come source, such as royalities, merchandise, individual clients, equipment purchases,
vehicle-related expenses, repairs, etc., while filing the originals in Annual Income and
Annual Expenses folders. These can be further divided into various income and expense
categories or sub-folders or dividers. Accordion-type folders are good for this and are
readily found at any office supply store. The idea here is to have everything in one acces-
sible place. One set of folders for income and expenses by source, while the other is a
general set of files for income and expenses that will go to your accountant. If they find
they need more specific information, it’s easy to pull a particular income or expense
folder and grab the information.
It’s obvious that you’ll want to keep receipts for all major business and project ex-
penses. Paying out $1,500 for a piece of sound equipment or two grand for vehicle re-
pairs are expenses you’re sure to want to keep track of. Likewise, spending several thou-
sand dollars for a faster computer is an investment that should be documented and stored.
But it’s the smaller items that can be lost in the shuffle. They add up and over the course
of a year can prove to be a significant deduction. Office supplies are notorious for this.
Or, consider the musician who takes a quick trip out to the music store to pick up a cou-
ple of sets of strings, some nifty picks and maybe an amp cord or three (not everybody’s
wireless, you know). They arrive back at their home to a ringing phone. The sales receipt
gets lost in the shuffle and is never entered in their expenses. Several small incidents like
this over the course of a year can mean money is leaking out of their band business.
Travel and Transportation
Travel and transportation can be significant for touring artists, but they are different
things when it comes to accounting and taxes. Travel is going somewhere other than your