commuting

[Gary]

Please help with a question I should know the answer to.

I play in a band and we have about 10 - 15 gigs a year for which we get paid. On my schedule C, can I deduct all driving expenses from my house to the location and back. Although I do have an office in my home, I cannot claim it since I do not use it exclusively for the business.

Gary Marmer

[ChEAr$]

Only if you play an instrument which is too big!

Of course when the band played for the Kaiser, when through, Kaiser Wilhelm said:
"Very nice boys. Now you can fill up your instruments with beer".!
The Tuba player filled up his horn; the trombone player got his fill, but
there is stood with my ****ed piccolo!"

Another time, we played for the Austrian emperor, and when we were through,
the Austrian emperor said "You boys STINK! take your instrument and
stick them ... up... (wellyou know.)

Well, the tuba player couldnt do it, cause his horn was too big;
the trombone player or trumpet player couldn't either; impossible!
But there I stood with my ****ed piccolo!

[MAMalody]

Please help with a question I should know the answer to.

I play in a band and we have about 10 - 15 gigs a year for which we get paid. On my schedule C, can I deduct all driving expenses from my house to the location and back. Although I do have an office in my home, I cannot claim it since I do not use it exclusively for the business.

Gary Marmer

Any costs such as parking costs would be deductible. Assuming locations are within about 35-50 miles of your residence, you probably wouldn not be able to deduct the transportation costs. If you drove from a work location to a gig, that could be deductible. The basic rules are explained fairly well in Publication 463.

[Brad Imsdahl]

There is some controversy over commuting when you have an office in home for the music business, but it does not qualify for a deduction due to the exclusive use rules. Some say as long as it is a home office used as the principal place of business for your music business, then the mileage between it and any gigs would be deductible. Others take the strict approach that the home office has to qualify for a deduction before you can claim job to job miles.

The other possibility is that if your main job is at another location that you commute to, and the music jobs are temporary jobs in the same business, then any commuting between your home and these temporary locations would also be deductible. This rule would not work if your main job has nothing to do with your music gigs.

I tell my music clients to make sure you set up a separate space in your home for administrative purposes and/or practice area exclusively used for your business, so that there is no doubt the mileage is deductible. Of course any out of town jobs would be deductible regardless of whether or not you have a home office.

[OldJack]

15 gigs at average of 40 miles round trip in town = 600 miles for year * 44.5 cents per mile = $267 business car expense * 30% (15% tax rate+15%SE) = $80 tax savings.

I doubt the IRS is going to audit or argue over $80 tax... take the deduction on your 1040 Sch-C each year and give the auditor the $80 if and when he ever calls for it.

[solomon]

99-7

Revenue Ruling 99-7 (3) in the "HOLDING" section permits the deduction when the home is a principal place of business without exclusivity. In your case, this would be administrative functions.

[jainen]

This might be true

>>In your case, this would be administrative functions<<

This might be true, but you can't assume it from the information in original post. We don't know what the home office is used for. The band, for example, might have a manager who handles some adminstrative functions for this taxpayer at another permanent location.

Besides, unless it is very strange band they are operating a partnership and the deductibility of expenses would depend on their agreement.

[solomon]

Right

You are correct Jainen. He would have to reference 280A(c)(1) - I think - going on memory.

[wv112]

My grandson is the drummer in a rock band. If and when he starts making money on gigs, I will hope to be able to deduct his miles. My reasoning for this is he HAS to haul his equipment to and from the gigs. Tons of equipment. The home office would be for storing his drums between gigs. No home deduction, because of other uses of the room the drums are stored in.

[jainen]

That also might be true

>>he HAS to haul his equipment<<

That also might be true, but Congress hasn't provided for it. Since he is not moving between business locations, it is a personal expense just like any other commuter. The most he would be able to deduct would be the EXTRA cost of handling the equipment in case he has a special trailer or something.

[Gretel]

My grandson is the drummer in a rock band. If and when he starts making money on gigs, I will hope to be able to deduct his miles. My reasoning for this is he HAS to haul his equipment to and from the gigs. Tons of equipment. The home office would be for storing his drums between gigs. No home deduction, because of other uses of the room the drums are stored in.

His home office might not qualify him for mileage but if used for storage the exclusive use test doesn't apply and he still could get the deduction.

[jainen]

Look that one up

>>if used for storage the exclusive use test doesn't apply<<

Look that one up and see if you can confirm it. I think it only applies to inventory in a retail or wholesale business.

[ChEAr$]

transportation of tools

Let's see now. We're talking about a musician who has to use a vehicle for hauling his
instruments (NOT a piccolo!) more like heavy drums, maybe a double bass. Maybe
acoustic gear including amplier and big , really big, speakers.

Now if a construction worker with heavy tools can deduct his mileage from his garage (main storage place for his heavy tools like maybe a generator, air pressure stuff), then a
musician can also deduct his transportation costs.

And yes, there was a revenue ruling on this long time ago.

[wv112]

He is 16 years old. He saved his money for a long time and bought $3,500 in drums and equipment. He lives in a college town and the band is getting to open for bigger bands right now with no pay. Because of their age, they have to be out the bars by 10 p.m. No income, no tax return. But it seems that they are really good, and 2007 they will probably have some good paying gigs.

I don't care about too many deductions, cause I'll put the total amount of his net earnings in a Roth IRA for him.

But we need to do it right from the beginning. They have copywrited the songs they have written, and made videos and have CD's ready to sale. I will set up a partnership for the band. Is this right?

[OldJack]

>>He is 16 years old. He saved his money for a long time and bought $3,500 in drums and equipment. He lives in a college town and the band is getting to open for bigger bands right now with no pay. Because of their age, they have to be out the bars by 10 p.m. No income, no tax return. But it seems that they are really good, and 2007 they will probably have some good paying gigs.<<

I believe the IRS on audit of 2006 would probably say the young man had a "hobby" as the claimed expenses were not when engaged in a business with the expectation of a profit and did in fact NOT make a profit. Just a point as you say no expenses or mileage will be claimed for 2006. If you want mileage and expenses in 2007 the young man has to establish that he has a principle place of business in the home and regularly conducts business from there (practice, planning, telephone calls, etc).