How to Take tax Deductions as a Performer

In the sixties, the performer Liberace convinced a court that buying rhinestone-studded suits for his act was a legitimate tax deduction. Even if you don't spend thousands of dollars on your stage outfits, even small career-related deductions can lower your tax bill.

Instructions

Difficulty: Moderate

Things You’ll Need:

• IRS Schedule C form, for self-employment income
• File folder for receipts.
• Form 4562 for depreciating assets.

1. Keep receipts and records of everything you spend as a performer. This includes mileage, hotel bills, stage makeup, band instruments and educational material.
2. Deduct all expenses for overnight travel from your performing income. This includes 50 percent of the cost of meals eaten on work-related trips.
3. Take a tax deduction if you use your vehicle for your career. You can multiply total miles driven by the IRS per-mile deduction or use the actual costs of gas and repairs.
4. Reserve one room of your home as your office or recording studio. That lets you claim the home-office deduction for a percentage of your rent and utilities.
5. Claim a tax deduction for anything you bought for your career. As a performer, this can include sheet music, printer ink and stage makeup or clothes. Major equipment such as guitars or electronics must be depreciated using IRS form 4562.

Tips & Warnings

• Musicians can deduct concert tickets and CDs as a necessity for learning about the music industry. Other performers can do the same in their field.
• Expenses have to be necessary, ordinary and "not extravagant" to be deductible. The IRS won't be happy if you try to pass off luxuries as deductible expenses or deduct for a huge number of concerts.
• If your performing expenses outweigh your income, you can deduct the loss from your regular income. If you do that year after year, the IRS will count performing as a hobby and disallow the deduction.