Invoicing restraunt for gig pay?

[denton57]

I just played a patio gig at a nationally known restraunt last night. We absolutely packed the patio with our crowd. A lot of people had to stand. After we got the bare minimum they promised us depending on the crowd (they said they'd pay more depending on our crowd, which we absolutely did) they wanted us to play again in two weeks. A dude came up to us and said they could pay us cash this time but next time they wanted us to send them an invoice. Dude said they have new management and that's how they want to do it. I have never heard of that, and actually don't like it especially since they didn't kick in for the huge crowd we brought. Is this normal? I've played quite a few gigs at a variety of places, but this was the first at a national type sports bar. Is this normal or fishy? .

[two fingers]

23 years of playing and I have NEVER even HEARD of sending and invoice. I would turn it down unless you guys are hurting for gigs.

[chondro776]

I have never been asked to provide an invoice to get paid for a show, but in any other business in the world it would be more or less standard.

Invoice is just a fancy word for 'bill'.

Actually, it is a very good idea.

Just type up a simple sheet with your band's info, the club's info, date of the event, who to make the check out too, and the amount due, etc....

[two fingers]

When the OP stated that they want the band to "send them" an invoice, that implies not getting paid that night. NOT a good idea at all.

[weary hobo]

Yes, it's normal. A mom-and-pop outfit might be able to pay cash every time, but anything larger--especially a nation-wide chain restaurant--would have to account for every penny that they pay out, whether it's to you, their employees, or the vendors who sell them their liquor. Since the passing of the Sarbanes-Oxley act of 2002, many businesses have had to be much more cautious to show where the money goes.

The bummer is that you'll have to wait a few weeks for your money; the nice thing is you probably don't worry so much about getting stiffed.

Edit: chondro 776s right--the invoice doesn't have to be anything fancy. It simply needs to show the restaurant's accountant who got paid, and why.

[akaTRENT]

Originally Posted by weary hobo

Yes, it's normal. A mom-and-pop outfit might be able to pay cash every time, but anything larger--especially a nation-wide chain restaurant--would have to account for every penny that they pay out, whether it's to you, their employees, or the vendors who sell them their liquor. The bummer is that you'll have to wait a few weeks for your money; the nice thing is you probably don't worry so much about getting stiffed.

+1

[KrisH]

Figure out amongst yourselves now who wants to take the 1099 you receive next January . . .

[fdeck]

I have had to do similar things for gigs at nationwide chains. Of course it is more complicated than getting paid cash.

An invoice doesn't have to be complicated. Just the word "INVOICE" with your name & address, a description of the service provided, the amount of money, and "terms" which is when you want to get paid. I always stipulate:

TERMS: PAY IN ADVANCE

I send the invoice before the gig, and generally, I have been greeted by someone with a check when I get there.

Unless you are flying under the radar, 1099's are a way of life. It's not a huge deal. I am not an accountant, but a lot of local bandleaders have a simplistic method: When paid by check, they pay the band members by check too, thus giving them a record of the expense at tax time.

[Jim Campbell]

Originally Posted by fdeck

I have had to do similar things for gigs at nationwide chains. Of course it is more complicated than getting paid cash.

An invoice doesn't have to be complicated. Just the word "INVOICE" with your name & address, a description of the service provided, the amount of money, and "terms" which is when you want to get paid. I always stipulate:

TERMS: PAY IN ADVANCE

I send the invoice before the gig, and generally, I have been greeted by someone with a check when I get there.

Unless you are flying under the radar, 1099's are a way of life. It's not a huge deal. I am not an accountant, but a lot of local bandleaders have a simplistic method: When paid by check, they pay the band members by check too, thus giving them a record of the expense at tax time.

the downside is that uncle sam has a record and will want a cut.........the upside is that your expenses are deductible.....the pay in advance thing is the only way to go and should be on the invoice in really bold type....showing good business sense makes them take you seriously

[fdeck]

Originally Posted by Jim Campbell

the downside is that uncle sam has a record and will want a cut.........the upside is that your expenses are deductible.....the pay in advance thing is the only way to go and should be on the invoice in really bold type....showing good business sense makes them take you seriously

The cut is called income tax. Uncle Sam actually wants it even if there is no record.

[azureblue]

Just dig up a MS word Invoice, and change it around. You will need to include a SS number, or a business tax number, plus a name or business name and a mailing address.

Note- whoever's SS number is on the contract will get stuck paying taxes on the gig, so keep this in mind, if the band is not a legal entity. Taxes will be 1099, and the payment will be reported by corporate.

Be sure to include the following statement:
"All bills are to be paid in full from 30 days of invoice date, unless other arrangements are made in writing, and signed by both parties. Past due bills are subject to a 11% carrying charge, compounded monthly. Should this bill go unpaid for over 90 days, the (band) reserves the right to pursue payment in court, and all legal fees and court costs incurred in the pursuit of payment will be paid by the (client)."

this may seem 'harsh" to us, but it is standard boilerplate in a lot of companies' invoicing.


Prepare the following statement and have two copies with you when you go to the gig:

"On (date) (the band) was hired to perform on (date, time from to), for the fee of ($$), and the band performed satisfactorily and to the specifications given by (the venue), fulfilling the terms of the performance agreement."

Have a signature line for band, and one for the venue's rep, with his or her contact information, and dates of signature for both parties.

At the end of the gig, have both copies signed, you keep one and the other for the venue, and turn in a copy with the contract. This is a CYA inc case somebody screws up the payout at corporate.

[Richland123]

I have had to invoice a venue in the past. By the same token, you should require them to sign a contract stating the fees, terms and conditions agreed upon.

