Your music is your business. It’s important to have your taxes in tip top shape! As a self employed musician, you have various tax deductions you should definitely be taking advantage of. Here’s what you need to know…
Note: Symphonic is not a legal or tax authority. We do not give legal or tax advice. Symphonic simply reports and provides information as per what we’ve been instructed to. Please consult a tax professional or legal authority for advice and direction.
Quick Guide to Taxes as an Independent Musician
Take Note Of Your Monthly Expenses
Monthly expenses like recording studio booking fees, rent for your production space, even utility costs are all tax deductible. According to TurboTax, expenses related to a home studio are deductible, as well as:
- The costs associated with registering for a business license
- Insurance maintenance
- Fees associated with maintaining your website, like domain registration and monthly hosting
Some additional deductions include:
- Membership fees to professional associations, like the American Federation of Musicians
- Professional services necessary for your business, such as lawyers’ fees and tax preparation costs
- Travel, lodging, business meals (for a limited time, through 2022), attendance fees for music industry events.
- Instrument upkeep/repairs
Keep Track of EVERYTHING.
As soon as you receive your tax forms (W-2s for employee jobs and 1099-MISC forms for any gig or contract work for which you were paid over $600), keep them in a safe place. If your client doesn’t send you the forms you need right away, it’s up to you to check in with them and make sure you get them for your records.
With Symphonic, (Whether you are in the US and/or International) you are responsible for reporting the royalties you receive from your music’s sale/stream. This isn’t an official Symphonic rule or policy, but a government-enforced policy for all territories around the world.
Our system logs every payment and sale you make in order for us to send you payments, but from there, it is up to you to report.
“Why do I have to submit tax information? — Is it absolutely mandatory?”
Yes. The requirements to complete these forms are imposed by the US government and taxing authorities. Since Symphonic must report all payments made, this information must be provided.
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How does Symphonic help?
We’ll collect information from you via specific forms to US/domestic individuals and/or foreign/international individuals. Once we collect that information, we’ll then supply you with forms on an annual basis that you can use for your tax filing. You will only receive forms if you’ve received payment from us within a calendar year.
From a US/Domestic standpoint: We send out 1099’s and other documentation yearly and at the appropriate time for you to report. We also report information regarding your royalties to the IRS; it’s in your best interest that if we pay, you report. We suggest you immediately report whatever income we send you on a 1099-MISC to avoid tax issues.
- The same above applies to our international clients, although different forms are associated with the reporting. We’ll request information on a W8-BEN form and supply you information on a 1042-S annually.
- Rules and regulations differ if you are US/Domestic to us or foreign/international, and our knowledge base will aim to provide you additional information as you read on.
What happens after you fill out your taxes?
After you provide your tax details via the SymphonicMS, the files will be stored securely, and we will keep accurate records of payments we have made to you. We will send you a 1099-MISC form to use for your filing of taxes on a yearly basis. Forms are only sent if you received payment from Symphonic Distribution within a calendar year.
These forms may be mailed to you, emailed, or placed on the SymphonicMS for your records. You can use these forms for tax filing purposes and for any in-country credits for tax treaties.
Make sure you’re doing monthly check-ins with yourself. Review your expenses, income, bills, receipts, and organize your documents so they’re easy to find and ready to go when needed. — Want to learn more? Check out our help desk article about taxes, here.