Overview and Highlights

The following outline focuses on aspects of the tax law that specifically affect musicians. For additional information on deductions, exemptions or filing status, see a tax advisor or www.irs.gov.

Here is a quick overview of some highlights for this tax year:

• The top four basic tax rates above 15 percent remain the same. (The rates are 25 percent, 28 percent, 33 percent and 35 percent.)
• The basic standard deduction is $5,450 for singles; $8,000 for heads of household; $10,900 for married filing jointly and $5,450 for married filing separately.
• The standard mileage rate for business use of your car is 50.5 cents per mile for the first half of the year and 58.5 cents for the second half of the year
• Wages and self-employment earnings of up to $102,000 are subject to the Social Security tax for 2008. (In 2007, this amount was $97,500.)
• The personal exemption amount was increased to $3,500 in 2008. (In 2007, this amount was $3,400.)
• For 2008 the maximum annual contribution to an IRA is $5,000, but a taxpayer age 50 or older can make an additional catch-up contribution of $1,000.
• A six-month automatic extension may be obtained by filing Form 4868 by April 15.
• In 2008, if the claimed value of a donated car exceeds $500, a qualifying written acknowledgment must be obtained and must be on form 1098-C and attached to Form 1040 or no deduction is allowed. If the charitable organization sells the vehicle without having put it to significant use or improving it, a deduction is limited to the gross proceeds from the sale, which must be reported in the acknowledgment.
• Taxpayers can deduct either state and local income taxes or state and local general sales taxes. The sales tax deduction is based on an IRS table or actual sales taxes. You should get the advice of your tax preparer when filing your return.
• Eligible individuals in 2008 covered by a high-deductible health plan can make deductible contributions to a Health Savings Account (HSA) up to the lesser of the plan deductible or $2,900 for self-only coverage or $5,800 for family coverage.

Income & Related Expenses

Professional musicians may have income from which tax has been withheld (W-2) or income from self-employment where neither tax nor Social Security has been deducted.

If the musician is self-employed, all allowable travel and other expenses should be deducted on Schedule C before the adjusted gross income is entered on page 1 of the tax return.

If the musician has only W-2 wages, these expenses must be deducted on Schedule A.

Reimbursements for expenses (e.g., travel and entertainment) received under an accountable plan do not show up on the musician’s Form W-2, are not reported as income, and do not give rise to deductions.

However, if the employee’s expenses exceed reimbursements, the excess may be claimed on Form 2106 as an employee business expense.

Generally, reimbursements are considered received under an accountable plan if:

• They are made for deductible business expenses;
• The employee accounts for the expenses to the employer; and
• The employee returns any excess reimbursement.

Reimbursements received under a non-accountable plan (any plan other than an accountable plan) are subject to withholding and employment taxes and are shown as wages on Form W-2 and must be reported as income on Form 1040.

The employee may be able to offset the extra income by claiming employee business expenses on Form 2106, but such expenses, along with other miscellaneous itemized deductions, may be claimed only to the extent they exceed 2 percent of adjusted gross income.

Travel Expenses

The deductibility of long-distance travel involving railroad or plane fares is fairly clear. The fares, plus related costs — such as taxis to or from the depot, baggage-handling charges and passports — are all deductible as travel expenses.

If you were away from home overnight, you may also deduct all of the following expenses: 50 percent of meals and entertainment; 100 percent of travel and lodging; laundry and cleaning; tips to bellhops and chambermaids; and transportation at destination.

Musicians may also use their own cars for business travel. The deductible items involved include: depreciation of the cost of the auto; gas, oil and tires; insurance, license and registration fees; parking expenses (e.g., garage rental or parking meters); parkway or bridge tolls. The point to remember in deducting auto expenses is that after you have totaled all of these costs, you must subtract that portion used for personal purposes.

The regulations call for an allocation based upon both time and mileage used, and this is often the most difficult part of the calculation.

An alternate method involves computing the amount of business mileage and then multiplying those miles driven by 50.5 cents (from Jan. 1, 2008 to June 30, 2008) or 58.5 cents (from July 1, 2008 to Dec. 31, 2008).

You may still deduct direct costs such as parking and tolls (but not depreciation, gas or oil).

The real problem in travel expenses is determining what portion of local travel (that is, not away from home overnight) is deductible.

In no case are personal meals deductible if the musician does not sleep away from home.

