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Money

Discussion in 'Band Management [BG]' started by BassLift, Jul 21, 2012.


  1. BassLift

    BassLift

    May 3, 2011
    Boulder, CO
    My band has been gigging for about 4 months, we've played about 18 shows in that time and the last few gigs have paid us in checks. I'm basically in charge of handling the finances for the band but am not quite sure how to turn it into a legitimate business. I opened a band bank account to make it somewhat easier to manage things, but i'm not sure how to then address taxes, expenses and ultimately paying myself and the guys for the work we do. Any tips on the matter would be greatly appreciated!
     
  2. Search is your friend here. Check the Sticky's.
     
  3. Slowgypsy

    Slowgypsy 4 Fretless Strings

    Dec 12, 2006
    NY & MA
    You should have a chat with your friendly local accountant.
     
  4. jarrydee

    jarrydee

    Oct 22, 2011
    Michigan
    my old band did this. GO find an accountant and get a tax ID number, thats where you start, make it a corporation!
     
  5. Auguste

    Auguste

    Apr 5, 2012
    Get receipts from all you equipment and enter as owner equity / equipment . . . Which you can then depreciate

    Save every receipt including travel and meals . . . Anything related to gigs and practices

    Keep a detailed log of all gigs and rehearsals etc to justify travel and meal expenses

    Look at the different corporate structures, some need far more reporting to IRS / Revenue Canada than do other corporate structures

    Take a basic . . . 24 hr accounting course so you understand the basics

    Depending on corporate structure you need to establish how revenue is to be distributed

    That's a start to consider


    @ @ @ @

    Learn the terminology . . . There is a lot of misinformation being tossed around.

    A recent example is the use of ROI which is return on investment . . . It has to do with how much money you will earn from you $ investment and not time spent practicing . . .
     
  6. Slowgypsy

    Slowgypsy 4 Fretless Strings

    Dec 12, 2006
    NY & MA
    NFN... but you're getting bad advice from some of the posters here when they suggest you form a corporation. Limited partnership would be a simpler, less paperwork intensive path.

    Chat with your friendly local accountant. Best chat on this topic you'll ever have.
     
  7. Floyd Eye

    Floyd Eye Banned

    Feb 21, 2010
    St. Louis
    Quit letting bar owners pay you with a check.
     
  8. fdeck

    fdeck Supporting Member Commercial User

    Mar 20, 2004
    Madison WI
    HPF Technology LLC
    Very few bars pay with cash any more.

    Note that I'm not an accountant or a lawyer. I suggest that unless there is a reason for a complex business structure, a better approach is "every man for himself."

    1. Keep detailed records of income and expenses.

    2. Don't pay anybody cash. Paying people by check creates a record of the expense. That means you will be writing some checks at the end of every gig.

    3. Get social security numbers and send out 1099's properly. How your band mates manage their tax returns is their own business.

    4. File your own Schedule C based on the accurate records that you have kept.
     
  9. Floyd Eye

    Floyd Eye Banned

    Feb 21, 2010
    St. Louis
    I guess maybe it depends on your location because I have been gigging steadily for a very long time and I've never had any club owners try to pay us with a check.
     
  10. jive1

    jive1 Commercial User

    Jan 16, 2003
    Alexandria,VA
    Owner/Retailer: Jive Sound
    +1

    For most bands, there is no advantage to incorporating vs forming an LLC. There's paperwork involved with a corporation, and it has to be done yearly. You have articles of incorporation, shareholder meetings, meeting minutes, shareholder votes, etc. which for most bands is just extra work and expense that gives you no advantage. You're also double taxed, which means you have to file for your corporation and yourself, and pay taxes for both. All this is pretty much useless for a band playing a handful of gigs a year. Where a corporation does have an advantage is that it can go public. But, how many bands are looking to sell shares of stock?

    The question to ask is why do you want to set up a certain business structure? If it's to limit liability, you can form an LLC and protect your personal assets with much less paperwork. If it's to take tax deductions for band expenses, you don't need a business structure. If you want checks written out to you band's name, you just need a DBA.

    But to incorporate without giving thought as to why could potentially waste alot of your time and money. IMO, LLCs are easier to manage and suitable for most bands and small businesses.
     
  11. Stewie26

    Stewie26 Supporting Member

    Probably 4 out 5 times we get paid with a check.
    The club owner wants to have proof for the IRS that they paid XXX for entertainment on that day. If they pay in cash, they may have a hard time showing the cost of the band as a business expense.
     
  12. jive1

    jive1 Commercial User

    Jan 16, 2003
    Alexandria,VA
    Owner/Retailer: Jive Sound
    You can always write a receipt for the owner if they pay cash. I've done that before.

    You can also sign and cash the check at the bar. They have a record, and you get cash. They used to do it alot more in the past, but I just did a gig where they paid that way.
     
  13. Jive1...After a loooooong hiatus, I have[ finally] joined a working/paying band. First gig is Saturday: Outdoors "good-ol-country girls and boys gettin down on the farm" -type event in Manchester, Ga. 3 bands..we are middle. Am told that,
    " it has never rained-out at this event"..fingers crossed.

    [ MAYBE THE REST IS MORE IN LINE AND NOT HIJACKING

    Band is booked for rest of the year; weekends only, which is great. Am told that [with one exception] we get paid in cash.
    I reponded favorably; don't mind paying taxes and buying new equipment to offset any taxes.

    ALL: Should I save gas receipts? Rehearsal is over 40 miles round trip @ once or twice/per week. Almost all gigs are waaaaaay out. First Gig is over 100 miles round trip [ take home is expected to be @ $100. Minus $30 for gas[ I drive a guzzler, which is paid for] nets $70 in my math. With gas prices in Georgia fluctuating weekly: currently @$3.65 for Regular.

    Maybe some gigs we can car-pool, but these guys drink like fish...

    Thanks in advance...
     
  14. bluewine

    bluewine Banned

    Sep 4, 2008
    WI
    Not sure on my position on cash vs check. Most of the time my band is paid in cash.

    But it's a good idea to keep records, I realized when all of a sudden I had all this extra cash coming in from gigs, that I would have to report it and pay taxes on it.
     
  15. jaywa

    jaywa

    May 5, 2008
    Iowa City, IA
    Agreed.

    I really, really do not like getting paid via check but sometimes there's no choice. For example the last two years my band has played a fundraising party tied to a local university. It's a great gig (early/short hours, catered meal included, a short drive and good pay), but because it is a state university there is a whole long protocol involved for getting paid. Last year it took 6 weeks from the time our band played their function till when the check was in our BL's hand. Thankfully he was willing and able to front the cash to the band members (which some BLs wouldn't do), so we all got paid cash the night of the gig but he had to wait a long time for his.

    I haven't handled the business end of the last two bands I've been in... and my current band doesn't play many bar gigs anymore... but as I understand it this is still pretty much standard operating procedure in these parts.
     
  16. jive1

    jive1 Commercial User

    Jan 16, 2003
    Alexandria,VA
    Owner/Retailer: Jive Sound
    Awesome. Congrats and have fun.
     
  17. Checks= paper trail. This means you will have to claim it as income, and pay taxes on it.
    Cash= No paper trail, Claim it or not as your ethics indicate.

    Checks, if they are made out in your name, YOU are responsible for taxes.

    Checks BOUNCE
     

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