So for some of us who play gigs at places and make very little $ while investing a lot into gigging. How did you fair? Do you even file? What things do you claim?
I mean obviously whatever income you get, equipment, entertainment, transport, office space?
I can tell you my year was lame, mostly cause I took my Djing up from bedroom to full on club dj. I was for a while just djing at clubs for fun in Rochester, and doing bedroom djing with an s4. This year I decided to invest fully in equipment and such and it looks like my total investment was around 7000k with a new macbook pro, cdjs, krks, coffin, going to clubs to buy drinks and talk to owners and such, it really adds up when you look at it.
My total earnings…lol around 500 bucks total. And that with 6 months of giging regularly at house parties, clubs, and bars, much I had to give away since I was new to Chicago and now $ is finally coming in. most nights were only 40-50 bucks just cause as an unknown you don’t get huge followings. But i have finally found a few places that I can really make $ at.
IRS does require you to report ANY income you receive. The question is how do you report it. If you treat your business as a hobby, it gets reported on your 1040 as other income. All expenses related to business can be deducted up to the amount of hobby income. So, in your scenario your income of $500 will be reduced by your expenses not more than your income ($500). You will have $0 income to report. If you treat your DJ as a business, then it gets reported as business on a schedule C. All expenses related to business can be deducted. So, in your scenario your income of $500 will be reduced by your total expenses of $7,000, for a loss of $6,500. You can take losses for no more than 3 consecutive years before IRS begins treating your business as a hobby. If you treat it as a business, don’t forget to deduct cost of going to clubs as an expense, under research and development. Hope this helps.
True but only those that are 100% related to your business can be deducted at the 100% rate. Items such as downloads, records and DJ gear are all deductible at 100% although DJ gear can fall under various categories: Equipment / Renewal / Other (other can be smoke fluid etc).
Anything over £2,000 (i think) is a capital expense rather than a business expense and is treated differently although is still 100% deductible.
Other things that you rely on for your business may only be deductible at a lesser rate such as your car and petrol as these are also used for personal use.
Anything that can be both business and personal is given a percentage deduction which is usually worked out by your accountant.
Don’t forget to claim a percentage on your clothing. Shirts are the best as they can be named as 'Stage Wear" although no DJ clothing can be 100% percent deductable unless you can prove it ‘can’ (not does) only be worn on stage, like say a costume (should you be unfortunate enough to have to wear one).
You would have a tough time getting that passed the UK Tax man as your business does not 100% require it. You might get a percentage, say 30%.
Going to trade fairs such as BPM or NAMM is 100% deductible and so are all the expenses that go with it such as hotel and transport.
All this is incubant on you being registered Self Employed in the UK.
Interesting post Killa St.Louis, very interesting indeed.
Thanks for the tip Killa! I got a lot of tips from my other DJ friends about this stuff. I bedroom djed for a long time, and was on and off with djing. But finally took it seriously to play out more along with my full time job. If I can make it a second job in the future that would be great.
I dunno I tend to disagree with that Karlos. Alot of the gigs I’ve been getting is clubbing, and the following I have gotten is from clubbing. Its pretty damn important in Chicago to be seen out partying, djing, and having good connections, otherwise you will never get a job in town.
I feel much more comfortable claiming clubbing then clothing.
I basically claimed equipment, tickets to clubbing and drinking, gas and travel, meals, expenses such as CDs to burn, usb drives, music downloads, etc. I could have claimed a lot more but I decided to not press my luck and raise any red flags. Also that way if I ever get audited, it will look like I underestimated alot of my expenses. The assets I claimed were exact because I have all the receipts to that, or credit statements. But the clubbing and such was more of an overall percentage, I claimed about 30-50% of those total cost. Since it makes sense for an investing DJ to have these expenses the first year. I’m hoping next year I can get about 2-3k in income from this. That way showing that I am growing in the IRS’s eyes. From what I heard from other DJs that play out it took them about 3-5 years to break even. I’m shooting for the same. I think I can probably make the difference and break even by then thus keeping it as a “hobby” but a taxable income by the IRS later on. Therefore claiming my DJ gear lust for future years to be claimable.
