Taxes for USA-based musicians: how to file, when to claim income, and what expenses to deduct

Tax advice for DIY musicians.

[Disclaimer: This advice does NOT substitute for consulting with a tax professional, and you are always under obligation to comply with IRS guidelines. For additional information about reporting your sales on CD Baby, go HERE.]

As an independent musician in the United States you’ve probably asked yourself the following questions about filing your taxes:

  • What royalties should I claim as income on my taxes?
  • Is my musical pursuit a “business” or “hobby” in the eyes of the IRS?
  • What expenses can I deduct?
  • How do I make sure I don’t take the tax hit for income I shared with bandmates, booking agents, and managers?
  • Should I be a sole proprietor, LLC, or S-corporation?

In this episode of CD Baby’s DIY Musician Live, I ask the punk-rock tax-professional Tessa Tax all these questions and more. Check out the video above if you need some general guidance about how to file your taxes as a self-employed musician, and what you should claim as both income and qualified business expenses.

Links mentioned in the video:

  1. Tessa’s website
  2. The pre-save campaign for my song “Collapsing Star” 
  3. Music promotion tools — (IMPORTANT: if you’re a CD Baby client, you can create a FREE Show.co account by going to your CD Baby members dashboard)
  4. Discounts on worldwide distribution

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