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GGRIG
Returning Member

Music income

 Let's say I spent money on buying sounds and producing a song, but that specific song didn't bring in any income. Can I still deduct it from my music income from a different song? 

4 Replies
LJane29
Employee Tax Expert

Music income

Hi GGRIG

 

The music business can get tricky!  As long as your intent is to have a profit and it would be in the regular course of business then you can add this expense to your business.

 

For example:

 

I am in the music business and I normally write children's songs.  I decide to try my hand and rock and roll and need a different piece of equipment to produce the sound I want.  Unfortunately it doesn't sell.  My intent was to sell the song and make profit so I can write off the expense.

OR

I am a graphic designer and I create album artwork.  I see how well these music writers do and decide to try my hand at it.  Same as before, I have to buy special equipment but my song never goes anyplace.  I really can't write off the expense as my main freelance is not song writing.  Chances are I wont be using the equipment again or I'll sell it.

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GGRIG
Returning Member

Music income

Thanks! This makes sense.

One more question. Can I deduct online music courses I took to learn music production? These are courses directly related to what I do.

LJane29
Employee Tax Expert

Music income

Yes!  anything you can relate back to producing your music and as long as you are producing with the intent to make a profit you can write off.

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ReneeTAXEA1
Employee Tax Expert

Music income

Thank you for contacting TurboTax Live!  We see that you had a question - about some equipment and other materials you purchased for your music project.  We thank you for your question!

 

It appears from your question that you are engaged in the music business, in either creating music and song content, or in producing music and songs.  That is really neat!!

 

You should treat the music business collectively - and not treat each and every song, or production of music content as a separate business activity.

 

Since we do not know - from your question - whether the business expenses that you incurred for the song can be used in future pursuits and other song-writing and producing activities - we are speaking about your music income and expenses collectively.

 

If there is something unique about the song/music - that did not generate any income in the current tax year - that was not contained in your question - we encourage you to write back to us in this post/reply, to clarify your concerns about the non-income producing song/music.

 

All income paid to you during the 2020 tax year - as either reported to you on either a 1099-NEC or a 1099-MISC in box 3 or 7, as well as all income paid to you during the year, whether in cash, check, direct deposit, or otherwise - is considered self-employment income as far as the IRS is concerned.

 

You will report all of that income on a Schedule C - Business Income & Expenses - which will become a part of your personal Form 1040 tax return filings for the tax year.   This is true for your music business and self-employment in the music field as a whole - and use a Schedule C for your music collectively.

 

Because of the nature of equipment and materials that may be used in the music business - both for creating content and producing music in general - some of the equipment (depending its useful life, cost, and whether it was needed for a single project, or can be used for future project) may be subject to depreciation rules - and you may need to discuss those rules with one of our Live! Tax Experts! though setting up a call back or Chat session with TurboTax Live!!!

 

In any event, we sincerely hope that this post/reply is fully responsive to your question, and we thank you again for your question!!  All the best to you in the music you create - and thank you for contacting us at TurboTax Live!! Cheers!!!!

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