ReneeTAXEA1
Expert Alumni

Self employed

Thank you for contacting TurboTax Live!  We see that you had a question - about some equipment and other materials you purchased for your music project.  We thank you for your question!

 

It appears from your question that you are engaged in the music business, in either creating music and song content, or in producing music and songs.  That is really neat!!

 

You should treat the music business collectively - and not treat each and every song, or production of music content as a separate business activity.

 

Since we do not know - from your question - whether the business expenses that you incurred for the song can be used in future pursuits and other song-writing and producing activities - we are speaking about your music income and expenses collectively.

 

If there is something unique about the song/music - that did not generate any income in the current tax year - that was not contained in your question - we encourage you to write back to us in this post/reply, to clarify your concerns about the non-income producing song/music.

 

All income paid to you during the 2020 tax year - as either reported to you on either a 1099-NEC or a 1099-MISC in box 3 or 7, as well as all income paid to you during the year, whether in cash, check, direct deposit, or otherwise - is considered self-employment income as far as the IRS is concerned.

 

You will report all of that income on a Schedule C - Business Income & Expenses - which will become a part of your personal Form 1040 tax return filings for the tax year.   This is true for your music business and self-employment in the music field as a whole - and use a Schedule C for your music collectively.

 

Because of the nature of equipment and materials that may be used in the music business - both for creating content and producing music in general - some of the equipment (depending its useful life, cost, and whether it was needed for a single project, or can be used for future project) may be subject to depreciation rules - and you may need to discuss those rules with one of our Live! Tax Experts! though setting up a call back or Chat session with TurboTax Live!!!

 

In any event, we sincerely hope that this post/reply is fully responsive to your question, and we thank you again for your question!!  All the best to you in the music you create - and thank you for contacting us at TurboTax Live!! Cheers!!!!

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