Deducting musical instrument on tax forms

[davewerden]

On a tangent....does anyone here deduct their mileage for concerts with non-profit bands, which covers about 99% of all bands in existence?

I don't see how. One can deduct driving (at a reduced rate) for charity, but I'm not sure how playing in a band is deductible. Anyone else?

[John Morgan]

I know people who do deduct their mileage. A couple friends of mine come to mind, and they live a significant distance from the band they play in. If they are paid (which you can be in a non-profit band) and they treat this as business income, then there are things that you can deduct, mileage being one of them.

Look at this article: https://financeformusicians.com/the-...ileage-part-1/

Just one take on this, there are many more.

[Sara Hood]

In years when I itemize my deductions, I take the mileage to practice as driving for charity. But then, the band is run through the church. I am one of the assistant leaders for the kids' band group. So it works on multiple levels, and I keep the number of miles low and reasonable.
- Sara

[ghmerrill]

The last time I looked into this in detail, this kind of stuff just couldn't legally be done. It's similar to deducting for services to the organization that you might contribute as -- for example -- a software/IT professional. I looked into it when I put a huge amount of effort into building (from scratch) a band's web site and email infrastructure. You just can't do this, and IRS actually has some specific examples of what you can't do of precisely this sort. It doesn't matter if the organization is a 501c3 or not. And a 501c3 is not, ipso facto, a charity.

More to the point these types of "contributions" you're talking about are NOT regarded by the IRS as qualifying charitable contributions. Various MATERIAL contributions to 501c3s and charities are deductible. But costs of your participation are not, and trying to treat a SERVICE (administrative, technical, etc.) as a contribution is not. This is very clear and explicit if you look at the details that the IRS provides. I think it's too bad, but I also understand the principles and motivation behind it on the part of the government.

Just think about it for a moment: You're wanting to deduct some of your expenses for participating in a HOBBY! You can try to look at that in a variety of "creative" ways, but the IRS won't. Note that the (very good) link that John provides pertains to BUSINESS travel -- and not to travel for a hobby or for charitable "contributions". The IRS makes these distinctions very carefully. Basically, if you're a professional and a cost is part of the cost of your doing business, then you can deduct it. Otherwise not. And even this is looked at with some fine scrutiny -- in order, for example, to prohibit people from deducting things like their commuting and parking expenses, lunch costs, etc.

Do some people deduct these things? Yes. Do they get away with it? Yes. Will they continue to get away with it? Probably. Is it cheating on your taxes? From EVERYTHING I've seen in the IRS regulations and examples, it is. Will they ever bother you for doing it? Probably not, unless you get audited and they decide to take the trouble over amounts that they'll likely regard as negligible. If this is a question about LEGALITY, I think the answer is clear (though a lot of people don't want to hear it). If it's a question about practicality and saving a few bucks where you're pretty sure you can get away with it, then "a lot of people do it" is probably the correct answer.

[bbocaner]

I used to do some contract work at a very large quasi-governmental institution. I am not a programmer, but have done a variety of related jobs in the realm of network engineering and cybersecurity. For this particular customer, their employees had a very rigid set of guidelines for what they were paid. Type of degree, what your degree is in, number of years of experience, reviews, etc. all played a factor. If you were a computer network architect (which is the role I had, although as a contractor rather than an employee this didn't apply to me) and had a bachelor's degree, the top level of pay could be obtained if your degree was in electrical engineering or music performance. The next level down applied to employees with computer science degrees! Crazy, right? But I guess they had some actuary who figured out that all the best network architects had music performance and electrical engineering degrees.

I write off some of my musical instrument purchases and expenses but not all. I'm really careful not to run losses in consecutive years so as to avoid the hobby loss rules that snorlax mentioned. In a typical year, my music gig income is usually somewhere in the $10k to $15k range. But I have been known to spend many times that in new instrument purchases per year. One year I went a little bit crazy and bought almost $40k worth of instruments! So I usually write off the easy stuff - instrument insurance, lessons, etc. and then begin the depreciation of one or two instruments per year, but not necessarily all of them that I buy. Rarely it gets to the point where I actually start to tally up mileage to gigs and rehearsals, because I've usually exceeded the income by that point. The idea is to nullify the music income so I'm not paying taxes on that, but not show a loss that would affect my tax situation otherwise.

