I’m a CPA. AMA!

Discussion in 'Band Management [BG]' started by Greenman72, Mar 3, 2024.

  1. Greenman72

    Greenman72

    May 16, 2023
    This is a response to the “what should by bandmates and I do” thread, and the very first response was “get a CPA”.

    I am an expert CPA and CFA, and a very bad rookie bassist. I will gladly trade my knowledge for yours (within reason, of course).
     
  2. sean_on_bass

    sean_on_bass

    Dec 29, 2005
    USA
    Do you think a small time band needs a CPA? Is the complexity really there?
     
  3. Sean150

    Sean150

    Jul 18, 2018
    They are a CPA, of course they think it’s necessary.

    But truth be told, if a band is bringing in any significant amount of money it would probably be to their benefit to figure out what benefits and deductions can be applied to minimize the tax payable (The details start getting really complicated at this point). If the band is making a couple hundred dollars a gig it is better to just claim the full amount as income and pay tax on it. The cost will be less than paying an accountant.

    Also, be wary of taking any tax advice from a random on the internet. Tax laws vary by jurisdiction and are very complicated. A CPA who works for a the GL team at a major corporation likely knows very little about tax law.
     
  4. skycruiser

    skycruiser

    Jan 15, 2019
    Because everyone only offers manipulative advice that's works in their own self interest. (sarcasm)
     
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  5. dbsfgyd1

    dbsfgyd1

    Jun 11, 2012
    Mascoutah, IL
    You actually have time for playing music this time of year??? LOL!!!
     
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  6. Sean150

    Sean150

    Jul 18, 2018
    It was half a joke. But there is a concept behind it. It’s called a perceived conflict of interest and it doesn’t matter if it’s true or not (hence perceived). It’s a big deal in the accounting adjacent fields that I deal with. They might or might not be acting in his own self interest, but one shouldn’t assume that they aren’t. It could also be that, based on the code of ethics that accounts should follow, he couldn’t and probably shouldn’t provide any generic advice.

    Also, I can’t edit my original comment buy it should have said it is “Likely” better to claim the amount as income because you generally wouldn’t be penalized for paying too much tax.
     
  7. Coincidentally, I know a professional bass player who had a successful music career and is also a CPA.
     
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  8. Coldmilk

    Coldmilk

    Jun 13, 2011
    San Diego
    What’s the best bass for a tax write-off?
     
  9. The most expensive one you can afford ;)
     
  10. Should the drummer be a CPA as well?
     
  11. Micha84

    Micha84

    Jul 11, 2021
    What is a CPA?

    Nevermind. Maybe it's common knowledge in the US, for everybody else who was confused like me, this is what Google comes up with:
    "A Certified Public Accountant (CPA) is a trusted accounting professional who has gone through a rigorous exam process. They have completed and mastered the three branches required for this accounting license, which are education, experience, and exam."
     
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  12. Five or Six

    Five or Six

    Jun 21, 2022
    West Michigan
    I don't think it matters what you do for a living and play bass. I am a very successful bass player and my professional day job (retired now) never interfered. When I toured for 3 years that's all I did. When I stopped I needed a real job of my choice.
     
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  13. Clark W

    Clark W Just Say No To Tort! Supporting Member

    Aug 26, 2018
    Does the IRS allow for a bigger write off on rounds or flats? Rounds wear out quicker so they should devalue faster.

    And what about anti tort laws? How does that affect me? Can I write off replacing a tort pickguard for the purpose of avoiding anti tort laws?

    :laugh::laugh::laugh:
     
  14. Goatrope

    Goatrope

    Nov 18, 2011
    Sarasota Florida
    What would you say is the gross income level where a band ought to incorporate into a single business vs pay individual taxes, with the intent being to pay the least amount.
     
  15. BobDeRosa

    BobDeRosa Supporting Member Commercial User

    May 16, 2012
    Finger Lakes area of New York State
    Owner, Tritone Jazz Fantasy Camps
    They call your business a "practice" for a reason. Let that nomenclature be your guide to becoming a better bassist -- practice, practice, practice.
     
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  16. Greenman72

    Greenman72

    May 16, 2023
    Depends on the situation and what constitutes a "small time band". (Note - never played in a band myself.)

    The best thing to do would be to create some kind of entity (probably an LLC) and put all the income/expenses into the LLC and distribute profits periodically. That accomplishes a few things:
    1. It makes itemizing the income/expenses easier,
    2. It allows for cool legal "stuff" to happen. So if you had, say, a drummer that was cool, and you wanted to play with him and pay him, but not give him any ownership of the LLC, you could do that. He would have no say in the LLC or the administrative direction of the band.
    3. It allows the tax burden to be shared proportionally. Otherwise, the person who receives the income will have to bear the tax burden. (i.e. the 1099 will be in some person's name, not the band name)

    This would be the ideal situation. Whether it's cost-effective is up to you. But sometimes it's worth it to pay somebody else to deal with all these things before they become problems.
     
  17. Greenman72

    Greenman72

    May 16, 2023
    The best tax write-off for a bassist is the same for pretty much anybody else: CPA advisory fees.
     
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  18. Greenman72

    Greenman72

    May 16, 2023
    Don't think gross income factors into it. The question is--who's going to deal with all the nonsense? Who's going to do all the bookkeeping and tax preparation? Who'd going to defend you against the IRS? How are you going to protect yourself (both individually and in the aggregate) from liabilities? Who's going to give you a full and proper accounting of your financial situation without screwing you over? Who can you (and all of your bandmates) trust to give them an honest answer?

    You can deal with all these problems yourself, or you can pay someone else to deal with it. Some people prefer to DIY, and some prefer to hire it out. YMMV.
     
    Last edited: Mar 4, 2024
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  19. Greenman72

    Greenman72

    May 16, 2023
    Agree about taking advice from a rando on the internet. As always, do your own due diligence.
    However, I actually run a CPA firm that handles small business accounting and taxation. This is right up my alley--with one caveat.

    I live in the great state of Texas where there is no state income tax. (So don't ask me about state income taxes.) God bless Texas!
     
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  20. Reedt2000

    Reedt2000 Supporting Member

    Apr 26, 2017
    Central New Jersey
    You're a Certified Public Accountant, against medical advice?

    :smug:
     
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