LLC and Tax Guide
1. File an LLC
Filing an LLC is a straightforward process in 2019, with several businesses that specialize in handling the administrative work of filing the proper documents for a low fee. An LLC is the most ideal business entity to start as a musician due to its taxation status as a pass-through entity, which simply means all profits flow through to your personal tax return requiring only one tax return. Other entities such as S-Corps require complicated business taxes to be filed, and then your salary gets taxed on your personal taxes resulting in double taxation. An LLC eliminates the double-taxation.
To file an LLC, all you need to do is create an account and fill out some information on one of the following sites when prompted, including your name, the goal of the business, your SSN and address. Both RocketLawyer and Legalzoom are reputable companies that can file your LLC quickly and easily. Generally, the LLC can be filed for a few hundred dollars.
2. Open a Business Bank Account
After the LLC is filed, you are legally required to open a business bank account to not muddle together personal and business expenses. Having a separate business bank account and credit lines will allow your business to begin to generate a credit history, which will entitle you to business loans in the future if you require them. Iberia Bank offers a free business checking account and Chase has a popular Business Checking option as well. Any money you earn as a musician should be deposited into the business checking account, and all music-related expenses should be spent on the Business Debit card. This will allow you to easily calculate your net profit or loss and only pay taxes on the total profit, or receive a tax return in the case of a loss.
3. Keeping Accounting
Quickbooks is the most popular software to categorize expenses to make filing taxes a breeze in the future. The online software links to your business bank accounts and once you categorize expenses the first time, it will automatically categorize similar expenses into the proper account in the future. For example, a purchase on your statement at Guitar Center would be manually categorized as business supplies, and afterwards, every purchase at Guitar Center will automatically be categorized in that category. With every expense and gain categorized accurately, it is easy to input the final amounts in the proper lines of your tax return.
4. Deducting and Categorizing Expenses for Taxes
There is a wide variety of deductible expenses you can take advantage of with an LLC.
With the fruition of the internet age, there is a saturation of streaming and other online businesses catering to the music industry. Once restricted to radio and physical CD or record distribution, there are now seemingly hundreds of outlets to market and discover how to sell music. Identifying where your target audience listens to music is important to create profitable distribution outlets with steady sales. For example, rap music fans gravitate towards DatPiff.com and the streaming service Tidal, Indie music lovers tend to search YouTube and Bandcamp, while Electronic music fans go to Soundcloud to seek new music. The following list will give you some ideas to begin identifying where your music will sell best, and how to get there. Clicking the links will bring you the right place to start posting your music on each service.
Vinyl sales saw its strongest sales year in the past two decades in 2015. The revitalization of vinyl is a good sign that music purchased with a tangible object is not going anywhere soon. Moreover, bands with good branding often create a variety of merchandise to sell at music stores, festivals, online, and during their shows. It is also easier than ever to wholesale customized merchandise from online vendors without spending too much. Learning how to leverage the distribution of physical music products is worthwhile for musicians, even in the digital age.
Selling merchandise at every show is a fantastic way to increase your bottom line. Additionally, giving away cheaper freebies such as pens, stickers, and kuzies provides cheap advertising in the long-run. If 10 of your friends put one of your band stickers on their laptop, you’ll be exposed to hundreds or thousands people over the course of the next several years due to the simple presence of the logo. Giving out pens to friends, schools, doctor’s offices, or businesses will also increase your band’s brand awareness, where pens are likely to be used many times by ideally more than one person.
We recommend Quality Logo Products for high-quality and cost-effective custom merchandising services from a reputable company based in the USA.
Here is a list of product ideas to get the gears turning:
Alibaba.com has some of the cheapest manufacturers to custom-brand these items- but always order samples first! Most suppliers allow you to order at least one custom sample where you only pay freight. There are many other more user-friendly custom merchandise companies such as Vistaprint and 4imprint. Visit this page to find more great ways to source.
The best ways to post and sell your music across a variety of digital media platforms.
Aggregators will automatically publish your music to several online distribution channels all at once. These services allow you to customize where your music is published, track earnings, and provide a single area to manage your distribution methods and marketing materials. They are hands-down the fastest and easiest way to get your music in front of a large audience, but don’t forget to do your own marketing- these sites mainly just make your music available on many services, not promote it.
Many venues, weddings, and private events seek to find musicians and bands to book online through booking websites where you can post your band, photos, and contact information allowing them to contact you directly. Here are some good websites to post your band so you can increase your exposure for potential gigs:
Youtube is the most widely popular way people find music worldwide, and many musicians who post high-quality music videos have gained a following this way. Making music videos funny, entertaining, emotionally charged, and/or vibrant is no easy task- which is why freelance video professionals that can be hired on sites such as Fiverr and Upwork should be utilized. While relatively rare, a single Youtube video with 1 million views can generate you a following of at least a few thousand people in any major city in the world, making it worth the time and investment in a high-quality video.
