💡✍️ADN #171: The Musician's Tax Strategy
Feb 22, 2026Keep more of what you earn with 5 simple deductions -
Most musicians overpay on taxes.
Because they don’t know how to track expenses properly.
There is a good chance you are leaving money on the table.
Here are the 5 biggest deductions not to miss, and the IRS rules behind each one.
1. Home Studio
If you have a dedicated space for making music, the IRS gives you two options:
Simplified Method:
$5/sq ft in 2024, rising to $6/sq ft in 2025.
Max deduction: $1,500–$1,800.
No depreciation headaches.
File it on Schedule C, Line 30.
Actual Expense Method:
Calculate your studio’s square footage as a percentage of your home.
Deduct that percentage of rent or mortgage interest, utilities, insurance, repairs, and internet.
File using Form 8829.
The catch: the space must be used regularly and exclusively for music.
A bedroom that doubles as your studio won’t qualify.
Pro tip: the simplified method lets you avoid depreciating your home’s value — which can trigger capital gains issues if you sell later.
You can switch between methods year to year.
IRS Publication 587 — Business Use of Your Home
2. Vehicle Expenses
Every mile to a rehearsal, show, session, or music meeting is deductible.
Two options:
Standard Mileage Rate: 67¢/mile for 2024, 70¢/mile for 2025, and 72.5¢/mile for 2026.
This rate covers gas, insurance, maintenance, repairs, tires, registration, and depreciation — all in one number.
Actual Expenses:
Track every dollar spent on gas, insurance, maintenance, and depreciation.
Deduct the business-use percentage.
What most musicians don’t know: parking fees and tolls are deductible on top of the standard mileage rate.
And if you start with actual expenses in year one, you’re locked into that method for that vehicle.
Starting with standard mileage gives you flexibility to switch later.
The IRS expects a contemporaneous mileage log — meaning you track it as it happens, not from memory in April.
Apps like MileIQ make this painless.
3. Equipment Depreciation
Here’s where most musicians leave the biggest money on the table.
Yes, gear over $2,500 can be depreciated over 5–7 years.
But there’s a much better option most musicians never hear about.
Section 179 lets you deduct the full purchase price of equipment in the year you buy it.
The 2024 limit is $1,220,000 — far more than any musician will spend.
After the One Big Beautiful Bill Act passed in mid-2025, the 2025 limit jumped to $2,500,000 with 100% bonus depreciation reinstated.
This applies to instruments, recording equipment, PA systems, lighting, monitors, microphones — all of it.
Used gear qualifies too, as long as it’s new to you.
The only requirement: it must be used more than 50% for business.
File it on Form 4562.
That $3,000 interface you just bought?
Deduct the whole thing this year instead of $600/year for five years.
IRS Publication 946 — How to Depreciate Property
4. Education
Anything that maintains or improves your skills as a working musician is deductible:
Music lessons, production courses, mixing tutorials, books about the music business, software training, conference tickets, masterclass subscriptions, workshop fees.
The IRS rule: the education must “maintain or improve skills needed in your present work.”
A musician taking a music production course?
Deductible.
A musician getting a nursing degree?
Not deductible.
Beyond the deduction, look into the Lifetime Learning Credit — up to $2,000 per tax return for qualifying education expenses.
Available to single filers earning up to $90,000.
This is a credit (reduces your tax bill dollar-for-dollar), not just a deduction.
It’s potentially more valuable than the write-off.
IRS Topic 513 — Work-Related Education Expenses | Publication 970 — Tax Benefits for Education
5. Marketing & Promotion
Every dollar you spend getting your music in front of people:
Social media ads, album artwork and design, website hosting and domain registration, press kit photos and videos, streaming promotion services (SubmitHub, Playlist Push), PR campaigns.
What most musicians miss: hiring freelancers counts too.
The photographer who shot your press photos, the designer who made your album cover, the video editor who cut your music video — all deductible.
Software subscriptions like Adobe Creative Suite, Canva Pro, DistroKid, TuneCore, CD Baby, Mailchimp, and ConvertKit are deductible.
So are business meals with venue owners, promoters, producers, and booking agents (50% deductible in most cases).
All of this goes on Schedule C under advertising or other business expenses.
The Hobby Trap (Don’t Skip This)
None of these deductions matter if the IRS classifies your music as a hobby.
The safe harbor rule: show a profit in 3 out of 5 years.
But even if you don’t hit that, the IRS uses a 9-factor test that includes whether you keep proper books, operate in a businesslike manner, depend on the income, and have expertise in the field.
Music gets extra scrutiny because it involves “personal enjoyment” — a factor the IRS weighs. Protect yourself: keep a written business plan, maintain organized financial records, and document how you’re trying to make your music profitable.
IRS — Hobby vs. Business Rules
The Hidden Tax: Self-Employment
If you earn $400+ from music, you owe 15.3% self-employment tax on top of income tax.
That’s 12.4% for Social Security and 2.9% for Medicare.
The silver lining: you can deduct half of your SE tax on your 1040.
But many musicians don’t realize this tax exists until they get hit with it at filing time.
The Math Example
Music income: $30,000
No deductions → pay tax on $30,000
With $10,000 in tracked deductions → pay tax on $20,000
At a 25% tax rate, that’s $2,500 back in your pocket.
Factor in self-employment tax savings and it gets even bigger.
The Real Problem
Most musicians don’t have a tax problem.
They have a tracking problem.
A separate bank account.
Photographed receipts.
Categorized expenses.
Monthly reviews.
That’s the system.
But let’s be honest, spreadsheets get forgotten.
Receipt photos get lost.
Categorizing transactions is tedious.
And most accounting apps weren’t built for how musicians actually earn money.
That’s exactly why we’re building ArtistBooks.
One platform designed specifically for musicians to track income across every stream — live shows, sync, merch, streaming, publishing and much more — categorize expenses into IRS-ready deductions, log mileage, manage invoices, and see your real tax picture in real time.
Calculate your commissions, merchandise costs, and tour budgets.
A financial command center built from the ground up for how artists actually work.
We’re getting close to launch.
If you want early access, click here.
You can take a look at the demo here.
Links referenced in this issue:
- IRS Pub 587 — Home Office
- IRS Standard Mileage Rates
- IRS Pub 946 — Depreciation
- IRS Topic 513 — Education Expenses
- IRS Pub 970 — Education Tax Benefits
- IRS — Hobby vs. Business
See you next Sunday -
Neil