You play the show. You record the spot. You should not be paying tax on gross revenue when the gear, the travel, and the agency cut are real expenses. We get §179 on the rig, document the per diem, and keep the IRS from calling your career a hobby.
Performance is a Specified Service Trade or Business under §199A, but most working musicians and voice actors are well under the threshold so QBI is fine. The bigger problems are §183 hobby loss exposure, missed §179, untracked per diem, and royalty income that lands on a 1099-MISC instead of a Schedule C.
Guitars, basses, keys, drum kits, controllers, mixers, monitors, microphones, interfaces, amps, in-ear systems, lighting rigs, road cases. DAW software, sample libraries, plugin subscriptions. Up to $1,160,000 of §179 expensing for 2024 plus 60% bonus depreciation on the overflow. We time the buy so the deduction lands in your highest-income year.
IRC §179(d); §168(k); §179(d)(1)(A)(ii) softwareTour van mileage, flights, lodging, tolls, parking, bridge fees, baggage for cargo gear. Meals on the road at GSA per diem rates (no receipts needed). Per diem applies only when you are away from your tax home overnight. We separate local gigs (no per diem) from out-of-town runs.
IRC §162(a)(2); §274(d); Rev. Proc. 2019-48BMI, ASCAP, SESAC, SoundExchange, Spotify, Apple Music, YouTube Content ID, sync placements. Active songwriter royalties belong on Schedule C as self-employment income. Passive royalties on a song written years ago can sit on Schedule E. We sort it correctly and track basis on master recordings for §1235 capital-gain treatment on sales.
IRC §61(a)(6); §1235; Reg. §1.61-8 (royalties)Booking agency commissions, manager percentages, AFM Local dues, SAG-AFTRA dues (for VO and on-camera), publishing administrator fees, distributor cuts (DistroKid, CD Baby, TuneCore). All ordinary and necessary, deductible against gross. We capture the gross-up so $100K gross less 20% agency reads correctly as $100K income with a $20K deduction, not $80K invisible.
IRC §162(a); Welch v. HelveringIf you report losses three years out of five, the IRS can argue your music or VO work is a hobby and disallow the losses. We build the §183(d) profit-motive file: business plan, separate bank account, time logs, marketing spend, advice from professionals, and prior profitable years. It stands up because it's real.
IRC §183(b), §183(d); Reg. §1.183-2(b) (9 factors)A dedicated booth or studio space qualifies for the regular home office deduction. Once income clears about $80K to $100K of net profit, S-Corp election can save SE tax even after reasonable W-2 comp. We benchmark to BLS 27-2042 (musicians and singers) and 27-2090 (voice and other performers) for defensible wages.
IRC §280A(c)(1); §1362; Rev. Rul. 59-221Gigging musician and part-time voice actor, age 35, $95K combined income 2024 across performance fees, royalty streams, and VO work. We moved to S-Corp mid-year, ran §179 on a new live rig and home booth upgrade, and rebuilt three years of per diem documentation.
$7,000 savedSE tax savings from the S-Corp split plus federal savings on $24K of §179 plus recovered per diem at marginal rate. State savings on top. §183 file in place to protect future loss years.