Last year I gave away a lot of freebies to establish myself. Now I net about 4-5 gigs a month. But the pay isn’t great yet. But If I can net about 200-400 a month, I should be on track.
Although when I move to SF I will be set back again…
For anything to be a 100% deductible expense in UK it has to be 100% used for your business. Of that i am certain.
Im not saying that you cannot claim your clubbing expenses but they are not 100% deductible in UK as you cannot ‘prove’ that it is 100% business and not personal.
Very possible that the IRS see things differently to HMRC (Her Majesty’s Revenue & Customs).
In all honesty, I have never even thought about claiming for clubbing.
Ill be speaking to my accountant. It cost me about £1000 to go to Glastonbury last year when you add up the van hire and ticket and booze
Here’s a question — what about Craigslist purchases? (Or other private sales of used equipment, for that matter.) No receipt there… can you still claim those purchases? (In the United States… since the UK is also being discussed here I thought I’d clarified).
Just asking because I snagged a QSC RMX2450 amp and pair of Yamaha S155IV speakers for $550 in great condition earlier tonight from a Craigslist ad. Great deal!
Yup. You certainly can. As long as you have the email of the transaction deal. I have emails showing the prices I negotiated. I have stuff I bought from ebay and paid for with paypal, and some craiglist stuff, as long as you have the email chain its ok I think.
Karlos, you can claim percentages of things, just like home offices, and such. I was also weary hence I only claimed about 30% of my total clubbing expenses.
Yeah totally. I get a home office allowance that accounts for electricity etc.
The definition is that it is a room in your home that has a desk, chair and computer.
Unfortunately as theres a computer in every room in my house apart from the bathroom i cannot claim for 5 offices
you can claim concert/festival tickets or ticketed nightclub events here in australia.. and im sure general nightclub entries too if you ask them for a taxation receipt. you can only claim booze up to a certain amount if you can prove its work related, ie taking a promoter out for dinner to try and get future gigs.
you can claim $X amount a day for meals when working for yourself, ie if you are djing on a day when you didn’t work your regular day job.
Yes I did this to some extent as well. But I was weary claiming it all would bite me in the ass and get me audited. I would rather claim a little bit, and stay under the radar then trying to gain an extra couple hundred bucks. But i totally agree, I claimed concert tickets etc. I was able to pull credit card statements for club transactions, and ticket purchases. Thats how I did it. Anything I paid in cash with that I didn’t save my receipt for I considered a wash. But also many of those times were just me going out to meet new people, which could in turn be called marketing and promotion, but I wasn’t trying to show that partying was what my 2nd job was.
I’d be a lot more careful and conscious of expense reporting things if Djing was my full time job, or only job. Since I have a really great full time job and my 2nd job "hobby is djing to get gigs I’m not trying to claim everything.
Also yes on the not turning a profit is 3-5 years. Many companies don’t turn profits then, but if you can show a trend of growing and expansion you have more of a case to be able to continue claiming aspects of that business. I’m not trying to get rich off DJing, but if DJing can break me even on gear, music, and going out to promote myself more I certainly will try to keep doing it.
But you never know there are some very successful local djs who 2nd job djing rivals people first jobs easily!
Everyone fears the word audit, but there are different types of audits. As long as you are not intentionally attempting fraud, you should report everything you are entitled to. The IRS will request receipts. If you can’t provide, they will just remove that deduction. It is everyone’s responsibility to obtain the maximum tax refund they are entitled to. IRS will only conduct an in depth audit if they suspect fraud. Just like any crime, they must prove the fraud. Claiming a deduction you reasonably believed appropriate is not fraud.
Owe the government money?! you must be doing something wrong.
- you just need to install a desk in there and your sweet haha