[Freddels]

Originally Posted by azureblue

J
Note- whoever's SS number is on the contract will get stuck paying taxes on the gig, so keep this in mind, if the band is not a legal entity. Taxes will be 1099, and the payment will be reported by corporate.

That is not correct. The person getting paid by the club will not get stuck paying all the taxes. He/she will pay the other band members by check and will issue them a 1099 at the end of the year. You will deduct out the payments to the other band members and this will be the amount to include in your income. Then you can deduct things like mileage, depreciation, expenses, etc.

[Nagrom]

Paying by invoice does not necessarily involve the granting of credit. You all well within your rights to state yours terms as 'payment due upon receipt of invoice'. Otherwise the restaurant should expect to submit a credit application with references, just like they do with the rest of their suppliers.

[steveksux]

Originally Posted by Freddels

That is not correct. The person getting paid by the club will not get stuck paying all the taxes. He/she will pay the other band members by check and will issue them a 1099 at the end of the year. You will deduct out the payments to the other band members and this will be the amount to include in your income. Then you can deduct things like mileage, depreciation, expenses, etc.

What he said. Its pretty easy, the tax software programs make short work of the extra effort, and well worth it to claim the deductions. All of a sudden your gear is 1/3 off more or less.

Randy

[ChrisB2]

Originally Posted by steveksux

All of a sudden your gear is 1/3 off more or less.

Unfortunately, for hobby income the IRS only allows you to deduct an amount equal to your income (unless of course music is your main income).

In other words, you can't show a loss that reduces your tax liability on your normal taxable income. You can, however, zero-out your music earnings (if you spent it all or more on gear and expenses).

You could also just go ahead and deduct it off your other tax liability... although it's not allowed. Just hope you don't get audited.

[Febs]

Originally Posted by ChrisB2

Unfortunately, for hobby income the IRS only allows you to deduct an amount equal to your income (unless of course music is your main income).

In other words, you can't show a loss that reduces your tax liability on your normal taxable income. You can, however, zero-out your music earnings (if you spent it all or more on gear and expenses).

You could also just go ahead and deduct it off your other tax liability... although it's not allowed. Just hope you don't get audited.

This is not accurate. You can file a schedule C for music-related income and you can show a loss on that schedule C, even if music is not your "main income," so long as music qualifies as a business activity. A business activity is one that is carried on with the reasonable expectation of making a profit. The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year. So, you can take a loss against regular income in a given year if music is part of a business for you where you have a reasonable expectation of making a profit; you just can't take a loss from music against regular income every year.

[fdeck]

Originally Posted by steveksux

What he said. Its pretty easy, the tax software programs make short work of the extra effort, and well worth it to claim the deductions. All of a sudden your gear is 1/3 off more or less.

Randy

+1

TurboTax makes this very easy.

[ChrisB2]

Originally Posted by Febs

This is not accurate. You can file a schedule C for music-related income and you can show a loss on that schedule C, even if music is not your "main income," so long as music qualifies as a business activity. A business activity is one that is carried on with the reasonable expectation of making a profit. The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year. So, you can take a loss against regular income in a given year if music is part of a business for you where you have a reasonable expectation of making a profit; you just can't take a loss from music against regular income every year.

You are correct, but I am not wrong.

I clearly stated "for hobby income the IRS only allows you to deduct an amount equal to your income" ...

If anyone would like to know how the IRS determines what is a hobby and what is a business, they can go here.

I think it was obvious from the post I quoted that "mak[ing] a profit during at least three of the last five tax years, including the current year" (your words) was not on the poster's mind when he said "all of a sudden your gear is 1/3 off more or less." If he's using equipment purchases every year to reduce his taxable income, he clearly is not, and has no intention, of ever showing a profit, but only using equipment purchases to reduce his tax liability.

I don't see how what I said was inaccurate, except that I failed to indicate that, yes, you could claim the deductions if you show a profit most years. However, that exception was not relevant to the post I was quoting. Your post was at least as inaccurate, if not more so, than mine, in regards to its relevance to the post I quoted.

But hey, no hard feelings, Febs! Rock on!

[steveksux]

Actually, you're right about the hobby income thing.

I assumed its a business if they're bothering to do taxes. Wouldn't think too many hobbyists go to the trouble. And if you're gigging regularly at all, unless you're a real gear hound, hard to spend more than you make. At least I had trouble not making a profit. Maybe if you're in a "pay to play" area, that's a concern. I was playing a lot more when I was a gear hound though, nearly every weekend or more. I was able to get pretty top of the line gear and maintain a profit. Half of it was to prevent paying a lot of taxes on the profits... 6 string Ken Smith, Pedulla 5 string fretless Rapture, Eden Nav, Crown K1, Xwire, EA speakers.... Now that I'm married, gigs and GAS are both way down. Wondering how I'll replace any of that stuff if it breaks... More worried about what the wife will say rather than the IRS... :rofl: But as long as you make a profit often enough, yes you can deduct losses from music from your day gig income.

I try to clump equipment purchases on one year, usually if I make one major purchase, that's the year I get everything I've been jonesing for. Maximizes the deduction for that year, the other years, I try to keep purchases down to a minimum, to guarantee I make a profit often enough to qualify as a business. I believe if you screw up and it defaults to a hobby, any deductions over your band income that you used as a write off on your day gig taxes suddenly become null and void for at least some of the prior years (the ones that don't meet the "show profit every so many years"). And they become subject to interest and penalty from the time they are filed once those deductions are disallowed.

And have to file schedule C to document everything.

Randy