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So you finally finished the last of your last holiday gigs and the New Year is here, which also means that it's tax season. You may soon be receiving a number of forms you'll be expected to use when filing your taxes before the April 15 deadline. But in case you think that the titles of the forms piling up on your desk sound more like a phone book than a way to get a refund, here are some basic explanations of the most common tax forms for musicians and when you'll need them.
In general, the tax forms commonly encountered by musicians fall into three rough categories:
- Forms you fill out to get paid
- Forms you receive from the people who pay you
- Forms you need to complete and submit to the IRS by tax day
Taxes can get complicated fast, especially for musicians receiving royalties and/or freelancing, so always make sure to consult a tax professional about your specific tax situation.
Forms you fill out to get paid
If you do freelance* work, the person/business paying you may ask you to fill out a W9 or W8-BEN (W8-BEN is typically used by individuals who are not US citizens or US residents). Businesses are required to keep track of and report who they pay for services and how much they pay them. As a freelancer, filling out this form typically means you’ll receive a Form 1099 from the business if they paid you at least $600 over the course of the year. The Form 1099 should be sent to you sometime in the three months prior to the tax filing deadline in April.
W4 – getting paid as an employee
If you're an employee* of a business, you'll fill out a W4 and give it to your employer when you begin to work for them. This form allows you to specify how much the business should withhold from your paycheck for taxes, and helps the business to report how much they paid to you. Filling out this form generates a W2, which you will receive from your employer each year sometime in the three months prior to the tax filing deadline in April.
*Not sure if you're a freelancer (aka an independent contractor) or an employee? Check out the IRS website to understand the differences.
Forms you receive from the people who pay you
1099-MISC – From gigs where you earned $600+ and/or royalties of $10+
As a writer, performing artist, and/or freelancer, you may receive many 1099 forms. The 1099 details how much money you earned for performing services (including parts and labor) or royalties, and from whom you earned the money. These forms are sent to you by the businesses you've worked for, and you'll need the information from these 1099 forms when doing your taxes.*
W2 – From your employer for part-time or full-time work
These forms detail how much money you earned as an employee and how much you've already paid in taxes (as a result of the withholding choices you made on your W4 form submitted to your employer). These forms are sent to you by your employer, and you'll need the information from these forms when doing your taxes.*
*If you haven't received these forms by late February, you should call the businesses you have worked for and let them know that you have not received the forms, since you need the information on these forms to complete your taxes. Keep in mind that if you're purely a freelancer, you likely will not receive these forms.
Forms you need to complete and submit to the IRS by April 15
People filing taxes use one of the forms in the 1040 family, but depending on the types of income you receive and which deductions and tax credits you claim, you may also need to submit some additional forms. Here is some basic information on 1040 forms, and some of the common additional forms used by musicians.
The 1040 family (1040EZ, 1040A & 1040) – the backbone of your taxes
A 1040 form is the primary form people use to declare how much they earned and how much they owe in taxes. There are three versions of the form to choose from, and each of these options requires you to enter all of your income. Your income is anything you earned, including salaries, money from gigs, interest from your bank accounts, profit from investments, royalties, etc.
Which is the 1040 form for you?
- 1040EZ – If you worked only as an employee, didn't freelance, and didn't have any dependents, this form might be for you. The 1040EZ is only for certain types of income such as wages, tips, and interest income, so if you do freelance work (i.e., you receive Form 1099 for gigs or royalties), then you need to use form 1040 instead. Your taxable income must also be less than $100,000 to use the 1040EZ.
- 1040A – This form is very similar to the 1040EZ, except it allows you to claim dependents. If you do freelance work, you’ll need to use Form 1040 instead. See this PDF on the IRS website for a detailed explanation of when you can use 1040A vs 1040.
- 1040 – This form is most commonly used by musicians because it allows you to enter income from your freelancing gigs and royalties. You will also need to use this form if your taxable income is greater than $100,000.
Additional forms you may need to submit with your 1040
If you're self-employed or the member of a partnership (both common occurrences for musicians), then you may need to submit additional forms with your 1040 form to give the IRS more details about your income and business expenses, and to make sure you are paying into the Social Security and Medicare systems.
Schedule C or Schedule C-EZ – For the self-employed
Use this form to declare your income and expenses as a self-employed musician. Make sure to include income listed on the 1099 forms you receive, but even if you don't receive a 1099 for a gig, you're required to declare all income earned that's related to your business, including royalties. To learn which version of the form to choose, read the IRS article, "Should I File Schedule C or Schedule C-EZ?"
Schedule E – For your role in a partnership*
Use this form to list your individual profit or loss from a partnership. Partnerships must have a unique taxpayer identification number called an EIN (similar to a Social Security number), and the partnership must file its own taxes. If you fill out a Schedule E, then your partnership must also have filled out a Form 1065 as well as an individual Schedule K-1 for each partner. Royalties that aren't related to your primary line of work may also be recorded using Schedule E (see this for details).
*If you're a member of a partnership, read this article for the basics on which forms your partnership will need to file in addition to the forms each member will file with his or her personal taxes.
Schedule SE – Likely needed if you filled out Schedule C or Schedule E
This form helps you to pay Social Security and Medicare taxes on any self-employment or partnership income you earned (since you did not have an employer withholding these taxes from your paychecks).
Disclaimer: This article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney or tax professional to obtain advice with respect to any particular issue or problem.
Jamie Davis-Ponce is a professional musician and graduate of Northeastern University's Master of Music Industry Leadership program with a concentration in entrepreneurship. She has been a music lecturer at Ithaca College, and is deeply involved in Boston-area arts and music organizations, having worked with ArtsBoston and held internships at Handel & Haydn Society and Boston Symphony Orchestra. Jamie is currently an administrator in the Professional Performance Division at Berklee College of Music. You can view more of her writing on her blog on Music, Business, and Creativity.