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How Do You Get Paid When Paid By Check?

Discussion in 'Band Management [BG]' started by Bassmanbob, Jan 4, 2006.

  1. Bassmanbob

    Bassmanbob Supporting Member

    Usually, we have separate checks for each member of the band, but we are beginning to have problems with that because we are now a 9 piece band. Most corporations don't want the hastle of writing 9 checks plus the sound. Do you guys have a checking account? If you do, how do you set up the band association or corporation so you don't get into trouble with the IRS?

    If one guy gets the check, he usually pays us individually. The problem with that is he will have to pay a lot of taxes on that at the end of the year. It hasn't been a problem for us in the past, but we are getting busier and we are getting concerned.

    Thanks in advance,

  2. Each band member should invoice the leader and then sign a receipt for the money. Then, the leader (or whoever looks after the money) can show the IRS the invoices and receipts.
  3. Bassmanbob

    Bassmanbob Supporting Member

    That may fly in New Zealand, but does anyone know if it's OK here in the US?
  4. FriscoBassAce


    Dec 29, 2004
    Frisco, Texas
    Independent Manufacturers Representative
    We talked about this very situation in my band. My guitarist's father was a bluegrass entertainer in Tennessee for many years. He was always the leader of the band and was the person who received the money from the clubs and bars and then distributed it to the band members. He wasn't on top of things and never claimed the money that wasn't his share to the IRS. They came for him and he wound up being in severe debt for many years.

    After that, they set up the band as a business, and paid everyone after each gig like a sub-contractor. At the end of the year, each musician received a 1099 form and then filed it on their income taxes.

    I would be interested to hear from some of the attorneys on this website about what would be the best way to handle this from a business standpoint. Should it be a corporation? Partnership? DBA?
  5. JimmyM


    Apr 11, 2005
    Apopka, FL
    Endorsing: Ampeg Amps, EMG Pickups
    You can make it a sole proprietorship, a DBA, a corporation with multiple partners, pretty much anything you want as long as the IRS gets their money. The way I do it is I file 1099's on everyone who makes more than $600 in a year through me. Likewise, I get 1099's from the people who pay me.

    As long as there's a paper trail and the IRS gets all their money coming to them, they really don't care.
  6. Mr. Pitiful

    Mr. Pitiful

    Jan 22, 2003
    Fargo ND
    You can do it a couple of different ways. We usually request that the bar pay us in cash. They still write out a check to the band for records, but then someone from the band signs the back of the check and they cash it for your right there.
    The second way is to have one of the people in your band add on the band name to his savings or checking account. That way, the check is still made out to the band, but that one person can cash it at his bank.
    We use both of these methods and it works well as long as the person with the acount doesnt mind writing out checks to everyone. Otherwise everyone can just wait untill he/she cashes it and can pay them in cash.

    Mr. Pitiful
  7. theshadow2001


    Jun 17, 2004
    Thats what my band does. You see people paying in both cash and cheque which is a good way to do things (from a tax point of view) You might recieve one half in cash the other in cheque. That way you don't have as much to declare and the bar has something to put through the books as well. Then just sign the back and cash the cheque. Most of our gigs is just straight cash though. Although we fear the tax man might soon cometh.