Tax Time – Musician's Office in Home

Office in Home
In our homes or apartments, musicians all have a room in which they practice or teach, but for that room to be considered a home office and deducted on our taxes, it must meet certain requirements established by the IRS. For example, that part of your home must be used regularly and exclusively:
• as your principal place of business for any trade or business; and
• as a place to meet or deal with your patients, clients or customers in the normal course of your trade or business; and
• in the case of an employee, the home office must be for the convenience of the employer.

If the room is used for any other purpose like watching television, playing pool or entertaining, it will be disallowed. The space must be used for business purposes only. For the musician who has a space that is regularly and exclusively used for teaching there is little question. It qualifies as a home office. But for a performing musician who uses the
space as a practice room there has been some back and forth—yes, no, yes. At the present time musician’s practice rooms do qualify as home offices. Again on polyphonic.org William T. Hunt writes an informative article detailing the back and forth history that musicians will find very relevant.

A home office can be very benefi cial to the musician. Calculate the square footage of the office then divide it by the total square footage of the home or apartment. That will give you the percentage of the home that is used for business. Let’s say that 10 percent of your home is used as a home office. You can then write off 10 percent of your home expenses to your business. Things like:

• Mortgage interest
• Property taxes
• Casualty or theft losses
• Homeowners insurance
• Rent payments
• Repairs and maintenance
• Utilities

If you make a capital improvement to the offi ce by painting it or putting down a new carpet, those expenses can be fully deducted. Home offices are a good thing. Tax audits are a bad thing! Keep impeccable records and make sure your particular room qualifies as a home office. There are other subtleties beyond what we have discussed here, so consulting a tax professional is advised.