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Musician Tax Tips
A sideman is a person who is
either subcontracted or hired as an employee to perform on recordings,
live shows or other productions. Just because you are acting as a
sideman does not mean you are not a business. You owe it to yourself to
track accurately your income and expenses from your sideman activities.
Any subcontractor that is paid 600 dollars or more in a single year
should receive a 1099 Misc from the bandleader. Any employee should
receive a W-2 from the bandleader. These documents are to be delivered
to you by January 31st to help you file your tax return. If you do not
receive these documents by that time, it does not relieve you of the
obligation to report the income on your tax return, but we do suggest
you contact the band leader and see what documents have been, or are
being prepared.
Touring artists and sidemen that are on tour are
entitled to write off meal and incidental expenses while on the road.
Only 50% of the meals can be deducted. There are two methods you can
use, actual expenses or the per diem rate. First you must realize that
not all business travel days qualify for the deduction. We count road
days as being one half day if you are at your tax home during anytime
during that day and full days when you are not.
Example: You play two nights 300 miles from your home base and stay
in a hotel on Saturday. You leave on Friday and return on Sunday. You
get half a day for Friday, a full day for Saturday, and another half
day for Sunday. Total days on the road are 2 in this example.
Per diem rates are different for specific areas around the country, but the average is $39 per day.
The same holds true while using the actual expense method.
When you are an employee or partner in the band (company) you may be
reimbursed for per diem by the employer. If this is the case, the
payments for per diem are non-taxable as long as they do not exceed the
maximum per diem rate. You must report all payments higher than the
maximum rate as income on your tax return. If this system is used, the
expenses cannot be written off on your return..
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