DBA necessary in order to deduct equipment purchases?

A DBA is for a different purpose and, as far as I'm aware, is not required when filing a Schedule C.

You don't need a DBA to file a Schedule C; it's perfectly OK to do business under your own name. Assuming the instruments were purchased to support your music performances, it seems reasonable to deduct them.

If your total income from your music business is under $5K, you should be able to use the much simpler Schedule C-EZ.

R's, John

On 3/16/10 10:35 AM, John Levine wrote: [snip]

Income is not relevant for using C-EZ. Expenses of $5000 or less is the requirement as well as other requirements (e.g., no employees, no inventory, no net loss). For all the requirements, see the front of the C-EZ in Part I.

OK. I'm asking because when I entered the 1099s in Turbotax, it labeled me a sole proprietor, which led to the expense thing. Not sure if it'll matter yet, but I bought about $1500 worth of musical equipment last year.

I'll look into that simpler schedule. I haven't checked yet to see which form Turbotax used automatically.

For this purpose you are a sole proprietor. But as someone else noted, it's perfectly proper for you to do business under your own name. On the tax form where it asks for the business name, just put "Joe Bedroom, Musician." No DBA is normally needed for that in any case.

It seems to me like the cash accounting method makes more sense than the accrual method, since I'm always paid on the spot, and I carry no inventory. Does this sound accurate?

I don't prepare returns, so others will know this better than I do. But my understanding is that for individuals who are bringing in less than $5 million, you are considered on a cash basis by default.

I should be so lucky. Bruce Springsteen still hasn't called me to join his band. :-(

Musical instruments should be depreciated. If you have depreciation you can't use C-EZ. I would imagine the class life of musical instruments are 5 or 7 years. Piano, drums are like furniture so I'd say 7 years; electronic pianos are like computers so 5 years. But then again, ...

Actually, mixer, power amp, stand & cables. But, might fall into the same category.

Maybe all 5 year. Even though I said earlier you have to depreciate, you can use Section 179 to write it off all at once. This makes it look like an expense, but you'll have to recapture depreciation if you sell it -- and if you sell it before 5 years are up it's a little more complicated.

Pass the aspirin. And thanks to everyone for the assistance.

You don't have to look into it. Just enter your information in the TurboTax interview. If you meet the requirements to use Schedule C-EZ, TurboTax will use it. Otherwise it will use Schedule C. There is no advantage or disadvantage to you either way.

Bob Sandler