Plan for a Band with Peter Brown

So this listener writes in and says, Hi Dan, my husband's band makes a little money from gigs, but between guitars, amps, studio time, and travel, they probably spend more than they make.

So the question every hobbyist musician's wife wants to ask, can we write any of this off on our taxes?

That's definitely a CPA question, but it falls on the fault line of hobby versus business.

Yeah.

And I have to defer this question to a CPA.

All right.

Right.

We're not tax experts, but we're here to help and guide.

Yeah.

Obviously, I cannot give tax and or legal advice.

And also, I'm not an expert in any of it, just to clarify.

What I would say is this.

I can talk about discretionary income or discretionary spending.

And here's how I would view it.

So let's just say a couple goes out to dinner three times a month and spends $1,000.

That's $12,000 a year.

I'd be willing to guess that this man is spending about $12,000 a year on his passion.

Sure.

If it makes him happy, I wouldn't look so much for the tax write-off as I would for the happiness quotient.

So you're saying put it in the plan.

Put it in the plan.

Don't worry so much about how much it is because it sounds like it's manageable.

I would lean towards the pie chart of having an emergency fund.

Are you funding your Roth IRA, your company 401k? Do you have good health? Are you pursuing some things that make you happy? And I'm sure this person asking the question has something that she's passionate about.

So I look at it more from a happiness quotient because happy partnerships, basically longevity, being happy is part of that.