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DJ'ing, Money, Taxes, and Write-Offs.

This is primarily a question to the American jocks out there, but if anyone else has any advice I'd gladly take it.

Let me start off by saying that by no means am I a full-time DJ, however, I am starting to make a bit more money (all in checks with receipts) and travel a bit more than I previously had, and I'm really rather interested in properly accounting for my income in the hopes that I can take advantage of tax write-offs and/or breaks.

I'm wondering if any of you have any advice, tips, or notes on what I can receive write offs on (Gas? Equipment?), things I should be accounting for (I've already resolved to keep receipts for everything), and any other potential information that might be pertinent to this kind of situation.

The bottom line for me is that I'd really like to start to manage my money wisely now while I'm young - thanks in advance for any help

I wish

quote:

Originally posted by leph555 I wish

I'm pretty sure it should receive exemptions be like any other job, it's not as if I'm asking for "DJ Only Breaks."

I basically mean general breaks that any "small business" (or whatever the fuck it's considered) would get.

i claimed equipment and vinyl costs last year. for some reason i can only do that 1/3 years though. dont see why the american system would be too different. why not call an accountant come tax time?

quote:

Originally posted by pkcRAISTLIN why not call an accountant come tax time?

Yup, that's the plan a this point, I've already spoken with my father about what kinds of things to keep track of (receipts etc.), and I guess I'm just hoping that maybe someone on TA has gone through this all already and can lend a bit of advice

Glad to hear you could at least manage something though - gives me hope!

quote:

Originally posted by RJT Yup, that's the plan a this point, I've already spoken with my father about what kinds of things to keep track of (receipts etc.), and I guess I'm just hoping that maybe someone on TA has gone through this all already and can lend a bit of advice Glad to hear you could at least manage something though - gives me hope!

i didnt quite understand the law here, but i think i need to show a profit if i am going to claim each and every year. as a vinyl enthusiast its hard to post a profit, haha but the one-off claims saved me a SHITLOAD of cash last year. so definitely look into it!

If Jonathan Peters can do it, surely Rob van Turner can!

My mother is an accountant. I brought this up briefly with her.

By no means did we look thoroughly into it, but she believed that if you're making a certain amount of income off it, you can declare it as a job and thus write off things like records, equipment, etc, as legitmate expenses. Since you'll probably be making very little (in terms of an actual living), you should get some good breaks for that. However, if you aren't making a better income on it within several years, then you can no longer declare it as a job (I suppose it's a matter of "okay, you've been doing this for a few years and you still aren't making a living, find something else").

Again, this was just off the top of her head and is by no means confirmed.

Keep your receipts and make a record of every business/DJ expense you make and come tax time hire a REAL accountant that knows what he/shes doing (not H&R block type thing) and he/she can tell you what you can write off and what you can't... do some research in your area for a decent accountant.

Hope that helps.

Well, one thing I have already is a rock solid accountant (friend of the family for 30+ years, has done all of our taxes for ages), so if what it boils down to is just getting in contact with him on it, that's what I'll do.

Thanks for the information and advice guys

Thing is, do you want to trade off having a bunch of write-offs vs. paying taxes on whatever little you make DJing.

For me last year, I didn't make too much DJing, maybe 600-800$ so it made more sense to just keep it under the table, especially since most was in cash.

I only ever got 1 check from DJing and that was for the roof last weekend

quote:

Originally posted by Clovis Thing is, do you want to trade off having a bunch of write-offs vs. paying taxes on whatever little you make DJing. For me last year, I didn't make too much DJing, maybe 600-800$ so it made more sense to just keep it under the table, especially since most was in cash. I only ever got 1 check from DJing and that was for the roof last weekend

Oh I agree completely, but I guess I just want to know if I make a few grand over the course of a year whether or not it's in my interests to do this kind of stuff.

Basically I'm caught in limbo right now and so confused I just don't know what the best path is.

And just so everyone knows I'm not here to try and start any kind of pissing match about money, I'll say this - in reality the only reason I want to do something like this is because in the grand scheme of things, I really don't make a "living" at all off DJ'ing, and honestly I'm just looking for any way I can to maximize the efficiency of the money I actually make - and I can afford to keep upgrading the home studio/record bag.

For people like us who buy assloads of music, its nice to be able to get SOME kind of break for it.

I must have spent about 2500$ on download sites last year.

hey rob-

for my 2005 taxes I claimed some DJ related things like equipment, vinyl and such.

i don't remember exactly what i did on my 1040, but i did it the same way as if i were a small business....of course i "lost" much more money than i made.

it did have a positive impact on my refund...i think it's worth it if you spend more than a grand on DJ stuff a year....

but i'm no tax expert, i just went for it and everything turned out fine. if you get audited, then you might be in for some headaches however...

If it gets to a point where you're making a decent amount of money or have a good deal of expenses, it may be worthwhile to form a corporation. A corporation is treated as its own entity, which makes it easier to account for income and expenses and track the net income. Plus, corporations are taxed at a lower rate and you can carry over negative income. So if you invest a lot in your DJing this year and end up at a loss at the end of the year, you can carry over that loss to next year and count it against any positive net income you have. The result being that you pay lower taxes at the end of that second year.

