Money

[BassLift]

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!

 

[ibateur]

Search is your friend here. Check the Sticky's.

 

[Slowgypsy]

You should have a chat with your friendly local accountant.

 

[jarrydee]

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

 

[Auguste]

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 . . .

 

[Slowgypsy]

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.

 

[Floyd Eye]

Quit letting bar owners pay you with a check.

 

[fdeck]

Quit letting bar owners pay you with a check.

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.

 

[Floyd Eye]

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.

 

[jive1]

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.

+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.

 

[Stewie26]

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.

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.

 

[jive1]

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.

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.

 

[zon6c-f]

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...

 

[bluewine]

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.

 

[jaywa]

Quit letting bar owners pay you with a check.

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.

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.

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.

 

[jive1]

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.

Awesome. Congrats and have fun.

 

[xgator4u]

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