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 “Serving Artists, Serving Fans” discussion, moderated by Billboard international bureau chief Mark Sutherland, focused on creating value from the relationship between fans and artists. MidemNet is a two-day conference covering the digital music business.

Bryan Calhoun, VP of new media and external affairs at Sound Exchange, is a consultant to Kanye West and says the rapper is “very active with communicating with his fans” on his blog and sometime posts seven or eight times a day. His music recommendations on the site have made him something of a tastemaker, or “curator for what is cool” according to Calhoun.

“It’s definitely him,” Calhoun added, referring to the entries at www.kanyeuniversecity.com/blog. “It’s totally authentic. You can’t pay to put things on there [West's recommendations] — people have tried.” He declined to say who had tried.

The “significant amount of traffic” to the blog also means it makes money from advertising, Calhoun added.

Mailouts and annoucements to fans are specifically from West, never attributed to Island/Def Jam, which Calhoun said is crucial in personalizing the service and making the connection. He stressed that West is “very particular” about the messaging and there is complete control over his online activity at the blog and other platforms.

“The digital footprint we’ve amassed for him is really significant,” said Calhoun.

Australian pop singer Sia, one of the artists recommended by West on his blog, is represented by another of the panelists, Tim Clark of IE Music. He also manages U.K. pop act Robbie Williams.

Sia was dropped by a major a few years ago, but Clark said that has worked out for her. “Now we wouldn’t have it any other way,” said Clark. “It meant we could go out and find the best service providers in the world.”

He said that technology “allows fans to connect with the fans and vice versa” and he doubted that majors are even the best option for acts that require global marketing. “We are happy to talk to majors about global marketing solutions, but at the moment their costs are too high,” said Clark. “What we have to give away is ludicrously high.”

Clark also wanted to see some of the power swing back to artists, away from Apple iTunes and MTV. “I don’t think artists have got a fair return,” he said. “I think he [Steve Jobs] got a great deal from us, as did MTV.”

Fans of late artists also have to be carefully considered, too, according David Schulhof, co-founder and co-CEO of U.S. publisher EverGreen Copyrights, which controls rights to dead artists including folk singer Nick Drake and Roy Orbison.

Schulhof announced during the discussion that Evergreen has signed a deal with Jack Johnson’s Brushfire Records label to release a Nick Drake tribute album, featuring covers by Johnson, Dave Grohl, Eddie Vedder and Norah Jones.

“Fans are willing to pay for that kind of product,” he said. “I don’t think labels are doing that and I certainly don’t think publishers are doing that.”

The recording process was filmed and will be released as a DVD package. It will also include the late actor Heath Ledger’s version of “Black Eyed Dog,” filmed in late 2007 for a multimedia installation about Drake but never officially released.

Almost all rappers I speak with focus on cd sales as the primary way they will generate income in the future.  I think this is a mistake because the internet and mp3 enabled devices have made buying a cd obsolete.

If we treat P2P file sharing networks as a business and compared P2P to the biggest music retailers - WalMart, Amazon, and iTunes - P2P wins hands down in the shear amount of music they distribute.  This tells us that people want to to get their music immediately and for free.

But how do we feed ourselves if we give away our music?  What we must realize is that making our music easily accessible is a tactic to grab people’s attention.  Once we get their attention, tell them our story, and engage them in on going two-way communication we will greatly increase the amount of ticket sales and merchandise sales.  And we will then open up new worlds of sync rights (podcasts, video games, tv, movies, ect.).  After that new revenue streams will emerge that we had never considered.

It’s only a matter of time before we see very successful artists emerge upon this new shift of paradigm.

Here are three keys to success I see in the new future of the hip hop music business:

1. Make your music as easily accessible as possible.  This means breaking down the barriers imposed by the current Recording Industry.  Use new technologies like reverbnation, imeem, myxer, hypemachine, and ccmixter. Pay special attention to any website that allows users to download, rate, and comment on your music.
2. Tell your story.  The story you tell will keep a fan’s attention.  Put your music in context.  Regularly post videos about yourself and fine tune the story about what you stand for and why.  Here are some great questions to ask yourself when building your story.
3. Build long-lasting relationships through conversation.  Allow your fans to participate in what you do.  Enable people to make their own remixes and mash-ups of your music.  Lead your followers.  This is how you build a movement.  Technologies like twitter, facebook, and blogger are great communication tools.

Momentum

When bands have momentum there is a buzz and an intangible, yet significant, energy around them. It can be seen when they play, it can be felt from their recordings and it is usually the factor that sets them apart from the pack.

I think there are 2 kinds of momentum(s) for bands: Outer and Inner

Outer momentum is what people can see:

• New shows to play
• New music to release
• New merch to sell
• New tangible “real” things

Inner momentum is a different beast.