[dsurkin]

On a tangent....does anyone here deduct their mileage for concerts with non-profit bands, which covers about 99% of all bands in existence?

The band has to be a recognized §501(c)(3) organization that has concerts as part of its charitable or educational purposes. Then it's okay. Taxpayer must keep accurate and complete records - date, name of the charity, miles driven. Rev. Proc. 2010-51.

Ethical requirements mandate this statement: The above is a general answer to a general question. Consult your own tax advisor to see how it applies to you.

[ghmerrill]

The band has to be a recognized §501(c)(3) organization that has concerts as part of its charitable or educational purposes. Then it's okay. Taxpayer must keep accurate and complete records - date, name of the charity, miles driven. Rev. Proc. 2010-51.

I've read through this Rev. Proc. and don't see where this in any way permits the deduction of travel expenses to/from community band rehearsals and other events. It seems to discuss deductions taken only by "employees" or those "carrying on any trade or business" or "charitable volunteers". Members of community (and like) bands are not employees, and they don't carry on a trade or business in participating in rehearsals or concerts. It seems a stretch to characterize them as "charitable volunteers", and I believe that every community band charter and set of bylaws I've seen (including a set I wrote a few years ago) mentions as part of the organization's mission the benefits to its members (which would exclude claiming deductions under another criterion the IRS employs pertaining to personal pleasure or benefit).

I'm just not buying Rev. Proc 2010-51 as justifying writing off personal expenses of band members in getting to and from rehearsals and events. And none of the examples I've ever seen in IRS publications seems relevantly similar to such an organization. I'd like to think that the "charitable volunteer" references might allow band members to slip by on things like this, but I'm highly skeptical -- mostly because I think the charity aspect of such organizations is just so much hokum. How many of us think that in going to those rehearsals and performances we're doing "charitable" work? Really?

Of course, the easy solution here would be to just call the IRS and ask them if you can deduct such expenses if you're a member (not an employee) of a community band that's a 501(c)(3) organization.

[jkircoff]

The band has to be a recognized §501(c)(3) organization that has concerts as part of its charitable or educational purposes. Then it's okay. Taxpayer must keep accurate and complete records - date, name of the charity, miles driven. Rev. Proc. 2010-51.

Ethical requirements mandate this statement: The above is a general answer to a general question. Consult your own tax advisor to see how it applies to you.

Thank you sir. I have no plans to attempt to deduct mileage from driving to rehearsals -- I was merely curious. I do my own taxes, and the risk of my messing this up likely outweighs the few extra dollars I'd get back from the feds.

[Sara Hood]

I did a little more reading on the bulletin that the IRS publishes about mileage claiming, and charitable deductions. Looks like the wording has tightened up quite a bit. It no longer sounds quite so permissive. So I think that I will avoid claiming this in particular when the 2019 tax filing time comes around.

Congress does change the tax policies and terms for various programs and deductions from time to time. The IRS just collects and enforces based on that.
- Sara

[dsurkin]

I[snip] I'd like to think that the "charitable volunteer" references might allow band members to slip by on things like this, but I'm highly skeptical -- mostly because I think the charity aspect of such organizations is just so much hokum. How many of us think that in going to those rehearsals and performances we're doing "charitable" work? Really?

Of course, the easy solution here would be to just call the IRS and ask them if you can deduct such expenses if you're a member (not an employee) of a community band that's a 501(c)(3) organization.

It seems that Gary, Sara, and I might be in the same profession. We're starting to get a little technical, so unless the rest of the forum is still interested, would the moderators prefer that we continue this in PMs?

But I can't resist two more comments: first, I wouldn't rely on the answer given over the phone by an overworked, underpaid IRS employee suffering under poor morale who feels hated by the general public. Second, I wholeheartedly maintain that bringing music to the public is charitable work or education, and that live music makes the world a better place.