General Question

mirifique's avatar

Can you write-off the purchase of recording equipment, laptop, etc. as a business expense if you're a musician?

Asked by mirifique (1511 points ) May 10th, 2012

I REALLY would like, slash kind of need, a Macbook to help with my music recordings. Is there any way this could be considered a write-off as a qualified business expense under the Internal Revenue Code and if so, what level of professional musician do I need to be, and how do I document this (if there are certain requirements)?

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10 Answers

john65pennington's avatar

I guess that could be considered a tool of your profession, but you need to ask a CPA to be sure.

There are strict guidelines covering tools of your trade. You might to show proof.

josie's avatar

Ask a CPA. Probably not unless you eventually show actual income from the business.

Lightlyseared's avatar

Pretty much anything can be written off but they have to be “ordinary and necessary” expenses ie common and accepted in your busines that you need those things. With the laptop if you are only going to use if for business uses then you could write off the whole cost but if you are going to use if for personal stuff too then you may only be able to write off part of the cost. As for how professional you have to be I’d imagine you’d need to be able to prove you were earning money as a musican and paying enough tax from those earnings to cover the expenses.

Seaofclouds's avatar

From my understanding of taxes, if you were to claim the laptop as a deduction, you would need to do itemized deductions instead of taking the standard deduction when you file your taxes. If the itemized deductions would be more than the standard deduction, it would be worth it, but you need to save all of your receipts for filing and in case of an audit. Definitely talk to a tax professional about it before you make any decisions and definitely before throwing away any receipts.

mirifique's avatar

I reeeeeeeeaaalllllly want a MacBook.

:)

geeky_mama's avatar

If you are filing your taxes as a self-employed musician then you are probably already estimating your quarterly tax and working with a CPA to file accordingly.
If you are NOT already filing self-employed (or do not plan to)—then I’m leaning towards saying no, you are not likely to be able to deduct the capital expense amortization of a new computer.

If you are filing as self-employed and as a musician (that is, your income is entirely or mostly derived from your work as a musician) then you can claim some portions of the computer’s cost when you itemize your capital expenditures.

Be aware you will also have to itemize how much of the computer’s usage is for professional vs. personal use. Each year there is depreciation to be calculated and itemized as well.

If you aren’t already itemizing it seems hardly worth it for you to go to extra trouble and expense of having to file a 1040 Schedule C and Form 4562 with the proper amortization and depreciation.

Also, bear in mind the deduction you’d get for this capital purchase is rather small and pro-rated over the years (along with the depreciation)—and will certainly be something you realize only months (or longer) after you purchase it.
So, as much as you may realllllly want a MacBook to help you with your music…unless you are filing as a professional musician and itemizing your capital expenses… then I’m afraid you’re probably falling in the category as most of us who just buy a computer and don’t get to write it off on our taxes.

(FWIW, my husband and I are small business owners. For what it costs us to work with our CPA to file itemized and pay our self-employment taxes we could buy a whole lotta MacBooks.)

YARNLADY's avatar

If you already write off business expenses related to your music business, and you are using the equipment solely for the business, then you probably can. If it is just a hobby, with no income or expenses, than no.

Tropical_Willie's avatar

You cannot write the WHOLE thing off in one year. It use to be 5 years with 12.5 % the first year, 25 % for 2, 3 and 4th year. 12.5 % the last year. Must be used EXCLUSIVELY FOR WORK.

I am not a CPA but had to calculate the rates for a group worked for eache year the write off wa different.

marmoset's avatar

I am a pro musician, I have never hired a CPA, and I have always filed my taxes correctly with minimal effort—the key is using turbotax, which you can either do cheaply if you earn more than 31K or do for free if you earn less than 31K a year (see taxfreedom.com). That lets you file federal, state, and your schedule C for your freelance music income.

The people above are right that you’ll have to choose a percentage of the time you use the laptop for your music business. You can’t write it off 100% unless it’s truly only for music. But I don’t think it’s currently correct that you have to spread it over several years; at least when I did it for last year, you got a choice between deducting all at once or over multiple years.

marmoset's avatar

(forgot to clarify that I mean use turbotax’s website—I’ve never bought the software, just let it take me through the process on its site.)

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