For any more detailed information than that, talk to an accountant or check out irs.gov. I don't want to testify in your tax evasion trial.

I tryed to do it last year but the only problem is most clubs pay you in cash so it's kinda risky trying to claim gear and records without that paper trail. I still got away with it because it was rather minimal.

It boils down to the fact that the only real tax write off you can get being a DJ is being one of the massive guys that travels the world. Or being your weddings and birthdays *Cough* DJ that enjoys the greatest party hits of the 90's

Any genuine legitimate business related expense.

ALL music
related travel expenses
Cost of car
meal when travelling
equipment
Custom ear plugs
As an entertainer you can also claim for stuff like clothes.
You can buy a car and spread it out over 3 years here, which can often effectively write off your tax bill for those 3 years.
The above can often be allocated a % of use for business/personal, which you claim for (as in, if you use your car for personal stuff during the week, but for djing at weekends, you can claim 2/7 of it as business related.)

Thats all uk- but shouldnt be vastly different.
Over here you register as self employed (basically as a small company), so pay no tax at source, then have to self assess, and pay that tax at the end of the following year.


Go see a proper accountant.
if you arent making even a semi reasonable amount on a semi regular basis, just keep it cash in hand.

Oh and keep receipts for EVERYTHING. and I mean EVERYTHING. For 5 years minimum.

quote:

Originally posted by Timski I tryed to do it last year but the only problem is most clubs pay you in cash so it's kinda risky trying to claim gear and records without that paper trail. I still got away with it because it was rather minimal. It boils down to the fact that the only real tax write off you can get being a DJ is being one of the massive guys that travels the world. Or being your weddings and birthdays *Cough* DJ that enjoys the greatest party hits of the 90's

I don't agree with any of this at all. Most of the time, I get paid in a check, and beyond that, I don't think you need to be a "massive guy" to take advantage of tax laws, I just think you have to want to manage your money wisely. To be honest, I think tax laws like the ones I'm talking about are designed far more for DJ's like me than they are for the "big guys."

Some of those fellows may not really need every break they can get to stay afloat/get new gear/pay the bills - I, however, do.

quote:

Originally posted by Freak . . . if you arent making even a semi reasonable amount on a semi regular basis, just keep it cash in hand.

Thanks for the post m8 - and the reason I'm asking at all is pretty much because I am finding myself making a regular amount of money (when I calculated what I earned DJ'ing the last year it really made me think about how I'd blown so much of that money when it could have gone towards things I deem more important), and I really want to use it well.

Thanks again for all the advice guys

y not open an account to put ur DJ earnings in so u can save to put towards new gear/music/other things that u may need it for that u feel are important, etc

Haircuts, mobile phone bills you name it. You can deduct it. Everything Freak said basically.

The only problem is that if you get paid cash in hand, you are not paying tax on it in the first place so don't include those amounts our you could set yourself up for a tax beating not to mention that the clubs could get into trouble.

Also be careful how you declare because you could also end up putting yourself in a higher tax band and get stung big time on your major income so you really have to weigh up everything.

Get a good accountant, because they will know lots of ways, and as long as you have a papter trail you are not in the wrong as long as it was declared correctly in the first place.

It annoys me a little the way some people almost treat it like something dirty on these forums just because you want to get the most out of your DJing be it cash or whatever.
Being a DJ is a fucking hard proffession with really unsociable hours etc and requires a lot of sacrifice. There is no reason you shouldn't do this to give your self a break and to feel that you are getting something out of it. There comes a time when the ends have to justify the means.

Nothing funny about being broke, make it work for you.

Cheers
Nem

I agree with Nem. I've even lost friends over the fact that I expect to get paid for what I do. Had to tell them to fuck off. Damn wannabe DJ trainspotters who think they know everything about the business after 6 months.

If you are doing DJing as a hobby, or not as a primary income, ask for cash and dont report it on your income tax. If you are making tens of thousands from gigs and its your main income, then you should report it. I really hate these people that claim their gigs as a loss, where they write off more than they make, just to get a check from the IRS. If your business is a loss, then obviously you are wasting time. But like i said, if you are not making decent living income from DJing, dont report it.

You're taught in business school that you should balance your accounts such that you don't show an income. A total loss is preferable.

quote:

Originally posted by antronx If you are doing DJing as a hobby, or not as a primary income, ask for cash and dont report it on your income tax. If you are making tens of thousands from gigs and its your main income, then you should report it. I really hate these people that claim their gigs as a loss, where they write off more than they make, just to get a check from the IRS. If your business is a loss, then obviously you are wasting time. But like i said, if you are not making decent living income from DJing, dont report it.

The government tells me how much I can claim per mile for travel.... its not my fault that their rate is actually 4 times what it really does cost me.

There is making a loss personally, and making a loss on the books- HUGE difference between the two, even without fiddling it.

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