Working as an entertainment industry professional means you’ll need a great team around you. Whether working full-time or as a side hustle, maximizing deductions on business expenses can help you save more.

As a small business owner, you’re eligible for standard deductions related to business expenses. Read on to understand tax deductions for entertainment industry professionals and how to account for your business deductions.

Who Can Claim Entertainment Industry Professional Tax Deductions?

If you work as an entertainment industry professional as a freelancer, independent contractor, self-employed, or business owner, you may also be eligible for business expense deductions. If you work full-time for a company and receive a W-2, you usually won’t be eligible to claim business tax deductions. Entertainment could even be a good side hustle for tax write-offs.

However, most entertainment professionals are self-employed or work as contractors who could benefit from creative tax deductions. In addition, you can take advantage of LLC tax benefits as a small business owner.  

Common Tax Deductions for Entertainment Industry Professionals

Common business tax deductions for entertainment professionals include recording costs, professional photos, and travel expenses. You can also deduct insurance and advertising if you’re self-employed or a freelancer. 

Understanding tax write-offs for the self-employed or small business owners can help save time and protect your hard-earned revenue. Read on for possible business expense deductions as an entertainment professional.  

Studio or Workspace

If you have to rent a studio space for recording, the cost is a deductible business expense. Likewise, if you have a regular studio, workspace, or rental contract for performances, those costs can be valid business expenses. You can also deduct:

  • Rent for a teaching space
  • Recording studio booking fees
  • Utility costs for a workspace
  • Membership fees for professional associations

In addition, the costs of launching a business are deductible business expenses, including

  • LLC formation costs
  • Business licenses
  • Fees for a website, domain, hosting, and other costs

Instruments 

As an entertainment industry professional, you may need one or more instruments. Fortunately,  all expenses related to instruments for your entertainment business are deductible. Major expenses like instruments are considered capital expenses that must be depreciated over a few years, while small expenses can be deducted in a single year. 

Expenses to depreciate or deduct as a one-time expense include: 

  • Instruments
  • Microphones 
  • Headphones
  • Cases
  • Bows
  • Music stands
  • Sheet music 
  • Instrument cleaning supplies, rosin, and other consumable supplies

Performances and Props

Whether you’re a singer, actor, musician, comedian, or other entertainment industry professional, one of the biggest costs may be of performance and recording. All expenses related to your performance and instruments are deductible business expenses. You can also consider influencer tax write-offs.

Expenses to depreciate or deduct as a one-time expense include: 

  • Stage rental fees
  • Microphones 
  • Performance props or equipment
  • Costumes
  • Licensing fees

Professional Photos

As an entertainment industry professional, photos, audio samples, or acting demo tapes may be necessary for your business. You may deduct the costs of getting photos, demos, or other professional files to promote your work. 

Advertising Costs

Advertising costs are deductible if you market your entertainment business or credentials online, through professional journals or other media. To take this deduction, you’ll need to keep accurate records of costs with receipts.

Travel Expenses

As an entertainment professional, you may need to travel for work and take overnight trips. These out-of-pocket travel expenses qualify for tax-free reimbursements. Possible travel deductions include transportation by plane, car rentals, lodging expenses, and meals. 

If driving to new work locations, you may deduct actual costs or take the IRS standard deduction of 65.5 cents per mile for 2023 and 67 cents per mile in 2024. However, you cannot take this deduction for regular travel to your office.

Meals

If you have to stay overnight away from home, meals can sometimes be a deductible business expense. Generally, the IRS allows deductions of 50% of business meals. If you choose to deduct the actual expense, you must keep track of all meal expenses, including tips and tax. Or, you may be able to take a per diem allowance

Website Hosting Fees

The cost of web hosting, website design, and other fees to maintain your professional website is a deductible business expense. 

Legal and Professional Fees

Professional and legal fees you use for normal business operations may be deducted as a business expense. As an entertainment industry professional, these may include:

  • Accounting services
  • Legal services
  • Scheduling software
  • Any other software necessary for your operations

Expenses That Entertainment Industry Professionals Cannot Claim as Tax Deductions

Entertainment industry professionals can deduct normal business expenses. However, there are some expenses you cannot deduct, including: 

  • Reimbursed expenses: For example, if you are reimbursed for travel expenses, they’re not deductible as a business expense. 
  • Life insurance premiums: If you’re the beneficiary, you cannot deduct life insurance costs.
  • Regular commuting mileage: The mileage for commuting to work for an office away from home is not a deductible business expense. 
  • Fees from legal violations: You cannot deduct parking tickets, court fees, or other fees related to any legal violation. 

How to Prepare for Tax Filing and Monitor Tax Deductions for Entertainment Industry Professionals?

To prepare tax filings and track deductions as an entertainment industry professional, consider these tips:

  • Start early: By setting up clear accounting systems or using trusted accounting software like doola Books, you can save time and headaches when preparing deductions.  
  • Track everything: Tracking software or apps can help make tax time easier. You should keep receipts and file them carefully for all other business expenses. 
  • Create digital files: To save time preparing taxes, ask for electronic receipts for all expenses or scan physical receipts and save them into a single folder or cloud-based drive so you don’t have to search later. 
  • Consider getting help: As a busy professional, a certified public accountant or tax professional can help you prepare taxes or double-check accountings. 

How to Claim Write-Offs as an Entertainment Industry Professional on Your Tax Return?

As a business owner or self-employed entertainment professional, you usually report income and expenses on Form 1099 Schedule C and claim all business tax deductions or expenses.  After subtracting business expenses from income, you will input the difference on Schedule 1 of Form 1040. Tax preparation or accounting software can help you fill out these forms automatically after inputting the relevant income and expenses. 

In addition, Section 179 of the IRC allows businesses to take an immediate deduction for business expenses of depreciable assets like computers, equipment, vehicles, and software. You can also learn more about filing self-employment tax.

Growing as an Entertainment Industry Professional

Working as an entertainment industry professional can be a fulfilling path of creative expression and storytelling. However, tax preparation can be time-consuming. That’s why excellent tax preparation software can be so valuable. Consider doola Books to simplify bookkeeping and free up time to focus on your business goals. Or, get doola’s tax package to ensure compliance and online filings for worry-free tax filings! 

FAQs

Are there limits on how much I can deduct for certain expenses as an entertainment industry professional?

No limits exist on how much you can deduct as an entertainment industry professional. However, the expenses must be necessary and ordinary for the business. 

What records should I keep to support my entertainment industry professional tax deductions?

To claim business deductions, you should keep receipts of all expenses. You will also need to track mileage to claim mileage deductions. Tax preparation or accounting software can easily organize all receipts and documentation. 

How do tax deductions affect my overall taxes owed as an entertainment industry professional?

Deductible business expenses can reduce your taxable income and overall tax burden. However, you should speak with a CPA or tax professional to ensure correct accounting and records of allowed necessary and ordinary expenses. 

Alison K Plaut
Alison K Plaut
Content Specialist
Doola's website is for general information purposes only and doesn't provide official law or tax advice. For tax or legal advice we are happy to connect you to a professional in our network! Please see our terms and privacy policy. Thank you and please don't hesitate to reach out with any questions.
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