How to Do Bookkeeping for a Singing Group

Singers must keep accurate records of all expenditures for a harmonious experience with the IRS.

Professional singers have powerful vibratos, perfect pitch and magnanimous stage presence; however many lose their voice when it comes bookkeeping for their career. Each working singer in a group is self-employed in the eyes of the IRS. Self-employed tax status means that the person and the business are one in the same. Self-employed people must file a Schedule C form on their taxes, which lists all profits and losses for the business. All entries must have records to back them up. The most important thing singers can do to lower their taxes is to know which records and receipts to keep and why they’re important.

Things You'll Need

• Bookkeeping software
• Transportation logs
• Box for receipts

Instructions

1. Invest in an online bookkeeping system. Data is a lot easier to record and keep organized electronically. Accounting software for businesses has become very reasonable, and most programs are linked with yearly income tax software products that seamlessly work together to make sure that every deduction you record is transferred to the correct item on your Schedule C income tax form.

2. Save receipts for all business expenses in one place and enter them into your bookkeeping software. Recording equipment, demo CD expenditures, training, rehearsal space, promotional material, websites, research costs, sheet music, office supplies, backup singers, instrumentalists, union dues, costumes, stage makeup, head shot costs and postage are legitimate expenses that will help lower your taxes if they have been used for your singing business and you’ve kept accurate records.

3. Record travel and transportation logs for your business. Many bookkeeping programs have a section specifically for such logs. Even a simple data file on your computer can be fine, but you must write down the date, time, place, miles driven and reason for the trip. The IRS has formulas on how to use this information for your taxes. Tax software for businesses can steer you in the right direction as to how to take deductions, figure mileage and amortize vehicle costs. Hotel stays and meals eaten while you’re on the road performing are legitimate tax write-offs, but you must save all receipts. Don’t forget to include any airfare, train, taxicab, bus, tolls and parking costs that take you to a gig, rehearsal space, recording studio or voice lesson.

4. Set aside receipts and records for any big ticket items such as computers, printers, cellphones, PDAs, tablets, musical instruments, recording equipment, microphones and answering machines that are directly related to your singing business.

5. Record all income with thorough documentation. Any income over $600 in one year must be reported at year’s end on a 1099-MISC tax form. If you are the band leader in addition to being the singer for a group, make sure you have all tax information for your musicians, roadies, back-up singers or technicians, so you can give them their own 1099-MISC form to report their income. You can get your employees' tax information by having them fill out a W-9 form from the IRS.

Tips & Warnings

• Save all receipts for at least six years after you file your tax returns. You need them in case you’re audited by the IRS.

References

• Riley and Associates, P.C.: Musicians and Singers
• The Business of Singing: Tax Preparation
• Kiplinger: Which Tax Records to Keep

Resources

• The Society of Singers
• McClure and Trowbirdge Publishing: IRS Tax Tips for Writers, Musicians, Artists