Today, it seems that everyone has switched to subscription music streaming services. These do not generally pay handsomely, but the amount of the market that now obtains music solely through these services is too large to ignore.
Clicking each link will take you directly to the specific streaming service page showing you how to post your music on that outlet.
iTunes kicked off the online digital media revolution with the iTunes store, enabling people to purchase songs individually and cheaply for the first time. Traditionally, an entire CD or record had to be purchased. Digital media stores pay better than streaming services.
Clicking the following links will take you to the direct page to post your music on that outlet.
Exposure services are those that generate little-to-no income but are great for generating buzz about your music.
This article summarizes how Social Media is changing the landscape of the music industry. Building a following on social media can be a lucrative way to engage with your audience. Creating content is now fast and easy with free apps such as Adobe Photoshop Express, and by using several targeted hashtags such as #livemusic and #funkband and posting regularly you can grow an audience organically and eventually generate a crowd in cities around the world. The purpose of hashtags is to ensure your content gets in front of people who care. In short, people follow hashtags they are interested in and when you use them properly, your content will show up in user’s feeds who follow and search for those hashtags. Doing research into hashtags that are followed by large audiences related to the type of music you play can be done on sites like Hashtagify.
More recently, the “influencer” industry has become a multi-billion dollar marketing machine. Influencers have taken the time to develop large followings that are interested in something similar, and there are many platforms and software that allow you to find and pay influencers with audiences that match your demographic to promote you. Here are some examples of Influencer Marketing platforms:
Hip-hop and Rap are the most popular genres in the world in 2019. In 2018, four of the five most streamed songs in the USA were rap. Along with this phenomenal growth, many new artists have flooded the space trying to get their piece of the pie, making it hard to stand out. For this reason, releasing mixtapes for free in the beginning has become a standard practice to get your foot in the door as a hip-hop artist. In fact, some of the biggest names in the industry such as Chance the Rapper released all their music for free for years, and later figured out how to cash out through sponsorship deals and had automatic sales waiting for them when their first paid album dropped. Here are the most popular sites to post mixtapes:
Creating a marketable and consistent image can help any musician gain a loyal following. To develop brand resonance with an audience, every element should relate to one another with similar themes and colors. However, not all elements should be identical- there must be points of difference in order to increase the overall memory nodes in the minds of consumers. Strong branding ensures every time a consumer sees, hears, tastes, or smells certain things they think of you. Here is a checklist of elements that you should think about integrating into your musical life in ways that harmonize with your personal style.
Websites are easier and cheaper to create than ever. People with a basic understanding of HTML and website building should use WordPress as it is the most versatile and advanced of any website builder in the world, while remaining straightforward enough for an average person to learn. This website was created with WordPress! If you prefer a simpler interface, Weebly.com and Squarespace.com offer cheap or free website builders where you can drag and drop every element incredibly easily.
The easiest website building platforms are Squarespace and Weebly. If you are more experienced, WordPress may be a good option as they have the most powerful “plug-ins” and versatility to create more in-depth, professional sites. Navigate to these sites and sign up for an account to explore their features.
You will now follow instructions on WordPress, Weebly, or Squarespace to link your domain with your website. Choose a sleek color scheme and layout that coincide with your band’s logo or other merch, if you have them. To learn more about hosting and managing your own website, visit https://www.cloudwards.net/cheap-web-hosting/.
Each interface is slightly different, but Weebly and Squarespace let you choose free themes where you can add text and drag and drop other elements to the site easily.
Soundcloud allows anyone to embed any song on their website via their “embed” HTML feature. If you post your music on spotify, go to your song and click “share” below the song. On the top of the pop-out window, click “Embed.” There are options to change the style and size of the song that will be embedded into your website. If you copy/paste that HTML code, you can insert your song in a playable format anywhere on your site. Soundcloud gives you the option to allow or disallow the listener to download the track as well if you want to provide a sample of your music but not offer it for free download.
Apple lets you create direct links to your music if it is posted on iTunes, Apple music, or any other Apple-owned music service HERE. Under the search bar, select Media Type. As a default, you will find that it links to Apple Music. If you want to change it to an iTunes link, choose iTunes. Find your song in the search bar and click through to get your link to insert into your site. The top of the page has links to create Banners and Widgets as well, definitely explore those if you feel comfortable.
Paypal allows users to create any payment button they want. See this page for in-depth directions on how to do so. You will go to PayPal’s button creation page in your account and set the price for each purchase, for example, $0.99 for a song. You will need to create a download link for the customer to download the MP3 after they purchase it: see this page to find out how to do so through Google Drive. When creating your button, after choosing your price and other options select “Step 3: Customize Advanced Features (Optional)”. Scroll down and check “Take customers to this URL when they finish checkout.” Insert your download URL here for your song to be automatically downloaded after a customer purchases it.
