U.S. TAX RETURNS FOR ARTISTS, MUSICIANS AND OTHER PERFORMERS

If you are performing services in the United States, you are a subject to U.S. income tax. This includes most (if not all) performing artists, musicians and other performers. The income subject to U.S. tax includes, but is not limited to, compensation for performances, endorsements, sale of merchandise and royalties.

Any income earned in the United States is subject to U.S. income tax, however, there are special rules that may be applied in certain cases:

1)Any income earned as an entertainer (a theatre, motion picture, radio, or television artist, or a musician, or as an athlete) and that does not exceed $10,000 per tax year is exempt from U.S. income tax. This exemption does not mean that there is no withholding, however, when filing a U.S. tax return, if the income is less than $10,000, it is exempt from the taxation by invoking a tax treaty between the United States and The Netherlands. Please note that if the income is more than $10,000, the whole income should be taxed and there is no exemption.

2)Royalties arising in the United States and received by a resident of The Netherlands should be taxed only in The Netherlands. Royalties are payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic, or scientific work. For example, if you have recorded a song that is aired as a part of commercial and you receive payments for every time they play your song. This exemption can be invoked by filing form W-8BEN and listing the exemption details or by filing U.S. tax return and invoking the tax treaty benefits.

If you need help with understanding your U.S. tax position as an entertainer, please feel free to contact us using the contact form below or info@taxprep.nl