If I start a band what can I deduct and how much money do I have to pull in a year to deduct?

Question

How much income would my band have to make before I could start deducting things?

Could I deduct Instruments, Strings, Gas (to and from gigs, practice, and music stores), Maybe even electricity or rent? How far reaching is it? Thanks

Answer 1

In most cases, the IRS will treat your band as a hobby. You won't be allowed to deduct anything in that case. To add insult to injury, you will be taxed on any income that your "hobby" generates.

You'll have to be good enough that your band qualifies as a business and you'll have to treat it as such for the IRS to see it that way. In that case, legitimate business expenses will be deductible. Such things as having a business location, getting any necessary business licenses, incorporating the business, generating business profits (that's a biggie!) or other such actions can go to prove that you are a business and not just a hobbyist.

As to deducting part of your home costs, that will not fly unless you are using a part of your home exclusively for business use. Any personal use at all of that space will disqualify the "home office" deduction. Claiming a home office deduction is probably the fastest way to trigger an IRS audit