The regulations say that commuting costs are not deductible. This means that if the musician travels only from home to the hall and back again, the costs of travel are not deductible — even if the instruments are so bulky and heavy that it is impossible to use public transportation.

The costs of transporting instruments to and from work are deductible only if extra costs were incurred.

If you are playing more than one job during the day, you may use the business mileage formula described above for travel between jobs.

Again, except for any additional expenses, there is no auto deduction for travel to the first job or home from the last.

Job Expenses

Bills are required as proof for all job expense items exceeding $75 but there are many items of a lesser amount — such as tips and taxi fares — where no proof may be obtained.

Detailed records must be kept of these expenses (and of business mileage if a car is involved) through a careful diary or log. Keeping such records takes time and effort. If your return is ever examined, however, you could lose your entire deduction in the absence of a good log or diary.

Numerous other items are deductible by the professional musician. Among these are education expenses, accounting fees and fees for investment advice.

Education

With regard to education, you may take a deduction for any training or coaching that sharpens your present job or professional skills, or meets the expressed requirements of your employer for you to retain your job. You may also be able to deduct the cost of a course if you are entering a new specialty within the music field.

Other Expenses

Also deductible are employees’ expenses incurred in the practice of your profession.

In addition to the travel expenses discussed above, they include:

• Union dues, assessments and initiation fees;
• Commissions paid to agents and booking offices;
• Dues to other professional societies;
• Rehearsal hall, studio or office rental;
• Sheet music, transcriptions, arrangements, records, manuscript paper, etc.;
• Stationery, printing and postage used in business;
• Telephone used for business (a portion of your home phone may be deducted);
• The costs associated with your cell phone, as long as the calls are made for business purposes;
• Books and subscriptions to professional journals;
• Advertising and photographs for promotion;
• Other promotional expenses such as entertaining potential purchasers of music and gifts (not exceeding $25 per recipient);
• Repairs and upkeep of instruments;
• Insurance on instruments;
• Substitutes’ pay;
• Legal expenses for drawing up contracts of employment;
• Rental of instruments;
• Depreciation of instruments or recording equipment.

Self-employed musicians (those who use Schedule C) may take tax deductions for contributions made to formal pension or profit-sharing plans for themselves and their employees.

The procedures for this are quite complicated, and we advise that professional assistance be employed.

Note that two items — home office expenses and expenses for uniforms — were omitted from the above list. A word of caution is needed as to their deductibility.

Home Office Expenses

You may claim a deduction if you use your home office exclusively and regularly for the administration or management activities of your business, and you have no other fixed location where you conduct such activities.

Exclusive use means that the office space must not be used for personal purposes. And you may not deduct home office expenses in excess of your net income as a musician.

Expenses for Uniforms

The cost of uniforms and other apparel, including their cleaning, laundering and repair, is deductible only if the garments are specially required in order for you to keep your job and are not adaptable to general or continued wear, to the extent that they could replace your regular clothing.

You may not deduct the cost of ordinary clothes used as work clothes on the grounds that they get harder use than customary garments; that they are soiled after a day’s work and cannot be worn socially; or that they were purchased for your convenience to save wear and tear on your better clothes.

That your job requires you to wear expensive clothing is not, according to the IRS, a basis for deducting the cost of the clothes, if the clothing is suitable for wear off the job.

Deductions have been allowed to musicians for formal wear and the costs of theatrical clothing and accessories, if these items are not suitable for ordinary use.

Proceed with Caution!

A great deal of specific information appears in the booklet every taxpayer is sent with pre-addressed income tax forms.

If you have a complicated return or a particular tax problem, consult your own tax advisor or, if you prefer, contact one of the IRS taxpayer assistance sections at any of its offices.

The concept for the Vocal Clinic Talk Show is basically a spinoff from Erik’s Youtube version of the vocal clinic (www.youtube.com/user/lloyd614). The Youtube clinic is designed to provide voice techniques and music industry advice to aspiring artists, singers, etc. Currently, the Youtube channel has tons of subscriptions and is still growing. Subscribers have joined from several countries around the world.

