2022 and 1099's and AB5 ??? ***

[mike buzzetti]

So now anything from any place you play has to 1099 you for $600 over , then there's AB5 ?? , WTH I used to just get paid CASH and move on ( I know ya ya ) we have been playing wineries in my area , they pay more and I charge more IF they 1099 ( in 2021/20 ) now that is changing again.

1. Does a Bar-Winery-owner need to inform you IF they will 1099 you ?
2. What is the avg amount you should deduct for taxes ? 25/30%
3. DO I just do an LLC
4. *** ????

If this has been gone over in another thread send me a link

 

[Pacman]

I would assume anyone investing in my group for business purposes is going to write off my services as an expense, therefore I will get a 1099.

The rest of your questions sound like they'd be better answered by your tax professional. None of this is new, so consult with them.

 

[two fingers]

So now anything from any place you play has to 1099 you for $600 over , then there's AB5 ?? , WTH I used to just get paid CASH and move on ( I know ya ya ) we have been playing wineries in my area , they pay more and I charge more IF they 1099 ( in 2021/20 ) now that is changing again.

1. Does a Bar-Winery-owner need to inform you IF they will 1099 you ?
2. What is the avg amount you should deduct for taxes ? 25/30%
3. DO I just do an LLC
4. *** ????

If this has been gone over in another thread send me a link

I'm not a tax professional. But, based on this explanation....

https://www.investopedia.com/california-assembly-bill-5-ab5-4773201

....I don't think you have to worry about AB5. It seems more geared toward the services that deliver other business' food. I think musicians meet the exemption test standards. I could be wrong.

That said, we had to have the conversation in our band. We take less money per person than an equal split to save up for taxes. We get a 1099 from every bar. Our female singer handles the money. When she gets her taxes done either we pay her for the difference in what we saved and what she paid or we get a "refund" from her.

So far it's been close to zero. The last two years there has been something like $100 overage in what we paid her. But she brings us baked goods to every rehearsal so we call it a wash. (She runs a bakery out of her home and her work is sublime. For twenty bucks a year it's more than worth it for her to keep bringing me treats. )

I think we're going to set up an LLC this year. It's pretty easy to do and then we can open an account under our name. As co-owners we can write off every single dime of gear, travel, meals at shows, etc. I am positive I would run at a loss every year. But I'm fine with that too. )

 

[AGCurry]

I think we're going to set up an LLC this year. It's pretty easy to do and then we can open an account under our name.

What do you mean by "open an account?" The LLC issues K-1s to each LLC member, and the members must file Schedule E. There is no "account" involved.

As co-owners we can write off every single dime of gear, travel, meals at shows, etc. I am positive I would run at a loss every year. But I'm fine with that too. )

All the expenses you list as deductions can be deducted on an individual's Schedule C (Profit or Loss from Business). Each member of a multiple-member LLC - like a band - must still report income from the business, but it's even more complicated (and expensive, if you pay a preparer) than simply reporting your individual income and deductions.

Moreover, what if Billy Bob gets a much more expensive meal, or has to drive twice as far, as Duane Earl? If that's an LLC expense, then Duane is subsidizing Billy Bob's income. If the PA needs to be fixed, is that an LLC expense or the PA owner's expense? If you need new strings, I think you'd buy them, so you would want to expense them anyway, same as if you filed your tax return the way you do now.

Finally, is the bandleader willing and able to handle the extra documentation and expense required by an LLC?

 

[two fingers]

What do you mean by "open an account?" The LLC issues K-1s to each LLC member, and the members must file Schedule E. There is no "account" involved.



All the expenses you list as deductions can be deducted on an individual's Schedule C (Profit or Loss from Business). Each member of a multiple-member LLC - like a band - must still report income from the business, but it's even more complicated (and expensive, if you pay a preparer) than simply reporting your individual income and deductions.

Moreover, what if Billy Bob gets a much more expensive meal, or has to drive twice as far, as Duane Earl? If that's an LLC expense, then Duane is subsidizing Billy Bob's income. If the PA needs to be fixed, is that an LLC expense or the PA owner's expense? If you need new strings, I think you'd buy them, so you would want to expense them anyway, same as if you filed your tax return the way you do now.

Finally, is the bandleader willing and able to handle the extra documentation and expense required by an LLC?

Relax, tax man. I meant a BANK account for the band....so that checks from venues can he made out to the band, and not one member, thus saving that ember the hassles of doing all of the taxes.

And I didn't mean that the LLC would he writing off oyr individual expenses.

