Hi and welcome to the "Taxes and songwriting" page.
Tax is something we all have to deal with, sooner or later, and nobody's very found of paying taxes, that's for sure.
Many songwriters and artists think of it as a wast of their hard earned income: 'The dosh'. Anyway, you can do what you want, but you can't escape the tax-man and his tax-letters that keep-on arriving into your mail-box.
Ignoring taxes can have serious consequences. Before you know , the sheriff's officer is standing in front of your door with an paper to assess all your furniture and other stuff that you bought with your hard earned money.
When does it all start ?
First of all, taxes and songwriting is depending of the country you resident.
It can take some time before you have to pay music taxes. As long as you have no song writing money income, you don't have to pay anything. Quit normal, I should say.
But, if you are doing some gigs, and sell some of your Cd's, then the ball start to run.
First advice. Keep carefully records of receipts of any paid out in connection with your songwriting. Maybe , the tax-man will not accept all of your expenses.
The costs of your new guitar, piano, keyboard or your computer, studio equipment....
Even the building costs of your home recording studio or your website... printing and burning promotion letters, Cd's, stamps and envelopes.
But if they accepts 80 % of what you turn-in, than be a happy.
This is only an example of all expenses related to your songwriting and the business you are building.
Others may also include, like your car, the rent of your house / apartment, restaurant bills. Just anything you might think on.
For you it's important to keep all the receipts thorough the time ( Years). It is possible that you doesn't have to pay any music taxes ( after signing a deal) the first year because of all the expenses you had the past years.
Anyway, if you wish to avoid "songwriting and taxes", than you have to reside abroad
Tax havens are: the cayman Islands, the Bahamas or Ivory coast, Monaco or San Marino, Andorra...or an other beautiful paradise.. But..one problem thought You have to be a millionaire to move over to these city states. After a few years of fame and fortune, you can try again..
If you like apes a lot, than Gibraltar is your spot to be . Although very rocky, I presume. In Europe,one of the best country's of all to live and work as a songwriter, is Ireland.
Taxes and Songwriting,in the Irish republic, are good friends.
Great news..Lets all move to Ireland!
If you ask me, I wished that this was all over Europe the normal procedure ( althouh,it'll stay a wish because of the crisis)
Unfortunately, it's not. Some of the Island jersey , 20 %, and Isle of Man 21% rate.
That's not bad. The down side: Only for Jersey, you also have to be a already millionaire to get in. Sorry guy's.
Perhaps Andorra is also a very good place for you. Cut of from the world. Yep, some times you have to make some sacrifices! Isn't it so? For the US citizens , it doesn't matter if they move to abroad or not, when maintaining your American passport. So, if an American reside in one of these , he still be liable for American taxes in law.
Theoretically Yes. Practically, ....I don't know if I should telling you all this.
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