Keeping them organized and chronologically minimizes the changes of computation errors. At Gorilla Accounting, our all-inclusive accountancy package will give you access to your very own dedicated accountant, who will always be on hand, be it by phone, email, videoconference and, of course, in person. “Taxes and accounting makes me anxious, but Christian makes them easy to understand. He’s literally the best accounting pro I’ve worked with to date.”