And simple LLC stuff can be handled mostly online these days. One of our members is a banker with an accounting degree. We have it all under wraps.


You infered a metric TON of stuff from my post that wasn't there.

Your uptight nature is well-suited for accounting.

 

[AGCurry]

... checks from venues can he made out to the band, and not one member, thus saving that ember the hassles of doing all of the taxes.

"The band" won't have the hassles of doing all of the taxes. A human being will, and there won't be any fewer hassles, whether your bandleader does them herself or pays someone to do them; and how does it save any hassles for the non-bandleaders?

And I didn't mean that the LLC would he writing off oyr individual expenses.

Okay. What expenses will the LLC be writing off? The only ones I can think of that couldn't be deducted anyway would be the ones associated with administration and filings of the LLC.

And simple LLC stuff can be handled mostly online these days. One of our members is a banker with an accounting degree.

"Online" doesn't mean easier or simpler. The harder part is always gonna be maintaining and keeping records. If your banker member wants to do that work, great.

You infered a metric TON of stuff from my post that wasn't there.

Yes, I did infer some... I wouldn't call it a ton, metric or not. My intent was simply to point out that, for a band, an LLC is no less work than no LLC. The primary reason for establishing an LLC is in its name: "Limited Liability."

LLC Advantages:

• Liability protection against business debt, lawsuits, and personal assets
• Higher level of credibility
• Flexible tax options
• Easier for multiple members and investors
• Flexible management structures
• Easier access to loans, financing, leases, and more
• Easier to hire employees
• Ability to register a business in another state

LLC Drawbacks:

• State filing requirements
• Annual fees
• Higher startup costs
• Tax returns can be more complicated
• Higher administrative costs (registered agents, accountants)

Your uptight nature is well-suited for accounting.

Now who's inferring?

 

[SoCal80s]

Relax, tax man. I meant a BANK account for the band....so that checks from venues can he made out to the band, and not one member...

I think you missed his point. ALL of the things you say you want to do with the LLC are things you can do now by simply getting a business license as a partnership or sole-proprietorship. The main reason to get an LLC is for liability protection, and then you have to do specific things in a specific way or you lose that protection, thus negating the benefit of the LLC. Point being that maintaining an LLC is work and you should really consider how much work is involved, WHO among you will do that work, and how you will cover the extra costs.

 

[two fingers]

"The band" won't have the hassles of doing all of the taxes. A human being will, and there won't be any fewer hassles, whether your bandleader does them herself or pays someone to do them; and how does it save any hassles for the non-bandleaders?



Okay. What expenses will the LLC be writing off? The only ones I can think of that couldn't be deducted anyway would be the ones associated with administration and filings of the LLC.



"Online" doesn't mean easier or simpler. The harder part is always gonna be maintaining and keeping records. If your banker member wants to do that work, great.



Yes, I did infer some... I wouldn't call it a ton, metric or not. My intent was simply to point out that, for a band, an LLC is no less work than no LLC. The primary reason for establishing an LLC is in its name: "Limited Liability."

LLC Advantages:

• Liability protection against business debt, lawsuits, and personal assets
• Higher level of credibility
• Flexible tax options
• Easier for multiple members and investors
• Flexible management structures
• Easier access to loans, financing, leases, and more
• Easier to hire employees
• Ability to register a business in another state

LLC Drawbacks:

• State filing requirements
• Annual fees
• Higher startup costs
• Tax returns can be more complicated
• Higher administrative costs (registered agents, accountants)

Now who's inferring?

I'll tag out after clarification (because my derail seems to be causing more confusion than it'd intended comedic value).

Perhaps using the term "LLC" is where I messed up.


1) The amount of money we (individually or together) make annually is a drop in tue bucket. We do maybe 15 or 20 $1000 bar gigs and a dozen $2000+ private parties a year. We all spend more than we make on gear/travel/food/drinks/etc.

2) We had a conversation about it a while back and the banker brought up enough good reasons to set up a "bizniss"...perhaps not an LLC. So we might even be debating something that has no bearing on the OPs topic.


My apologies for that.

 

[mike buzzetti]

1. Does a Bar-Winery-owner need to inform you IF they will 1099 you ?
2. What is the avg amount you should deduct for taxes ? 25/30%

Ok kids how about these ???? 's

 

[filwitheneff]

So now anything from any place you play has to 1099 you for $600 over , then there's AB5 ?? , WTH I used to just get paid CASH and move on ( I know ya ya ) we have been playing wineries in my area , they pay more and I charge more IF they 1099 ( in 2021/20 ) now that is changing again.