Attempted Suicide at 14, Sexually Assaulted As A Teenager, Told She Wasn’t Good Enough To Sing At 18, Struggled With Eating Disorders In College, Abused by Live In Boyfriend at 22, Saved by Grace at 24, Broken Hearted and Desolate at 30, Fulltime Minister and Recording Artist at 32, Delivered By The Love Of Christ and Set Free Today – The Ministry of Dr. Naima Johnston

Bridging the gap between Contemporary Christian Music and Urban Gospel, Naima is a dynamic singer, songwriter, educator and author whose thought provoking ministry explores life’s hopes, promises, joy, doubts and disappointments while giving glory and honor to the never failing love of the Savoir. Dr. Naima Tonya Johnston uses her artistic gifts to communicate the love of Christ across the nation. Engaged in fulltime ministry, Naima travels ministering, performing, speaking and teaching for churches, religious groups, musical venues, educational institutions and other social and civic organizations.

Naima has written and produced her independent debut album entitled, Everything, and is completing her second CD, This Place. Naima is the author of a self published training manual entitled, Called To Sing, 13 Mistakes To Avoid When Starting In Music Ministry, a mini book entitled, Doctor Nay’s Random Life Lessons on Recovery and has acquired numerous fans and supporters from ministering and performing in states such as Georgia, Kentucky, Kansas, Wisconsin, New York, Ohio, Maryland, Connecticut, Missouri and Indiana.

Currently ministering at over 80 engagements a year, Naima has been afforded the opportunity to share the stage with great artists such as: Dorinda Clark Cole, Ashley Cleveland and The Last Poets. Naima serves as a contributing writer to several newspapers, websites and magazines. She has been published in the anthology, How To Jump From A Ferris Wheel and Land On Your Feet and the upcoming, Triumph of My Soul Anthology. Naima’s piece entitled, “Drowning Is A Terrible Way To Die” will be appearing in, The Sistah Faith Anthology, edited by Essence best selling author, Marilyn Griffith in 2009.

Find out more about Naima at http://www.katapultent.com/naima.htm

Naima’s Website
http://www.katapultent.com/naima.htm

To order the book Called To Sing email Naima:
naimamusic@yahoo.com

You call her Katy Perry, we call her Katy Hudson, the singer who at the tender age of 16 released her self-titled debut album in the Christian marketplace.

You got it. Katy Perry, whose single “I Kissed A Girl” is tearing up the Billboard charts, got her start in the Christian industry.

The only thing that determines your material success with music is the number of fans you have who are willing to spend money on your CD’s, downloads and merchandise and pay admission to your live performances.

This show tells you how to build a thriving fan base that are willing to support you financially.

What are your Ideas on growing a fan base?
Leave a comment and let us know

A year ago they were still seen as controversial and experimental. Labels defended them as justification for investing in an artist in a time of decreasing CD sales.

Today, though, those deals are becoming mandatory. Warner Music Group CEO Edgar Bronfman told the Web 2.0 Summit audience that his label now requires all new artists to sign 360 Deals, and that about a third of their signed artists are under those contracts.

Bronfman argued to a hostile crowd that it doesn’t make sense for labels to pour money into artist development when CD sales, their primary source of revenue, continue to decline (although he did say that digital sales now make up 20% of their revenue). Without other ways to make money from an artist, he said, they wouldn’t continue to promote artists.

Bronfman also said that 360 deals give labels the ability to give away music for promotional purposes to spur event and merchandise sales.

And that, for me, is the key. Bronfman, an outsider to the music world until recently, sees the writing on the wall - music downloads will eventually be free, and will serve as little more than marketing collateral to other revenue streams.

360 deals give labels a place in the new music economy, and there’s nothing wrong with their attempt to keep their businesses alive over the long run. Artists can choose to go with them or not, depending on their own opinion of the benefits. If labels really can bring enough marketing and promotional benefits to the table, artists will take those deals. They may be slaves to the labels, but they have a chance (albeit a very small one) of becoming rich slaves, at least.

A bio is the cement that holds your presentation together, creates your identity, brands your style and leads the reader directly to the music. Ideally, your bio should be applicable for multiple purposes: a key ingredient in your press kit, an essential element on the homepage of your website and as an easy introduction to bookers, journalists, fans and the music business at large. Music people are intuitive about press and publicity materials, and if a bio is non-existent, shoddy, poorly written, off-putting or amateurish, odds are the music it represents will share these same adverse qualities. Keep in mind that if you are using your bio to generate press, oft-times overworked and underpaid journalists with lift the exact phrases and words in your bio for articles and reviews.

