Forming an LLC and tax deductions question

[elser]

I've been filing as a self employed musician for 28 years. The first year I filed I went to a music accountant in L.A.. I made under $5000 dollars that year but I was still able to write off all of my music related expenses. And there are many, CD's, Apple Music, cable tv, phone etc... But I think as has been said before if your income doesn't go over $5000 after a few years it will be considered a hobby. I think there are also deductions available for hobbies as well. Since that first year I have been doing my own taxes with Turbotax and I haven't had any problems. Knock on wood. It's just filling out the schedule C. Hopefully you'll qualify for the home office deduction as well, that's a big one. It takes some effort and study but it pays off.

[Paulie]

In the past the home office deduction was basically a big neon sign that said "AUDIT THIS GUY!". Rules were quite specific, the office and equipment had to be 100% dedicated to the business or else it could not be deducted. I'll need to revisit the laws these days since it's been a couple of decades since i last tried this route. Thanks everyone!

[mojobone]

I won't swear to it, but there's been a bit of a sea change, as regards the home office deduction; as internet businesses have grown, it's become more of a thing and less of a red flag, IMO.

[elser]

I've been taking the home office deduction for 12 years and haven't had any problems. I use my studio about 95% for music related stuff. But of course sometimes I read the news in here, pay some bills, or pet my dogs, but how are they going to prove it's not used 100% for music? The deduction is big enough that it's worth the slight chance of a penalty.