1. Does a Bar-Winery-owner need to inform you IF they will 1099 you ?
2. What is the avg amount you should deduct for taxes ? 25/30%
3. DO I just do an LLC
4. *** ????

If this has been gone over in another thread send me a link

1. They have to get a Social Security Number and address of the recipient of the 1099. They will have you fill-out a W-9 for that info. If they hand you a W-9, they intend to send you a 1099. If you refuse to fill-out the W-9, they can legally withhold a percentage of what they owe you until you comply.
2. That depends on your overall marginal tax rate. Also remember that you only pay taxes on profit.
3. I seriously doubt it.

I'm not in CA, so I know pretty-much nothing about AB5.

 

[AGCurry]

1. Does a Bar-Winery-owner need to inform you IF they will 1099 you ?
2. What is the avg amount you should deduct for taxes ? 25/30%

Ok kids how about these ???? 's

1. See the answer from @filwitheneff . However, I've been issued 1099s without having completed a form W-9. If you're asked for your SSN, expect to get a 1099.

2. Deduct from what? Do you mean withhold? A 1099 is not the same as a W2; there are no taxes withheld. You pay income taxes on all taxable income. Almost all of us have income from other sources than performing, and if you are an employee, your wages/salary are subject to withholding. If your NET profit from performing (and any other business activity) exceeds $400, you must also pay self-employment tax - which is really the FICA, or social security tax - on that net amount.

Edit: Unless you are darned wealthy, 25% is a lot of income tax to pay.

 

[AGCurry]

ALL of the things you say you want to do with the LLC are things you can do now by simply getting a business license as a partnership or sole-proprietorship.

The IRS doesn't give diddly-squat about a business license. I've never heard of a band having one. ?

 

[MultiScaleMale]

If you're dealing with 1099's my opinion is that it's best to set up the band as a business, checks go through the band and members are paid from the band account. If one member is getting all the checks in their personal name, it could bump up their annual income and issues like if you are laid off and filing for unemployment, kid goes to college, filing for financial assistance, etc. So in bands with no band leader, nobody wants to be the guy that is taking the hit and the hassle on the taxes. Depending on the amount you're being paid per year I've heard of bands taking turns getting the checks in each of their names on different nights and then paying everyone later. The goal was to keep everything below $600 / individual in total when being paid via check. Most places pay cash and if they want to 1099, then that adds significant overhead and the price goes up 40%. If that's too much, cool.

 

[Gorilla Fingers]

This thread suddenly makes me glad that I make no money playing metal in my bedroom.

 

[StereoPlayer]

I let my tax guy handle my taxes.

 

[two fingers]

The IRS doesn't give diddly-squat about a business license. I've never heard of a band having one. ?

My corporate/private/wedding band sure had one (LLC as well). But, then again, we brought in around $675K one year (200+ shows between $3000 and $8000). So there's that.

You must he talking specifically about part-time bar bands?

 

[AGCurry]

If you're dealing with 1099's my opinion is that it's best to set up the band as a business, checks go through the band and members are paid from the band account.

Agreed, if for no other reason than to compartmentalize the band's financial activities.

If one member is getting all the checks in their personal name, it could bump up their annual income and issues like if you are laid off and filing for unemployment, kid goes to college, filing for financial assistance, etc. So in bands with no band leader, nobody wants to be the guy that is taking the hit and the hassle on the taxes.

I get what you're saying ... but somebody has to take "the hit and the hassle." In the cases you provide, that person's income at any given point in time is what she's actually cleared after expenses. Knowing what that number is a matter of bookkeeping - which takes a simple spreadsheet and should be a skill required of anyone who endorses and signs checks.

 

[AGCurry]

My corporate/private/wedding band sure had one (LLC as well). But, then again, we brought in around $675K one year (200+ shows between $3000 and $8000). So there's that.

You must he talking specifically about part-time bar bands?

Maybe I am, although I now make most of my performance income from religious solo work. You're obviously in a higher tier than most of us! But even so... was a business license required? Issued by what, a municipality or a state?

 

[mike buzzetti]

Now that everything is totally clear LMFAO ! thanks guys

 

[mike buzzetti]

Maybe I am, although I now make most of my performance income from religious solo work. You're obviously in a higher tier than most of us! But even so... was a business license required? Issued by what, a municipality or a state?

Biz licenses are so you can PAY local taxes , screw that , I have a 26 YR OLD BIZ , NEVER HAD A BIZ LICENCE .