Since the launch of Apple Music, your iTunes library can contain several different types of music files, and they can be stored in different locations. You may have files that you’ve ripped from CDs, which are stored on your Mac. Your library probably holds some music that you bought from the iTunes Store, which may be on your Mac, or may be in the cloud. And if you’ve signed up for Apple Music, you might have added some music to your iTunes library. It may be local, or it may be on Apple’s servers.
All this can be a bit confusing. While you don’t always need to know which tracks or on your Mac or in the cloud, it can be useful. For example, if you decide to not opt for an Apple Music subscription after your three-month trial expires, you’ll want to check and make sure that none of the music you’ve added from Apple Music to your iTunes library remains there. Or, if you need to make space on your drive, you might want to find which of your tracks are Apple music tracks or purchased tracks stored in the cloud, and delete the local copies.