Planning for tax season is a pain for everyone, but for the self-employed it can be downright maddening. Many singers don’t know what constitutes an allowable deduction, and even those who do often miss a few things. This list is by no means intended to fit every singer’s life–some of the categories may not suit your needs, and specific items that work for you may not be listed here. The idea is to know what general kinds of expenses are candidates for deduction and which aren’t.
Important: Keep detailed documentation on all of your potentially deductible items. During an audit the cards are definitely stacked on your side when you can present receipts to your auditor. I don’t recommend that you do an audit on your own; it’s best to be accompanied by your tax preparer. Most auditors have absolutely no understanding of the business of being an opera singer, so you will spend much of the audit educating them and justifying your expenditures. For example, you might have to explain why you had to bring your own accompanist to a major competition, or why your gown could not possibly have been worn for anything other than for a performance. Keep a written log of items stored in your wardrobe or long-term storage. When buying performance dresses, ask the clerk to write “gown” or “formal wear” on the sales ticket. Photographs and other types of documentation can really make your case. Keep track of every mile you travel when doing something career-related, even just the short trips to make photocopies or to the post office. It’s best to back up costume deductions with actual production photos.
Keep your documentation on all the competitions that you win. If the competition requires you to be enrolled in an educational institution, then you cannot be taxed at the higher self-employment rate on your winnings.
What Is a Tax Deduction? by Eric Krone, E.A.,CFP
If you need it to run your singing business, it is a deduction. Remember that the IRS cannot tell you how to run your business. What makes something deductible is what the taxpayer deems to be an ordinary and necessary business expense. The taxpayer, not the IRS, determines that. The key to deductions is remembering that deductions depend on intent. Did you intend this item or service to be for business purposes? If so, it is a deduction. But if you make a purchase for your own pleasure, that purchase is not deductible. When I prepare tax forms for singers, I leave blank lines on my forms for any idiosyncratic deductions that only the individual artist would understand. Deductions should be divided into two sections: business and travel. Living expenses are deductible only when you are out-of-town on a job.
• Insurance premiums for 1998
• Business insurance
• Medical expenses, travel to doctor
• Donations
• Tax preparation for 1997
• 1998 AGMA pension, IRA, federal and NY state tax withheld
• 1998 Taxes paid in foreign countries
• AGMA dues
• Business dinners
• Agent/management fees
• American Express membership or any credit card fees
• Business gifts
• Backstage tips
• Haircuts (only if your own hair is used in productions)
• Wardrobe used for storing performance gowns, dry cleaning
• Business phone calls
• Telephone answering service
• Photo, publicity, head shots
• Website domain name registration
• Copies, photo copies of music, mailings, etc.
• Postal
• Piano tuning
• Massage, Alexander or Rolfing; check with your therapist for details)
• Performance Enhancement Training
• Language lesson
• Voice lessons
• Coachings
• Dance lessons
• Audition accompanist fees
• Rehearsal hall rental
• Audition fees
• Car mileage/gas, tolls and parking
• Taxicabs + tips, all other service tips
• Airplane tickets, subways, buses
• Train, hotel
• Business-related entertainment
• AOL or Internet provider
• Cable TV
• Research books or other research material
• New York Times
• Video rentals
• Recordings/Equipment
• Music scores
• Trade magazine subscription
• Costumes
• Stage makeup
• Hair care, trims
• Office supplies
• Computer and software
• Equipment repair
• College tuition
• College room and board
• Luggage, travel expenses
• Per diem (If no per diem is paid on a job, you are allowed a certain deduction according to the city you are in)
• Union fees paid in other countries
• Passport, photos and processing fees
• Meals while traveling for business
• Car rental while on a job, or to travel to auditions
