I don’t know about you guys, but one of my big motivations for becoming a DJ was a desire to avoid getting a “real” job. But what nobody told me was once a year, I would have to do a tax return – a generally confusing, joyless task!
Thankfully, there are big-hearted people out there willing to explain the intricacies and trap-doors of the tax system to simpletons like me! This guide is specifically for DJs in the USA – apologies to the rest of you!
Jamie Barnes, aka Jamie Selects, has written a brilliant, thorough guide here
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His guide is split into 3 parts – 1.) tax basics and deductions, 2.) tips for filing your 2019 taxes and 3.) strategies for making your 2020 filing the best yet.
As he points out – if you are out there DJing for money, then you are a business. And that is something to celebrate and embrace!
Go and check the post out, where he lays out what your money flow should look like, what are acceptable things to claim as expenses, smart ways to set up spreadsheets, how to go over your calendar in order to work out claimable travel expenses, and much more. Its a really great, thorough article! Here’s the link again, for anyone who missed it higher up the post!
Jamie has also put together this excellent video to explain some of the ideas
1. Can you tell the readers a bit about your background, and how you came to have such a good understanding of the tax system?
My name is Jamie Selects, a DJ and entrepreneur from the Bay Area. I went to University of the Pacific in Stockton, CA where I studied business with concentrations in Arts & Entertainment and Entrepreneurship. During my time there I met my current business partners of Plural Music, a multifaceted music company encompassing a DJing/events, a record label, talent management, and sound/lighting production. We’re always pushing each other to become better in every way and my teammate hit me with some joking criticism “all those books and not a single one on taxes?” (I read a lot of personal development books). This encouraged me to buy Tax Savvy for Small Businesses so I could learn about tax structure for our business. While reading it I realized there were so many things I could be doing better on my own tax return, and since I had recently started my personal development blog, I thought making a tax post for DJs and other people who owned their own businesses would be super helpful. And now here we are!
2. Why is it important for DJs and side-hustlers to understand tax?
Taxes are a fact of life. But, by being a DJ and/or owning your business you’re giving yourself a huge opportunity to lower your tax bill. It’s important for you to understand how taxes work so that you can legally pay nothing more than you actually owe by correctly deducting your expenses. If you don’t report the money you spend on growing your DJ business the IRS has no way of knowing so they’ll tax you on your gross income which is incorrect. It’s important to understand there is nothing sketchy about accurately deducting your costs to lower your taxable income. What IS sketchy, is reporting your expenses incorrectly (consciously or not) to make your taxable income lower than it should be.
3. Do you have any apps that you could recommend people for staying on top of things day-to-day?
In the past I’ve used an app called Stride which helps record expenses and mileage throughout the year. But now since I’ve started using my DJ Finances Log spreadsheet I just record everything in there. It doesn’t matter what you use to record your expenses, all that matters is that you’re doing it!
4. Are there any simple regular habits/life-hacks that people can adopt to make the end of year tax compiling less painful?
Getting in the habit of recording costs as soon as you incur them will save you valuable time and money come tax time. I recommend setting a weekly reminder in your calendar to record your gigs, costs, and any miles driven. It seems tedious, but I promise you won’t regret it!