End of Financial Year Tax Tips for Musicians
Tax time is stressful for those working in the music industry. Most of us have multiple income sources including teaching, performing and other full-time or part-time work. Gathering tax information is complicated but ignoring it means you miss opportunities to save big bucks. Here are my top tips to save at tax time*:
Tip #1: $20,000 instant asset write-off for small business
The biggest opportunity is the current instant tax write-off for small business assets costing up to $20,000. If you have an ABN and report your income from musical activities for tax - as opposed to music as a hobby - you may be able to purchase gear worth up to $20,000 (each item) before 30 June and get an immediate tax deduction for it this year.
If you’re a performing artist, that could include any gear you need to perform - instruments, amps, effects, PA, lighting and back line.
If you’re a music teacher, maybe it’s time to upgrade your computer or instruments you use to teach.
Remember that what you can legitimately claim depends on what you do and from where you earn income - something to discuss with a tax agent. Which brings us to Tip #2.
Tip #2: Maximise your deductions with the help of a good Tax Agent
An experienced Tax Agent who really understands musicians will help you claim entitlements. A good one will more than cover their cost with the extra tax refund they secure. And their fee is also tax deductible!
Your tax agent will guide you through work-related expenses you can claim - which for a Performing Musician might include:
- Car expenses
- Travel expenses
- Mobile phone bills
- Agent fees
- Accessories - strings, sticks, books etc
- Equipment maintenance - set ups, repairs, restrings, etc
- Home Office - internet, computers and printers, rent, phone bills, electricity
- Professional library (sheet music, references, dictionaries)
- Seminars, conferences and Training Courses
- Technical or Professional Publications
- Theatre and film tickets
- Tools and equipment
Tip #3: Don’t procrastinate. Do it now!
A little planning and action before 30 June, then lodging your tax return in July could mean a big fat tax refund a few weeks later. Then you can buy more cool gear. Wouldn’t that be awesome?!
*Advice contained in this article is intended for general information purposes and may not apply in all circumstances. Please seek independent advice from a tax professional for your specific situation.
About the author: Richard Berkman CA is Managing Director of Big Music in Crows Nest, Australia’s leading independent musical instrument retail store and music school.