Recording artists, songwriters, musicians, composers, performers and producers all benefit from having well tailored, professional bios. In this article MC advises your how to create an effective bio in reverse, by advising you what not to do.

1. Don’t tell, show. Beware the hackneyed cliché, the imprecise metaphor, and the goofy, strained adjective. “Joe Jones is a brilliant artist,” or “Sue Smith is destined for stardom,” are lame and off-putting. The bio must lead the reader to his own conclusions. Telling a reader what to feel or think may lead to the exact opposite impression.

2. Avoid the time machine. “She began playing piano at the tender age of four, and by age five….” Instant naptime. Begin your bio in the present, and then go back in time, but only so far as the story is fascinating. Beware dating yourself: if you’ve had an extensive career, you may want to be non-specific about years and simply summarize the main points and experiences.

3. “After a successful career in the marketing business, he decided to return to his first love, music.” Career choices that have nothing to do with music are needless distractions in a written bio. They may also illustrate a meandering, indecisive path. Music professionals don’t want to know how about your straight job. Do not include facts that don’t impact the music. For instance, it may be pertinent to say you ride horses if you have songs about horses, or have written songs while riding horses or can draw some correlation between horses and music. Otherwise, leave those horses in the pasture. Information about your educational background, work experience, broken marriage, prison term or dysfunctional childhood should be referenced only as it relates to your music.

4. Beware of grandiose comparisons. “Susie Stiletto combines the sensitivity of Joni Mitchell fused to the aggressive lyricism of Alanis Morissette, combined with the melodicism of Sheryl Crow.” This tells us nothing about the subject and she’d certainly need to be a mind-blowing, powerhouse artist to rank comparison to this triumvirate. Using others as reference points projects a “wannabe” status.

5. Be aware that certain tired phrases that will trigger the hype meter. “Eagerly anticipated,” “critically-acclaimed,” and “best kept secret” are three such onerous offenders. Other overused terms include “unique” (who isn’t?) and “passionate.”

6. Check all spellings and grammatical uses, especially if you’re planning on using your bio to solicit reviews or features in the press. Bad copy is galling to those whose livelihood is the written word. Keep your words in the “active tense” i.e. “John Smith incites his audience,” as opposed to the passive: “the audience is incited by John Smith.”

7. Exaggerating or outright lying. Being on the preliminary Grammy ballot does not deem you “Grammy-nominated.” Likewise, charts no one has ever heard of and awards with questionable luster will make you appear suspect and marginal.

8. Being generic and safe. Name and claim your musical style, and let the bio reflect the category. A seething, pierced, neo-punk aggregation and a soothing, cerebral instrumental artist can’t possibly share the same metaphors. Your bio must speak to the reader in the exact same voice as your music. Speaking of voices, interjecting direct quotes is a device that established artists have in their bios to lend immediacy and fire to the piece. Consider having your own words describe your music.

9. Too much verbiage is a turn-off. A one-page bio is standard length; a longer bio is fine only if your story warrants the additional pages. Otherwise, less is more.

10. Not keeping it current. Your bio, just like your pictures and the other elements in your press kit and website, need to be kept up to date.

11. Not keeping it to a standard format. Although you may be tempted to let your creativity run wild with stylized, fictionalized prose, it may be off-putting or confusing to your readers.

12. Don’t puff up your credits. For a new artist without significant history, it is preferable to emphasize elements of your personality, creative process, or an interesting fact about your upbringing or inspiration, but again, only if it relates to and is reflected in your music.

It you’re not comfortable as a writer, penning your own bio may be as frustrating and fruitless as trying to take your own pictures. Hiring a pro that understands the marketplace and your music is a worthwhile investment. Although you may be tempted to ask a friend with journalism experience to assist you, make sure that he or she can capture your music, and your individuality, in sparkling prose specific to music. Don’t be intimidated, and make sure the writer will be amenable to making changes, corrections and rewrites until you’re satisfied; it’s your bio.

About the Author: Dan Kimpel

Dan is the author of best selling music biz books, Electrify My Soul: Songwriters and the Spiritual Source (Cengage/PTR); How They Made it: True Stories of How Music’s Biggest Stars Went from Start to Stardom (Hal Leonard) and Networking Strategies For The New Music Business (ArtistPro/Thomson) the follow up to his best-selling title, Networking in the Music Business. Kimpel has penned over 200 bios for clients ranging from Grammy-Award winning producers to independent artists. For more on bios visit his website.