Any tax exemptions for bands?

Question

Is there any way for a band (4 members) in Texas to become a small business and become entitled for tax exemptions? Or would I personally be able to write off guitars, amps, etc.?

Answer 1

Either as a small business (C-corporation) or personally (as a sole proprietorship, filing a schedule C on your return, you could deduct ordinary and reasonable business expenses; as for equipment such as guitars and amplifiers, these are assets that would have to be depreciated over three or five years.

But here is the catch - to deduct the expenses, you have to report your share of the band's income, which you may already be doing anyway if any club owner ever gave you a 1099 for performing. The key here is you can't have your cake and eat it too. You report either the income and the deductions, or neither one. If you do get paid in cash, though, you might as well report the income because under an IRS audit, they will look at your bank account and want to know the sources of deposits.

Answer 2

You could become an LLC (limited liability company) where you will be treated, legally, like a corporation (limited liability) and taxed as if you were a partnership (allocated profits and losses however you all agree). You would then contribute your instruments to the LLC and the business could depreciate them. Be sure to get EVERYTHING in writing before hand so that there won't be any misunderstandings later on. i.e what happens if we add a member, lose a member. Think of all scenarios and decide how to handle it.

Answer 3

You could incorporate your band, or make it into a business partnership or S Corp, that would allow you write off expenses. Talk to a business attourney about this.

You can write off expenses without doing that by filing a schedule C, but you will also have to keep track of all income you make playing music and pay taxes on it. If you do not show a profit within 3 years, it gets classified as a hobby and you may have to pay back taxes on it.

Talk to a tax accountant, they will know what to do.

Answer 4

You can write off ALL that stuff. All equipment purchases, etc. You may even get to write off many nights of drinking with your band by calling it a "business meeting".

Answer 5

Since guitars, amps, etc. are long-lived assets, you probably can't write them off. You can, however, depreciate them. You should see a tax accountant about this.

Answer 6

you should be able to write off all your equipment plus milage you drove to get to your shows, if ya'll have a vehicle you can write that off to,any advertisement you did to