well, if you are listing your occupation as musician, and you are indeed getting paid for your gigs, all of those things, as well as some meals and entertainment, are deductible up to a cap [an accountant can advise on said cap]. and as was stated, you can state a loss on income for 3 years, after which point your musical involvements are considered a hobby. so for the immediate, you can go ahead and deduct. worst-case scenario, you will have just enough deductions to break even, which is still better than owing.
technically, if you have another main job, you can still pool all your earnings [main job + music gigs] under one umbrella income. so long as you have proof of income for the music stuff, such as the w's or 1099s, you can declare that income and thus deduct those related expenses. you can also self-report cash income if that's how you get paid, but i say if there's no paper trail...
as for estimated taxes: i paid them twice in my life as a freelancer. one doesn't HAVE to do it, it's just a good habit to get into if you're not good at setting aside the dough. i used to just set it aside and pay come tax time.
i actually am able to deduct my lessons, studio rent and gear purchases, and i'm not even a paid musician. because i work in advertising, there's a lovely little 'media' clause deduction, which allows me to deduct anything media-related as unreimbursed business-related expenses. thus all my books, dvds, cds, cable tv, concert tickets as well as the above stated expenses, get deducted, up to a cap. it really comes in handy.
as for the corporate thing--that's really only necessary if you hold a true liability risk. as an example, my x was a music instructor/performer, and often gave lessons in peoples' homes. to protect against lawsuits for theft and creepy stuff like child molesting, he incorporated. it's good to have, but you really do pay quite a bit in fees and what-not throughout the year, and oftentimes are taxed more, not less, than being a hired gun/self employed cat. so while income factors in, i'd say it's more about risk being the main determinant of needing corporate protection or not. it doesn't seem to be the case for you. but if you do choose to do it, you can incorporate in another state other than where you live. my understanding is that maryland and nevada are the 2 most corporate-friendly states.
i haven't done the freelance thing in a few years, and some tax laws can differ state-to-state. so please don't take my pov as gospel. i'm just giving general guidelines i ran into as a hired gun, and letting you know that there are sometimes loopholes that allow you to write off some things depending on your line of work. **talk to your accountant. s/he can best advise if tax law x is right for you...**
this reminds me...i need to do my taxes.
