Band as a business.

[JumboJack]

Brought up in another thread.
I'm curious how seriously we take the band management part when it comes to the paperwork.

Who handles the 1099's?
Incorporated?
Insurance?
Am I an employee of the business or a partner?
If incorporated who is the CEO?

The stuff I'm involved in is pretty (very) loose.
If I get a 1099 I claim it. That's about it.

[Kmonk]

I claim income for getting paid to play however, the vast majority of musicians I met do not. Therefore they do not do any of what you mentioned. Legally you are supposed to claim the income even if you do not receive a 1099.

[JumboJack]

Originally Posted by Kmonk

I claim income for getting paid to play however, the vast majority of musicians I met do not. Therefore they do not do any of what you mentioned. Legally, you are supposed to claim the income even if you do not receive a 1099.

Yup....

[yodedude2]

Originally Posted by Kmonk

I claim income for getting paid to play however, the vast majority of musicians I met do not. Therefore they do not do any of what you mentioned. Legally you are supposed to claim the income even if you do not receive a 1099.

do you take deductions for equipment purchase and repair? mileage deductions? depreciation? report capital gains on basses or other gear you flip?

[bluewine]

Originally Posted by JumboJack

Brought up in another thread.
I'm curious how seriously we take the band management part when it comes to the paperwork.

Who handles the 1099's?
Incorporated?
Insurance?
Am I an employee of the business or a partner?
If incorporated who is the CEO?

The stuff I'm involved in is pretty (very) loose.
If I get a 1099 I claim it. That's about it.

I didn't get rich last year but enough to claim.

We're a $400.00 a night small bar band not The Stones.

My band is an llc. I don't know who or if anyone is the CEO. I guess l'm an equal partner. I'm not sure.

No insurance ( my health and dental are provided by my straight career)

Blue

[JumboJack]

Originally Posted by yodedude2

do you take deductions for equipment purchase and repair? mileage deductions? depreciation? report capital gains on basses or other gear you flip?

I would say you can, for sure.
But one should be careful. If the deductions outnumber the income that could be a red flag to mister IRS (although we all know that in a lot of cases it is legit).

[fdeck]

Note that I'm not a lawyer or accountant...

In my opinion a typical band is a "hobby business."

As I understand it, the IRS and most regular people understand the general concept of a "hobby business," which is a business activity that receives income but is not expected to produce a profit.

If your expenses exceed your income, that's a loss. The only unique thing I know about is that you can't write the loss of a hobby business, off of your regular income.

There's nothing magical about a "business." You can call anything a business. It doesn't grant any special entitlement. You still get to make money or lose money just like the rest of us.

[JumboJack]

Originally Posted by fdeck

Note that I'm not a lawyer or accountant...

In my opinion a typical band is a "hobby business."

As I understand it, the IRS and most regular people understand the general concept of a "hobby business," which is a business activity that receives income but is not expected to produce a profit.

If your expenses exceed your income, that's a loss. The only unique thing I know about is that you can't write the loss of a hobby business, off of your regular income.

There's nothing magical about a "business." You can call anything a business. It doesn't grant any special entitlement. You still get to make money or lose money just like the rest of us.

Well said.

A business that does not make a profit is not really a business is it?

Or it won't be for long.

[singlemalt]

We're sinking fast on the band management charts, and here I was thinking a nice tax season discussion would bring folks running!

Fwiw I thought the tax liability question fit neatly into the " even splits or not" thread. If one guy who is the business face of the band is looking at forty grand in income, where nothing has been withheld for tax purposes, and no quarterly estimated payments have been made, he's got a real problem come tax time.

Just because you folded some dead presidents and slipped them into you front pocket, doesn't mean it won't be reported to the IRS.

A couple years ago I made a mistake on my state return by not claiming a carry over contribution to my kids college fund ( a deduction in my favor I would have missed). They caught the mistake and audited me. Even though my mistake went their way. Audits are no fun! Think colonoscopy. Even if you come out clean, it's not how you want to spend hours.

They get a wiff that you are not reporting income and the party really goes south in a hurry. Anybody think the IRS doesn't suspect there is a lot of loose cash floating around in our " business"?

[jive1]

Originally Posted by bluewine

I didn't get rich last year but enough to claim.

We're a $400.00 a night small bar band not The Stones.

My band is an llc. I don't know who or if anyone is the CEO. I guess l'm an equal partner. I'm not sure.

No insurance ( my health and dental are provided by my straight career)

Blue

Usually with a band, I ask about ownership up front. If you don't know whether or not you are an equal partner, it's pretty safe to assume you're not. Unless your name is on the LLC forms or amendments that are filed to the state as a principal, you don't have as much legal grounds to claim ownership of the band.