Band Business Model

Alexander · #1 05-08-2007, 01:07 PM

I looked at the sticky and did a search here, but couldn't really find anything on topic, so forgive me if this has been done before.

I'm in a new band and we've done a couple free gigs just to get out and play. Now we're looking to make a little money playing out (just to cover gas and food\drink at the gig) - we're in it really for the fun. Likely we'll play 1-2 gigs a month at a couple hundred bucks each max, so all total I wouldn't expect us to pull in more than $5-10K a year (split among the 5 folks in the group).

I want to minimize the administrative aspect of doing this, but I do want to make sure I don't get into any kind of trouble with the IRS, et al either. Sounds like the LLC is NOT the way to go, but am curious as to how I should set things up. Thoughts?

Crazyeelboy · #2 05-08-2007, 01:41 PM

Don't bother setting up a separate company for this - keep it simple and have a good time. If you do plan to claim the income for taxes, make sure to keep your receipts for gig expenses, equipment spends and other band related stuff - you can deduct that from the income you make and my bet is that by the end of the year you are going to have actually spent more than you make. Don't worry - just have fun.

Diggler · #3 05-08-2007, 03:26 PM

Most gigs are paid with cash.

That's all I'm sayin'.

basswave · #4 05-09-2007, 11:10 AM

Hello Alex

Here is another point of view.

Forget about the band for a second.

What you can do is claim yourself as a professional Musician.

This includes what you made.

You get to write of the following.

Your gear
Strings
Meals with bandmates/clubowners ect
Website and ISP costs
Travel
Lessons
Ect.......

You can ping me if you like if you have questions.

bradjonesbass · #5 05-09-2007, 11:27 AM

Quote:

Originally Posted by basswave

Hello Alex

Here is another point of view.

Forget about the band for a second.

What you can do is claim yourself as a professional Musician.

This includes what you made.

You get to write of the following.

Your gear
Strings
Meals with bandmates/clubowners ect
Website and ISP costs
Travel
Lessons
Ect.......

You can ping me if you like if you have questions.

plus one. no reason to LLC unless you start actually making a full-time living as a band. Then there are some tax advantages to doing so.

Alexander · #6 05-09-2007, 03:11 PM

So, if I hold a steady full-time job and no desire to go pro\full-time, I would just claim $$$ made from gigging as income and could then write off all of the equipment as a deductable expense? You are right - I would come off seriously in the red by the end of the year. I would guess I'd make MAYBE $2K\year max, but plan on spending significantly more than that on equipment, strings, etc.

What classifies me as a pro musician? If I got paid at all for playing music in a given tax year?

Thanks for the help.

subtomic · #7 05-09-2007, 03:26 PM

Quote:

Originally Posted by Alexander

So, if I hold a steady full-time job and no desire to go pro\full-time, I would just claim $$$ made from gigging as income and could then write off all of the equipment as a deductable expense? You are right - I would come off seriously in the red by the end of the year. I would guess I'd make MAYBE $2K\year max, but plan on spending significantly more than that on equipment, strings, etc.

What classifies me as a pro musician? If I got paid at all for playing music in a given tax year?

Thanks for the help.

I 2nd these questions - how exactly does someone with a full time job claim musician expenses?

bradjonesbass · #8 05-09-2007, 03:31 PM

Same way you would claim expenses/income for any other part-time, home based business. Make an appointment with your local HR Block and speak to them. Now's a great time since it's their slow season after the recent big tax day.

basswave · #9 05-09-2007, 03:46 PM

Brad is correct......

Just like you have a part time biz.

Alex check your PM's

aceshigh · #10 05-09-2007, 05:16 PM

If you take what you make with music and deduct all your costs (gear, strings, fuel, car mileage...) I bet a coffee you'll end up with a loss.

But then you'll have to do all the accounting work, keep the receipts, etc. That can be very time consuming. It might end up giving you a little tax benefit but in the end I don't think it is worth the trouble.

Bottom line is, I treat all the money I make in music as petty cash and leave the IRS (CCRA in Canada) out of this. I concentrate in having fun and leave the accounting for my 9 to 5 job.

IRS has bigger fish to catch, bigger problems to worry about...