Inner momentum is essentially a battle for your mind and your heart…. that makes it more difficult to understand and quantify. Even the attempt to define inner momentum on a broader scale is quite ludicrous, because everyone will define inner momentum on there own terms.

Suffice it to say that when you have inner momentum you know it. You feel your band is going places and growing as a musical entity.

When you don’t have that momentum you know that things are slowing down. Arguably the best definition of inner momentum is the lack of it. Things are not moving for you. The music, or the band, or the live show, or whatever, is stagnant and will not get better unless you take back your heart and your mind first.

So here are some of my personal tips for keeping and sustaining your bands inner momentum:

Appreciate what you already have. Bands are typically egotistical. They love their own music and are often puzzled why the Killers are bigger then them. But instead of looking at the glass half empty, flip that script. Look at all that you already have.

• Do you have fans? Awesome!
• Do you have good gear? Great.
• Do you have a solid lineup? Mint!
• Are you alive and breathing?! You Go!

Read the rest…

Today vs. Yesterday vs. Tomorrow
Do everything in your power to develop and maintain your fan base.
A lot of you may read this and say “that’s freaking common sense”. A lot of you will realize that you aren’t talking to your fans, or doing this or doing that, and a special note for the ones of you who get nothing from this and aren’t willing or able to take a look inside to see what you really aren’t doing and can’t take constructive criticism, you will fail in this industry, because there is always someone better to take you place, and no matter what we have to band together in this biz, and people skills are INTEGRAL.

1) TALK TO YOUR FANS!
Seriously talk to them, get to know them, their names, what they do for work, are they married, kids, etc… This makes them feel personally connected to you. If you are playing at a restaurant, recommend something you eat there that you enjoy or a good drink you like. Take your break with them, break your band into groups of two and sit with people for a few minutes to talk. If you are a smoker and go outside to smoke, invite some of them with you. If you and some of the guys are going to do a shot, cheers the crowd. (If allowed by the club!) When a group of people you know walk in, announce them to your audience as your biggest fans or something clever, say hello. Trust me it’s cool for them.

2) HAVE SPECIAL EVENTS
Birthday party’s are great. If you are booked on a band members birthday or around it, make a flyer and something for your website and invite everyone to come and celebrate with the band. There are more than likely at least four of you in the band that means you can average a special event almost every quarter of the year.

We do an event at a smaller venue twice a year, and have for four years now. We play the Sunday before memorial day and the Sunday before labor day at the same place each year. We hype it up, and the last one we hit 220+ people through the door. We have a deal with the club that if we break a certain # in sales dollars we get a percentage of the ring as well. It’s on a sliding scale, so if we break $1200 we get 5% of that so it’s an extra $12 a man. $1800 it goes to 7.5% $2000 is 10% $3000 is 15% $5000 is 17%. We usually make enough from the ring % alone to pay for our drinks and get breakfast on the way home.
You do the math…
Club pays $750
Door Pays $1100
$1850
Divided By 5
$370 per member, twice a year, ON A SUNDAY NIGHT.
When we started this, we asked the club for $350 and if they rang $1500 they paid us $500. Then we went to work promoting it. Now people email me a month in advance or a few days after the last one saying they can’t wait. We made a Sunday night twice a year special to our fans, and profitable for us. Here is how I did it: I let the fans make the set lists for that night. I had a contest on the website with four prizes, three of the winners get to write one set list and the fourth gets to supply the break music. It’s a holiday weekend when we do this thing, so we inform people that for an extra $15 they can ride home in a party bus. We simply tell the bus/limo company that there will be a minimum of $100 that they make if no one chooses to ride, and we pay that if it would happen, but it never has. The deal we worked out with the company is that it’s $15 anywhere in the county. It’s a Holiday weekend, but not one where all their busses are rented, so it’s not a big deal for them to come out to make a least $100. We always RIDE in the bus. So look at it this way, a cab would be more than $15 for anyone, and a DUI costs $$$$ so each band member pays the $15 themselves. Joins the masses and kicks it with the fans in a party bus. They think it’s great, too!
Enough about that…

3) CONTESTS!
Like I mentioned above, we have contests frequently. Just don’t over do it, and actually do something cool. Free shirt, the set list thing from above, design your next bumpersticker or shirt, name a song, first fan to bring ten people to a show gets breakfast after the show with the band, (the band pays) there are a zillion things, just rack your brain.
Just make sure there is some reward, and be creative.

4) ASK FOR HELP
Get your street team happening! DO IT NOW!
Another great way to involve your fans is to downright ask for help. Ask a few good looking girls to go pass out promos with you, ask them to always repost your stuff on myspace, ask them to let their friends who are getting married or having party’s know about your band, and to consider booking you. Residual business is what we in this business thrive on, and there is nothing wrong with asking for it.

5) HAND OUT INFO
When a band like yours, or an event with attendees that are your target audience is in town go to it, stand outside, and hand out a postcard that is flashy looking on one side, and get this… it’s a big one… HAS YOUR SCHEDULE OF GIGS ON IT!

