I was a freelance writer for several years. When it was a side job and I was paying taxes through a regular job, no problem, the income from writing wasn't so much that my deductions weren't sufficient. When it was my only job then I had to estimate my income ahead quarterly and pay ahead. What a pain. But as has been noted above, if you call yourself a business then you can begin taking deductions for things that cost you money for your music business. Some things can be amortized, others paid for all in one year. Don't lose money every year, or they'll tell you it's a hobby, not a business. Break even or make a small profit every now and then. Keep all of your receipts.

If you're planning to continue to work off of the books, then use the cash for inconspicuous purchases and destroy the receipts. Keep track of the checks you were paid with, those are the paper trail that can hang you. While it is probably best to declare those, think about the other instances when cash might come your way. Does anyone declare proceeds from a garage sale to be income? Money from other small occasional windfalls? It might all just mix in, no big deal.

Personally, I wouldn't go with a computer program (Turbo Tax or any other) for sorting out business things on an exploratory basis. Talk to an accountant or go to the library and you'll find quite a few current books to do with the tax code. An accountant isn't like a priest, he/she can testify about your conversation. Try the library first--they don't keep records of what people check out.

Working off of the books is a time-honored tradition in the U.S. I don't buy the arguments about paying your bit for all of these honest-sounding federal programs. You give that money to Bush and he's just going to turn around and give it to one of his rich republican friends as an "incentive" of some sort. At the most, with the income you're not reporting, you're shorting Bush a couple of hundred dollars. Better you keep it than he gets his mits on it.