Bookkeeping and Accounting for Songwriters

As a songwriter, tracking and managing your royalties and copyrights can be challenging, but they're crucial components of your financial well-being. Here's how you can do it effectively:

1. Stay Organized: Keep accurate records of all your songs, licensing deals, and royalty agreements. This information will be crucial for tracking earnings and ensuring you've been paid properly.
2. Use Professional Accounting Services: Services like Bench Accounting can help manage your financial affairs, taking care of all your bookkeeping needs and ensuring your finances are correctly managed.
3. Understand Copyright Laws: Understanding your rights as a songwriter is critical. Register your work with copyright offices and Performing Rights Organizations. This not only protects your work but also ensures that you receive all royalties you're entitled to.
4. Utilize Royalty Collection Services: Companies like ASCAP, BMI, and SESAC can collect royalty payments on your behalf from various sources, making it easier for you to manage and track your earnings.

Don’t worry if you find any of this overwhelming, as a songwriter, your priority is your art. Let Bench Accounting handle your financial management, and ensure you receive every dollar you've earned.

Income derived from songwriting including royalties, advances, and performance rights are considered self-employment income. This means that in addition to regular income tax, you'll also have to pay self-employment tax, which includes contributions to Medicare and Social Security. Furthermore, it's crucial to note that tax deducted at source might not be applied to these earnings, leaving the entire tax burden to be addressed during your tax filing.

Generally, advances and royalties are taxable when received, irrespective of the method accounting you use. Performance rights income becomes taxable when payments are made or when the rights to payment are sold.

You're also entitled to deducting business expenses directly related to earning your songwriting income. This might include equipment or studio rental costs, marketing, and promotion, etc.

Tax law and its application can be complex and multifaceted, hence, appropriate bookkeeping practices are essential to ensure accurate reporting and optimal deductions. Consider working with a knowledgeable bookkeeper who is familiar with the specifics of the music industry, to help you navigate through taxation efficiently and legally.

Songwriters are eligible to claim numerous types of specific expenses for tax deductions. This can include professional fees and dues, home studio costs, instrument repairs, travel expenses associated with performances or meetings, promotional costs, and more.

When it comes to recording these expenses, keeping detailed and consistent records is key. Preserve receipts, invoices, bank statements, and other documents that detail your expenses. Create an organized system for tracking these costs, whether it's in a spreadsheet or accounting software. Be sure to outline what the expense was for, the date, and the amount. Also, keep a separate bank account or credit card for your business-related expenses to easily separate them from personal costs.

At Bench, we can help manage all areas of your bookkeeping, including tracking your expenses and helping you get the most out of your tax returns. We're knowledgeable about specific deductible expenses for songwriters and can ensure they're accurately recorded to minimize your taxable income.

Nope! All bookkeeping is completed in-house.

Your bookkeeper will be your main point of contact, but at times you might hear from another member of your team. This is usually when your bookkeeper goes on vacation, is sick, or otherwise unavailable.

We handle the bookkeeping for you but sometimes we’ll need your input, especially at year-end. On average, expect to spend 15 minutes each month answering questions for your bookkeeper, or uploading supporting docs.