Tip Tree

Musicians have a unique opportunity to earn money doing what they love, but despite the
creative freedom to make a living sharing their art, there can be a level of stress that
arises when it comes to doing taxes and factoring in the financial side of performing.
Taxes can be simpler than they appear with a little bit of preparation, so if you are a
musician looking to get ahead, here are 6 incredible resources that teach you everything
you need to know about taxes:

How To Do Taxes as a Self-Employed Musician

Before doing taxes as a self-employed musician, you must decide if you will classify as a hobbyist, with no ability to claim losses, or a professional, who intends to become profitable. Additionally, musicians should understand the four types of taxes they will pay:

 

1. Federal income tax
2. Self-employment tax
3. Capital gains tax
4. State and local tax

 

From there, musicians should choose a bookkeeping method to track deductions and ultimately file their taxes.

Quick Guide to Taxes as an Independent Musician

There are a few simple strategies independent musicians can employ to make filing taxes is easier. Taking note of your monthly expenses and keeping track of everything throughout the year, such as keeping all bills, receipts, and forms in an organized location, will help ensure your taxes are accurate with a minimal headache when it comes time to file.

Musicians and Singers

Business taxes for musicians and singers can be confusing, but these are the factors performers should consider during tax season:

 

• Income for the musician.
• Travel and meals.
• Vehicle expenses.
•  
• Home office or studio.
• Other unique deductions.

 

Each tax scenario is different, but through consistent bookkeeping, musicians can be prepared for a seamless experience when tax season rolls around.

The Musician’s Guide to Taxes: Top Tax Deductions

When running a business, you can claim certain business expenses as deductions to reduce your tax liability, so musicians must do diligent bookkeeping throughout the year. Some of the expenses that musicians can write off include booking fees for studios, utility costs for your workspace, registering for a business license and insurance, website fees, and more.  

 

PayPal and Venmo Taxes: What You Need to Know About P2P Platforms

Peer-to-peer payment apps like Venmo and PayPal provide a unique level of convenience that connects musicians with potential tippers. These applications have personal and business payment platforms, but users must still consider them.

 

If you earn over $20,000 in gross payment and receive over 200 separate payments in a year using P2P platforms, you must complete a 1099-K form for your taxes. It may be beneficial to create a business bank account and track your expenses to make this process easier come tax time.

Musicians Tax Guide: 11 Common Mistakes Musicians Make on their Taxes

There are many mistakes that musicians can make on their taxes, but here are the 11 most common:

 

1. Not filing taxes at all.
2. Not claiming income and expenses.
3. Bad business partnerships.
4. Forgetting cash, Venmo, and PayPal
5. Always taking a loss.
6. Not considering the travel mileage.
7. Not capitalizing assets.
8. Underpaying estimates.
9. Inconsistent bookkeeping.
10. Not issuing 1099s to contractors.
11. Being afraid of the IRS.

 

Most issues arise from lack of awareness, but through self-education, musicians can successfully navigate the business side of the art world.

 

 

The business element of the music industry can work to your advantage if you are organized throughout the year with your bookkeeping, allowing you to keep making money doing what you love. Check out these six articles for more in-depth information

Join TipTree Today

Want to Earn tips without begging and stand out of the crowd while doing it… every day?
Musician shows you off the wall method to get it done… this week.

JOIN TODAY

TipTree allows artists and fans to connect directly from their mobile device. With the platform, you’ll be able to create your own custom landing page and include forms for songs requests. Every time a fan requests a song at one of your performances, they’ll be signed up to your email list where you can nurture this relationship and remind them of future shows or music releases. Fans are also able to send tips via Cash App, Venmo, or PayPal directly to artists during performances. TipTree grants musicians with an additional revenue stream and offers them the ability to build an active fanbase that they can communicate with directly. 

Maximizing Tips on TipTree.io

Artists have seen a 200% increase in their annual revenue by incorporating TipTree into their live performances. However, it’s not as simple as setting up a profile and raking in profits at shows. Optimization is necessary to ensure you’re as successful as possible on the platform. Here are some of the ways independent musicians are maximizing their tips using TipTree.

Create an Ambiance at your Performance Venue

Before your performance, it’s important to arrive at the venue early for set up. Not only should you be doing sound check, setting up instruments, and getting a feel for the place – it’s time to start marketing! When you sign up for TipTree, you’ll be given a custom QR code that is attached to your profile. This can be scanned by fans and it’ll take them directly to your TipTree, where they can send you a tip or request a song.

 

Contrary to popular belief, venue owners are more than happy to let you use their space as you wish. This means placing posters on the walls, table tents on each table, establishing a merch area, and more. When creating these materials, it’s important that they are completely consistent and include a sensible call to action. You should be utilizing the same imagery and color scheme across all marketing collateral, as it builds brand awareness and will keep you at the top of fans’ minds. Additionally, they should all have the same, singular call to action directing them to your TipTree profile. Artists have found the most success funneling fans to their TipTree by asking them to scan their QR code to request a song.

 

Ensure That Your Tiptree.io Profile Is Setup Properly

You should never go into a live gig without first testing to make sure your TipTree is working properly for fans to use. If you have a setlist, be sure to upload it directly into to the app to allow fans to request a song or simply know what song is up next. Scan your QR code and check your tip buttons to ensure they are leading to the correct profile. The branding, colors, and imagery of your TipTree page should also be consistent with the table tents and posters you place throughout the venue.

Don’t be afraid to leave your profile relatively plain – using white and other light colors has been proven to promote the best user experience for fans. This results in more tips, as well as emails and engagement from fans. Remember, TipTree is at the top of your marketing funnel as an artist and will be one of the first things new fans associate you with. It’s important that your profile is optimized, easy to read, and straightforward for the user.

Integrate TipTree into Your Performances

You won’t get anything out of your TipTree profile if you don’t mention it during your performance! Concert attendees love engaging with amazing independent artists whenever they can, however, they need to know how to do so. Mentioning TipTree between songs is a great way to introduce fans to your profile and curious to learn more about you. You can also call out anytime someone sends in a tip or song request to show your appreciation and incentivize others to donate as well.

“What would you say to a Musician who is “stuck” in the process, or who hasn’t even gotten started yet Earning more tips and building an engaged email list?”

~

“You are sleeping on an opportunity to engage with your audience and gain extra income. “

Current Tiptree artist

TipTree was developed by artist, for artists, with their primary pain points in mind. Instead of spending hours setting up your marketing funnel or creating sources of revenue to support you as a musician, you can spend time doing what you do best – creating. Start your free trial of TipTree today!

Explore TipTree Features