The income tax filing deadline in the U.S. approaches, and jazz musicians in particular know it. The overwhelming majority of jazz musicians are freelance performers (and often freelance teachers, composers and other music-related service providers). But the informal aesthetics of the jazz world often extend to its business practices as well, with its handshake deals and cash payments. That makes it quite difficult to keep track of income and expenses when it comes time to report to the Internal Revenue Service.
It can be to musicians’ benefit to keep meticulous records. Businesses, including people who are self-employed businesses unto themselves, file their taxes differently, and are eligible for different tax benefits. For example, they may deduct business expenses before paying social security taxes, and this can include manager and publicist fees, sidemen payments, instrument purchases, rehearsal space rental and so forth. (Some musicians even set up separate companies — often a Limited Liability Company, or LLC — to take advantage of further intricacies in the tax code.) Continue reading