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  • venues n taxes......another venue, wanting to tax

    On our NYE gig....I was paid at the end of the night by check, and inside they slipped a w-9 form in without me knowing. We only play about 2-3 times a month and hardly make enough to pay taxes on that. We all have daytime jobs, and music is just a hobbie. How do you deal with owners about this. the check is not made out to the band, but me personally. I know the other bandmembers will not pay taxes, its been discussed before, and even dropped a venue because of it earlier this year. I was wondering if we asked for more money to compensate for the taxes, how much would that be 25-30%? If this venue wasnt a decent gig, we would just move on. The venue already has us booked for 4 nights into july this year. Just looking for ideas, and some experience in this.
    Jack of all trades....Master of none...

  • #2
    Start treating the band as a business. Pay taxes on what you owe or stay home. I have been paying taxes on band income my entire career of 35 years.

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    • #3
      You need to document this to an accountant what you spend on the business and how the tax laws apply to your band by your state taxing jurisdiction as well as federal taxes. Need to cover your butt or they will eventually audit you as a sole prop as it shows you made that taxable income which sooner or later you have to pay.

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      • #4
        I understand running things as a business......if I did it that way, the business would always lose money. I know I did this with my racing business for years. Some years we would break even, but most we lost money because it was a hobby/business. Music is the same way with us a hobbie. If we did decide to pay taxes on this venue....how much more does that figure in to the pay to cover taxes? How would you ever gig knowing some places make you file taxes and some dont.......
        Jack of all trades....Master of none...

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        • #5
          If you get a 1099 from anyone who you filled out a w9 for, you'll have to report it. I didn't report one time a long time ago and paid about 5x in penalties on what I would have paid if I had reported it. I won't do that again.



          If you get a 1099, fill out a schedule C business profit/loss. Write off everything you can- gear, miles on your vehicle, and report anything you paid out to the band members as a subcontractor expense. If it's under $600 each you don't need to send them a 1099 if it is more, then you do. If you spend more $$ on gear than you make in a year, then you should be reporting it all and get the tax break. I report everything, not just 1099 gigs. I also write off everything I'm allowed to- miles to and from gigs and rehearsals. Clothing used only for the band. Gear expenses. Meals at gigs. Etc...



          Talk to an accountant. Regardless of whether you want to treat it as a business or not, don't short sell yourself on your rights as a tax payer, and don't renege on those obligations, you'll eventually get bitten!
          My Live Gear: Roland FA-08, Hammond SK1-73, Moog LP
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          • #6
            Dude, if I were you I wouldn't admit to not paying taxes on a public forum like this!



            Fact is, any money you earn gigging is income and taxable. If you run it like a business and the business loses money, that's actually a good thing for your taxes. Just keep records and take your deductions and you'll probably come out ahead on $$$ by the end of it. The one thing that sucks is, it will probably increase your chance of getting audited so make sure your ducks are lined up.
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            • #7
              Bite the bullet. It's something we deal with on most of our gigs.



              If you want to mark up your price to cover what you'll pay in taxes, mark up 25%.
              Christian

              SpaceCat
              www.spacecatband.com

              "When the power of love overcomes the love of power, the world will know peace." - Jimi Hendrix







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              Our singer is basically butchering the Grade A material into deli meat, but don't fear... the crowd is there for big sandwiches.

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              • #8
                The club owner wouldn't be able to declare all of the money he pays out to bands for the year if he didn't send you a 1099.



                As far as on your end ... you can lose money as a "business" for 3 years. After that the government views it as a hobby and you can't deduct expenses on a hobby.
                Don Boomer

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                • #9
                  thanks guys i appreciate it.....will check with my tax person...
                  Jack of all trades....Master of none...

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                  • #10
                    There are enough advantages for most people that it makes sense to declare the income. With the government promising more audits of individuals and businesses moving forward, and the relatively low cost of setting up an LLC, you're crazy if you have a regular situation and don't cover yourself.
                    "That's what the internet is for, slandering other people anonymously." -Banky Edwards

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                    • #11
                      If the band is a relatively small-time deal---less than a few thousand per member a year---the easiest thing is to issue 1099s for each band member and let them deal with their own share however they see fit. It's very easy to come up with that much in music-related expenses for each person to off-set the increase in income.



                      If the band is earning quite a bit of money every year, I'd look into setting it up as an LLC and dealing with it as separate entity so you're not entirely responsible for everything.
                      _________________________________________________
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                      • #12






                        Quote Originally Posted by dboomer
                        View Post

                        The club owner wouldn't be able to declare all of the money he pays out to bands for the year if he didn't send you a 1099.



                        As far as on your end ... you can lose money as a "business" for 3 years. After that the government views it as a hobby and you can't deduct expenses on a hobby.




                        I was not aware of that rule. Do have any authority for that?

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                        • #13






                          Quote Originally Posted by jimiv
                          View Post

                          I was not aware of that rule. Do have any authority for that?




                          It's a myth. Some people go decades with their small business ventures without showing a profit. You don't have to show a profit, although I suspect that the longer you don't, the more it sends a "red flag" to the IRS and might trigger an audit.



                          The main thing you need to do is show that you INTEND to make a profit. The more "legitimate" you have your business set up, the more it looks like something real rather than a hobby. Keep good records of income and expenses. File taxes on it regularly.
                          _________________________________________________
                          band websites:
                          http://www.JumpStartYourParty.com
                          https://www.gigmasters.com/Rock/Jump-Start
                          https://www.facebook.com/JumpStartYourParty
                          http://www.weddingwire.com/biz/jumps...587fe5f12.html

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                          • #14
                            Three years is what they gave me for my racing business too, but they never came knockin at my door. Racing was much more expensive than music. I think they give you a three year as areference but have never heard of anyone told to shut theyre doors.......the not making money to support your family should be enough appeal for anyone to close the doors.






                            Quote Originally Posted by guido61
                            View Post

                            It's a myth. Some people go decades with their small business ventures without showing a profit. You don't have to show a profit, although I suspect that the longer you don't, the more it sends a "red flag" to the IRS and might trigger an audit.



                            The main thing you need to do is show that you INTEND to make a profit. The more "legitimate" you have your business set up, the more it looks like something real rather than a hobby. Keep good records of income and expenses. File taxes on it regularly.




                            Jack of all trades....Master of none...

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                            • #15
                              My wife used to do a lot of tax work when she was practicing law, and there are a lot of folks who get audited because of their "businesses". Stables, recording studios, etc.--the IRS sniffs these things out. As for the OP, pay your taxes. They pay for the roads you use to get to the gigs, subsidize the electricity you're plugging into, cover the salaries for a good cut of your audience, make sure your comped liquor won't leave you blind, etc. I am the band "accountant", and take a cut for the band fund every once in a while, and fill out the paperwork for the taxes and pay for it out of that.
                              Jukejoint Handmedowns (my band)

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