Make sure to include some light contact info like myspace, website, etc.. also be sure to describe what you do. You might not get them to your show this time, but if they hit your myspace and listen to a song, maybe they will sign up on your email list, and eventually give in and come see a show… TAKE YOUR NEXT MONTH OR TWO’S SCHEDULE PRINTED OUT ON A 4’X 6’ POSTCARD OR PAPER TO EVERY GIG…GIVE 20 OF THEM TO EACH BAND MEMBER TO HAND OUT…SET A STACK BY YOUR TIP BUCKET… (please tell me you have a tip jar)

6) BRAND
I think it’s important to be instantly recognizable, I think it makes you memorable.
Try using a few different logos, and pictures. Just a few, maybe two each. Put your website on everything. We wear uniforms (in the cover/show band) people always know who we are by that. Plant the seed in their brain, then when something comes up you will be on their mind.

7) BE NICE AND NETWORK - BEWARE OF YOUR ATTITUDE & REPUTATION
Doing something nice for someone still goes along way, and first impressions really are that important. Persistence is key.
If you are a jerk on a gig, word will travel fast, and NO ONE cares how good you play or sing or look. You will soon find your self out of work. I have seen it happen many times.
I’m not harping on anyone, just saying it’s always time to check your attitude…

We send Christmas cards to all of our booking agents, club owners, radio stations, even some fans, etc… We have an annual BBQ for other musicians and some select fans (which we have a contest to let the fans win) we pay for and cook the food, supply games for the guys with kids, and people can bring the booze if they want. It’s a great networking tool, and it’s cheap. Guys remember it, and it’s also a freaking blast! We spend a lot of time on the phone and sending out promo packs, to event planners, wedding planners, and hotels that have weddings / private party’s. I call first and use my best polite phone guy voice, ask permission to send them a package and dvd, verify the address, then tell them I’ll follow up in a few weeks to make sure they got it.

Then I ACTUALLY FOLLOW UP! I say hey, thanks for taking the time to look at the package, now that you have seen how great the band sounds and looks, I hope that you will keep us in mind for your future events. I verify that they have my contact info and bid my farewell.

Another thing we do that works is this: I had postcards for the holiday season made last year, I think I got like 2500 for $100 full color front and back. They just say hey if you are planning your holiday office party, or a Christmas party with friends, we are available for booking. We can also dj your event. On the other side there is a blank box I can put upcoming dates in on a sticker or write it in. It also says we do weddings, party’s, and are self contained. (Sound lights, etc…) I send these to Law Offices, Doctors offices, Staffing places, and any place with a large staff, or any place that makes a lot of money! It’s cost me maybe 185 bucks with postage, and I’ve closed three gigs with the full band, a trio with a piano player and singer, and 6 dj jobs. Small investment - big return.

Young Gio

Born in the state that everyone loves to hate LOS ANGELES, California. From there, Young Gio relocated to LONG BEACH California. Young Gio AKA Young 2 Da G is an up and coming new voice of the west coast emerging in the hip hop game. Gio has released over 6 mixtapes and has been featured in 17 mixtapes. Gio has started his own record label FOREVER LEGENDZZ RECORDS and is apart of FCC.

28 days of madness is one of the most anticipated and successful mixtapes that Young Gio has ever dropped (You can download below).

http://www.younggiomusic.com/

http://www.myspcace.com/younggiomusic

BRO STYLZ

Today the Hip-Hop Gospel Movement has many talented artists, with hi-tech word play, great delivery and stage performances that keep the churches entertained…but what about the streets? The millions of souls that feel they believe and want to know more of GOD, but don’t want to be judged or looked down upon by the self-righteous telling them what they should or shouldn’t be doing and not embracing and teaching as they should. Who represent the broken, the torn, the hurt, the addicted and the fallen? “Bro. STYLZ” does!!

http://www.myspace.com/brostylz

• Soulja Boy makes the cover of Billboard. His sophomore album, iSouljaBoyTellem, is due December 16th on Interscope.
• 50 Cent’s Kyte video channel claims over 50 million views.
• The movie Slumdog Millionaire is collecting prizes while its soundtrack is due December 23rd on Interscope including tracks with M.I.A. and BlaaZe.
• Recent hip hop releases include Common’s Universal Mind Control, EPMD’s We Mean Business and The Pharcyde’s Bobby Evans Mix.
• VidRap presents the Three/21 Films Collection featuring rap videos by Three/21 media.
• ProHipHop syndicates Adam’s World’s Artist of the Week feature.

From ProHipHop

Rain is the 1rst artist to be featured on Platinum Mornings. Click the link to listen to the candid and even emotional interview conducted by Platinum!

Rain woke up early to talk about her discography and her journey in music. Hear from Rain where she’s been and where she’s going….

Website: http://www.myspace.com/iamrain2

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