[Date Prev][Date Next]   [Thread Prev][Thread Next]   [Date Index][Thread Index][Author Index]

RE: Tax Strategies for LOOPERS

there is, however... an alternative.

i am the founder of an s-class corporation, an entity that i used in the
past to do large corporate consulting projects with, where i had to hire
staff and collect large bsuiness-to-business payments (ahh the good old
days).  since i've stopped doing this, having it around has been extremely
useful.  any corporation can be involved in whatever activities it likes,
according to what the board of directors has decided the direction of the
company should be.  when the board of directors, president and secretary 
all the same person (myself in this case), making decisions is very easy.
so my company went from 'technology consulting' to 'researching
profitability of music industry pursuits'.  what this means is that 
i can spend, regardless of the nature of the expense, is a loss for the
corporation.  (there are certain categories of things, like food, which 
into special deduction categories where less than %100 of the item can be
considered an expense).  the balance of the corporation at the end of the
year ends up on my personal tax return as negative income and therefore
lowers my taxable income.

i STRONGLY encourage anyone who has lots of miscellaneous expenses to
investigate sole proprietorships, LLCs and corporations.  they all have
interesting sets of tax and legal benefits.  for musicians, these types of
structures can be huge money savers.  also, they can aid organization of
your expenses... it's a huge time saver not to have to worry about what you
can and can't deduct.

the US tax system has many little loopholes built into it... take advantage
of as many of them as you can.


> -----Original Message-----
> From: nathan pease [mailto:n8pease@yahoo.com]
> Sent: Thursday, April 10, 2003 9:05 AM
> To: Loopers-Delight@loopers-delight.com
> Subject: Re: Tax Strategies for LOOPERS
> I spoke last year with the person who does my taxes about deducting
> music expenses, and the thing that I remember being key was that I be
> making money from music.  So you report your income from music, and
> then report your expenses from music.  For those of us with other means
> of income, you're allowed to report a loss for some number of years
> (three?), but at some point you're supposed to be making more money
> from your business venture (music) than you're spending.  If you report
> a loss for some number of years in a row it's helpful to provide proof
> that you are actually trying to make a profit, for example reporting
> advertising expenses.
> nathan
> On Wednesday, April 9, 2003, at 11:45 PM, John Tidwell wrote:
> > --- jimfowler <jimfowler@prodigy.net> wrote:
> >> how does one go about deducting music equipment
> >> purchases from your taxes?
> >> does music have to be your sole (or main) source of
> >> income...thus making it
> >> a business expense?
> >>
> >> -jim
> >
> > It's been a while since I've done this stuff, but...
> >
> > Income is a key word. You would need to be bringing
> > in some money related to the equipment in question
> > or at least have a business plan to show a reasonable
> > expectation of making a go of it.
> >
> > Business is another key word. Most of us make music
> > for fun. Maybe we call it a hobby or artistic
> > expression. Neither one counts for much on a tax
> > return. Business intent could be demonstrated by
> > keeping the equipment in an area dedicated for
> > business use. A port-a-studio in your bedroom doesn't
> > cut it. Building a studio in your basement or back
> > yard might.
> >
> > In any case, most of the equipment we use would be
> > depreciated over a number of years rather than
> > expensed all at once. In a business setting, guitar
> > strings might be expensed since they are "used up"
> > within a year. Your brand new Eventide is expected
> > to last a bit longer however.
> >
> > I seem to to recall that there are some special rules
> > that apply to performing artists. There might even be
> > an IRS publication devoted to the topic.
> >
> > I'm afraid that I dealt with more Amway salesmen than
> > musicians (shudder).
> >
> > John
> >
> >
> >
> >
> >
> >
> >
> >
> >
> > =====
> > John Tidwell
> >
> >
> >
> >
> > __________________________________________________
> > Do you Yahoo!?
> > Yahoo! Tax Center - File online, calculators, forms, and more
> > http://tax.yahoo.com
> >