An eye-catching logo is the first element to consider creating. Stickers and other merchandise can’t be created without a good logo, and if it is objectively attractive people will advertise for you through using the product or placing a sticker on their computer, for example. The website Fiverr.com has thousands of logo designers who will be happy to design one for you for only $5!
Always have someone taking pictures of your band while gigging or elsewhere. If you can’t afford or want a photographer, make a point to ask an audience member before the show as they’ll likely be taking pictures anyways and it will be free. Band pictures are great to post on social media, imgur.com, your website, or for publications.
The way you and your band present themselves will increase your relatability and resonance with the audience. An example of a music branding master is Alice Cooper, who realized that teens want to do exactly the opposite of what their parents tell them. So he became an extreme symbol of drugs, sex, and of course, rock and roll. His shows were mayhem, he would rip up pillows and feathers would fly throughout the venue while a scantily-glad Alice crowdsurfed and chain-smoked cigarettes, accompanied by heavy rock and roll and a theme of embracing vices. Alice Cooper in person is a soft-spoken and kind individual who created a full alter-ego through this powerful brand with the aid of genius manager Shep Gordon. Some musicians may view this as “selling out,” but in reality, he was having a great time while doing what he loves and making big paychecks. What’s wrong with that? To learn more about Alice and Shep’s pioneering strategies, watch “Supermensch” on Netflix.
An often-overlooked facet of branding, product packaging can be a great strength. Creating merchandise with unique labels and attractive packaging will lure in customers to buy. Think about the packaging of M&Ms minis, or a tin of French Market coffee. Those packages contribute to the actual product by keeping them fresh and accessible, and many people save the containers for other uses.
2015 was the hottest year for vinyl sales since the 1980s, largely attributed to Pink Floyd’s “An Endless River” release. As a “millennial” myself, I can testify to the fact that a ton of us own record players and are building their vinyl collections right now. Unique, novelty records will sell great in record stores. Check out this list for unique limited-edition vinyl release ideas. Here is a New Orleans based vinyl pressing manufacturer:
The power of free is ever-present. People take free stuff even if they don’t really want it, simply because it is free. There is an entire chapter about the power of freebies in a wonderful marketing book called Predictably Irrational– buy and read it if you want to learn many marketing secrets. Needless to say, getting super cheap custom-branded merchandise is easy and worthwhile from sites like Vistaprint and Bands on a Budget. Often, freebies can be pens, kuzys, coasters, and stickers.
Creating a blog indirectly related to your band can be a smart way to get an email list of people interested in a related topic or that musical genre. If you were to create a New Orleans Brass Music blog that simply posted articles about the general New Orleans brass scene then people interested in brass bands will use the website as a useful resource. Over time, you collect email addresses through an opt-in form for users to get regular updates about the New Orleans Brass Scene. You can then market to that email list with merchandise or great deals on your shows. Having a platform to reach those interested in your style of music is a hugely valuable asset. You can even sell advertising space to other musicians or related music companies. Blogs can be made on sites such as Blogspot or integrated into any Weebly, WordPress, or Squarespace site.
Merchandise should relate to your general brand. Products like stickers and shirts can apply to any band, but catering more specific merchandise for your audience will pay off. For example, if your audience loves the outdoors you may want to custom-brand some hammocks or drawstring bags, a country band might sell custom cowboy hats, or a psychedelic band may sell incense. Custom-branding is best done through Alibaba.com through a simple search of
Click the link above for an example.
Most items require a minimum order quantity (MOQ) for custom branding. It is best to purchase a sample first to ensure the company is legitimate and quality is decent. Spending about $300 on customized products will pay off, as you can usually sell them for a profit. Be sure to look at the seller’s reputation on Alibaba on the right-hand side and ensure they have large sales volume and are a “Diamond” seller. There are many other sources for custom merchandise, a quick Google search for “custom merchandise” will show you countless options to find a supplier who best suits your needs.
Youtube is a proven route to success with no record label required. Good videos go viral. My music business professor put it well: If you have one video with a million views, you can essentially draw a crowd of at least 100 people in any city in the world. Creating a great video is of course, the hard part. Cell Phones today can record incredibly high-quality videos, so little-to-no financial investment is required. For full professional-level videos, an investment in a DSLR camera or hiring a music video director is a better bet. Additionally, freelance services including Fiverr and Upwork have many filmmakers waiting to be hired. It is important to create a storyboard for your video in order to organize your thoughts or give the director an idea of what you want. Just going out and trying to film without any planning generally ends up wasting the time of all parties involved. Here are several helpful apps that make it easy to create a high-quality music video on your phone.
Navigating music business today can be tricky and makes it hard to find the time to focus on what you do best- writing and playing music! However, delegating one hour a day to marketing, promotion, and brand building is worth the time for your long-term music career. If you have the capital, a good manager can be worth the investment as well.