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Anyone else contemplate this?!

Discussion in 'Band Management [BG]' started by lbbc, Mar 5, 2019.

  1. lbbc

    lbbc Supporting Member

    Sep 25, 2007
    Seaford , DE
    I'm simply asking for how others do this...is this the case with everyone. I do not appreciate this type of condescending reply.
  2. QORC


    Aug 22, 2003
    Elberon, New Jersey
    its condescending that I tell you that paying income tax is the law and that trying to avoid it is wrong? really?
  3. QORC


    Aug 22, 2003
    Elberon, New Jersey
    I keep track of what I get paid - even in cash. I also keep track on a spreadsheet and pictures of receipt all my allowable expenses/deductions. that's how it's done legally and morally.
  4. lbbc

    lbbc Supporting Member

    Sep 25, 2007
    Seaford , DE
    No...to move somewhere else!
  5. Lance Bunyon

    Lance Bunyon

    Jul 17, 2018
    You just aren't "buying enough equipment".
    Receipt books cost $5 at office Depot
    wesonbass likes this.
  6. sqlb3rn


    Apr 6, 2016
    SE US
    Sounds like a major and unnecessary headache for a retired guy playing in a bar band for fun on the weekend. I like how a retired musician is getting ripped on for paying taxes on peanuts, while amazon pays 0$.
    SLIV, lbbc and wesonbass like this.
  7. But what is your marginal tax rate? Everyone has a rough enough idea of band expenses and you confirmed yours are minimal so it comes down to the tax rate. Maybe your retirement income puts you into a higher tax bracket than the average musician? QORC doesn't seem phased by your return, maybe he's up there too.

    To only end up with 30% of your musical share gross something is out of whack. Either you're a minted retiree with a thirty year old avatar pic or your tax accounting is off.
  8. two fingers

    two fingers Opinionated blowhard. But not mad about it. Gold Supporting Member

    Feb 7, 2005
    Eastern NC USA
    Your tax guy sucks.

    If you are taking out everything you paid your band members as an expense, taking out mileage, gear, strings, etc. AND setting aside 25% of what's left during the year for taxes, you should be fine.

    If you are paying more in taxes than you earned, again, your tax guy sucks.

    But, yeah, throw your band out there for private parties. Tell bar owners you charge this amount for cash and this amount for checks with 1099s.

    I pissed off one of my favorite club owners not long ago bu flatley turning him down. He wanted a "friend discount" price for the band AND to start giving us a 1099. I did that math for him and told him it wasn't worth my time. His response? "Well it ain't like you need the money. You don't play for a living or anything!" My response to him? "Hey remember when you invited me out on your big fat boat last year? Clearly, you don't need the money either. So why are you nickle and diming me?" He hung up.

    Of course, he has called me back a dozen times since then trying to get me to change my mind. He knows we draw a crowd. But I'm not budging one dollar at this point just out of spite. He's rigth. I DON'T need the money bad enough to cave to him. ;)
  9. Back of envelope calculation:

    Say expenses is 20% of gig share, leaves 80% as income.

    If 30% is left after tax on the 80% that's a 62.5% marginal income tax rate. Seems rather high or someone goofed.
    oldrocker likes this.
  10. PauFerro


    Jun 8, 2008
    United States
    I hear you on this one...I do the following:

    Make a charitable donation to my charity of choice for the amount I cleared in the band after expenses. This generates a tax deduction that zeros out the tax liability from the band liability. However, I do look at the time I invest in playing in the band as a kind of service, so that works for me. It's my way of serving humanity and having fun at the same time!

    Make sure you buy lots of equipment and enjoy it! Write off the equipment! I use the band money to feed my GAS and sheet music addiction :)

    Go for higher paying gigs so there is more left over.

    Keep track of every single expense you think you can justify.

    Whatever you do, don't insist the BL forgoes the 1099. I had someone insist on $300 for a NYE gig with no 1099 -- effectively asking me to pay his taxes. Uh-uh, no way, never been there, never done that.

    You can insist on cash only deals but it's not in compliance with tax law that says all income from all sources must be reported (notice how the SIMPLEST tax law to understand is for the benefit of the government). I think insisting on cash deals might qualify as tax avoidance , although I suspect there is probably an underground cash economy at work in America (not naiive).

    Insisting on a cash deal broadcasts to the buyer you are avoiding taxes and may jeopardize your relationship if they find a cash deal dishonest. They may even report the expense on their own taxes, which could trigger an audit of you personally even though there is no record of the transaction. This has never happened to me, but you never know what a client might do to improve their own position.

    And if you want higher paying corporate gigs I find they generally tow the line asking for your W-9, paying by cash or electronic payment, or other traceable ways. So, in insisting on cash you end up limiting your top line, another way the government mutes your success...
    Last edited: Mar 7, 2019
    Mr_Moo likes this.
  11. lbbc

    lbbc Supporting Member

    Sep 25, 2007
    Seaford , DE
    Thanks to everyone for your insights. Maybe the "band thing" for musical expression, jamming with and for friends and some extra income is a thing of the past and I should do something else (like just jamming with friends for fun). I guess "things change" is the best way to look at it.
  12. lbbc

    lbbc Supporting Member

    Sep 25, 2007
    Seaford , DE
    I'll have him recheck and the avatar is a picture from 5 years ago...but seriously, thanks for your comments.
  13. QORC


    Aug 22, 2003
    Elberon, New Jersey
    really? that sounds like a personal preference. Sorry, feel free to block me
  14. WhtMtnGrv


    Nov 1, 2015
    Burbank, CA
    Great idea!
  15. QORC


    Aug 22, 2003
    Elberon, New Jersey
    If that would make you feel better, I'm all for it! Hate to see anyone get upset here
  16. Well - right off the bat you're going to eat 15.3% for FICA/SS as an independent contractor.

    Then figure in state income taxes (4.25% for me) and federal income taxes (likely effective rate between 15% and 25%).

    I'd expect you'd be paying about 1/3 of the income out and keep about 2/3.
  17. 40Hz

    40Hz Supporting Member

    You’re only keeping a third of your gross after exemptions and credits? There’s something seriously wrong going on if you are. I’d get some professional tax planning help. If you already are getting tax help, I’d strongly suggest finding yourself a new tax person.
    lbbc and mrcbass like this.
  18. lbbc

    lbbc Supporting Member

    Sep 25, 2007
    Seaford , DE
    Unfortunately, after speaking with quite a few musicians in my area, they have experienced the same situation (and they use other "tax guys" than I did). If that's the case, live music will definitely be affected in our area.
  19. @lbbc how do your taxes compare?
    Last edited: Mar 8, 2019
  20. turf3


    Sep 26, 2011
    If your marginal tax rate is 67%, you don't need to worry.

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