Freelance Musician Tax Deductions You Can Claim

A freelance musician operates as a sole proprietor, meaning the IRS considers you self-employed. If your net earnings from self-employment are $400 or more, you are responsible for paying income tax and self-employment taxes for Social Security and Medicare. Tracking all business-related expenses is necessary, as these costs reduce your net income and overall tax liability.

Categorizing Your Business Expenses

Instrument and Equipment Costs

The ongoing costs to maintain your professional gear are immediately deductible business expenses. This includes instrument repairs, tunings, and equipment insurance premiums. Consumable supplies like guitar strings, reeds, valve oil, and drumsticks are also fully deductible in the year of purchase, as is peripheral equipment like cables, amplifiers, and microphones.

The costs of software essential to your music business, such as annual subscriptions for Digital Audio Workstations (DAWs) or audio plugins, are also deductible. These immediate expenses are distinct from purchasing a new, high-value instrument, which is treated as a capital expense recovered over time through depreciation.

Travel and Vehicle Expenses

Travel to performances, rehearsals, and auditions is a core business activity with deductible costs. When using your personal vehicle for business, you must choose one of two methods to calculate your deduction for the year. The first is the standard mileage rate, which for 2025 is 70 cents per mile.

The alternative is the actual expense method, where you deduct a percentage of all vehicle operating costs, including gas, repairs, insurance, and registration fees, based on the ratio of business to total miles driven. For long-distance travel away from home overnight, you can deduct costs for airfare and lodging, plus 50% of your meals.

Home Studio and Office Costs

You may qualify for the home office deduction if you use a portion of your home exclusively and regularly for your music business. The space must be your principal place of business or where you regularly meet clients. A dedicated room for practice and recording would qualify, but a multi-use corner of a living room would not.

There are two ways to calculate this deduction. The simplified method allows a standard deduction of $5 per square foot, up to 300 square feet, for a maximum of $1,500. The regular method involves applying your home’s business-use percentage to actual expenses like rent, mortgage interest, utilities, and insurance.

Professional and Marketing Expenses

Expenses to promote your music and manage your career are deductible. This includes:

• Website hosting fees and domain registration
• Business cards, promotional headshots, and flyers
• Commissions paid to agents or managers
• Dues for professional organizations and unions
• Continuing education, such as workshops or lessons that improve your skills
• Subscriptions to industry-specific magazines and journals

Other Common Expenses

Several other expense categories are relevant for freelance musicians. Fees paid for professional services, such as to an accountant for tax preparation or a lawyer to review contracts, are deductible. If you maintain a separate business bank account, any associated service or transaction fees are also deductible.

Another deduction is the cost of research, which can include purchasing sheet music or tickets to concerts to study performances and learn new techniques, provided you document the business purpose.

Understanding Depreciation for Major Purchases

Depreciation is the method for recovering the cost of business assets with a useful life of more than one year, such as a professional-grade instrument or major studio equipment. Instead of deducting the entire cost at once, depreciation spreads the deduction over the asset’s useful life. Two primary options are available for handling the depreciation of these large purchases.

Section 179 Deduction

The Section 179 deduction allows you to treat the cost of qualifying property as an immediate expense. You can deduct the full purchase price in the year the asset is placed in service, up to a maximum of $1,250,000 for 2025. This limit decreases if the total cost of all property placed in service during the year exceeds $3,130,000.

To qualify, the property must be used more than 50% for business purposes. This deduction is elected by completing Part I of Form 4562, “Depreciation and Amortization.”

MACRS

The Modified Accelerated Cost Recovery System (MACRS) is the standard method for depreciating business property. MACRS assigns assets to property classes, which determine the number of years over which the cost is recovered. For instance, computers are generally 5-year property, while office furniture is 7-year property. This method results in smaller annual deductions spread over a longer period compared to Section 179.

Required Documentation and Recordkeeping

The Importance of Separation

A fundamental step in tracking your finances is to maintain a separate bank account and credit card for your music business. All income from gigs, royalties, and lessons should be deposited into this account, and all business expenses should be paid from it. This practice creates a clean, transaction-by-transaction record that is easy to categorize.

What to Keep

For every business expense, you must have proof, such as receipts, invoices, or bank statements. A valid receipt should show the vendor’s name, transaction date, amount paid, and a description of the item or service purchased. A credit card statement alone may not be sufficient proof. It is recommended to keep these records for at least three years from the date you file your tax return.

Specific Record Types

Certain deductions have specific recordkeeping requirements. If you claim vehicle expenses using the standard mileage rate, you must maintain a log detailing the date, locations, business purpose, and total miles for each trip. For the home office deduction, you need records supporting your calculation, such as rent receipts, utility bills, and precise measurements of your home and the dedicated business space.

Organization Methods

How you organize your records is a matter of preference, but consistency is needed. You can use digital accounting software to link your business bank account and automatically categorize transactions. Alternatively, a detailed spreadsheet or a physical system of organizing paper receipts into folders by month or category are effective methods.

Claiming Deductions on Your Tax Return

The Primary Form

As a self-employed musician, you will report business income and expenses on Schedule C (Form 1040), “Profit or Loss from Business.” This form is filed with your personal Form 1040 tax return. If you operate more than one distinct business, you must file a separate Schedule C for each one.

Mapping Expenses to the Form

The expense categories you track correspond to the line items in Part II of Schedule C. For example, vehicle expenses are reported on line 9, the cost of supplies goes on line 22, and travel is entered on line 24. Other costs, like union dues or agent commissions, are listed under “Other expenses” in Part V and totaled on line 27a.

Reporting Depreciation

If you are taking a depreciation deduction, you must first complete Form 4562 to determine the allowable amount for the year. The total depreciation deduction calculated on this form is then carried over and entered on line 13 of your Schedule C.

Calculating Your Tax

The final result of Schedule C is your net profit or loss on line 31. This number is used to calculate your self-employment tax on Schedule SE. It is also reported on Schedule 1 of your Form 1040 to determine your income tax. This net profit figure is the basis for making estimated quarterly tax payments to avoid underpayment penalties.