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New Tax Bracket

Discussion in 'Band Management [BG]' started by TMBTC, Jun 12, 2018.

  1. TMBTC


    Oct 18, 2009
    So I'm finally making money playing music.... The band I'm playing with is giving me a 1099 whenever they pay me. Question is, do I incorporate do I do a DBA??? I can easily write off whatever I make. Just need to know what moves to make
  2. skwee


    Apr 2, 2010
    You don't necessarily need to incorporate, as you could define your musical work as self-employed/sole proprietor and still write off expenses via the Schedule C.
    elgecko, soulman969, Pacman and 9 others like this.
  3. Barisaxman

    Barisaxman Gold Supporting Member

    Aug 17, 2005
    Omaha, NE
    ^ What he said. Don't make things more complicated than necessary until/if you start making some serious profit, then it's worth looking at separating your self-employment income for tax and liability purposes. There's no perfect answer, but K.I.S.S. is a good rule of thumb in taxes as well.
    TMBTC likes this.
  4. TMBTC


    Oct 18, 2009
    Thanks gentleman. Glad it's a simple fix.
  5. Stumbo

    Stumbo Wherever you go, there you are. Supporting Member Commercial User

    Feb 11, 2008
    the Cali Intergalctic Mind Space
    Song Surgeon slow downer software- full 4 hour demo
    1099s are supposed to be given once a year with the total paid, like a W2.
    Rip Van Dan, RichardW and TMBTC like this.
  6. fourstr00


    Mar 21, 2002
    Chicago Area
    If this is going to be your only 1099 for the year, you can also avoid filing a schedule C by listing the income as incidental hobby income.
    TMBTC and Bunk McNulty like this.
  7. sigterm

    sigterm ;) ;) ;), love y'all Supporting Member

    Feb 5, 2003
    Atlanta G of A
    Before going the hobby route plan your future expense (GAS and gas) and profit and consult a CPA rather than the internet. There are advantages to both that may not be apparent immediately.
    InhumanResource, TMBTC and nice_hat like this.
  8. turf3


    Sep 26, 2011
    I'm not a tax preparer but I think that when I used to get 1099s I just listed the income under "misc. income" and never got an inquiry. I suppose there's probably a limit to "misc. income" above which you have to fill out a schedule.
  9. jumbodbassman

    jumbodbassman Supporting Member

    Dec 28, 2009
    Stuck in traffic -NY & CT
    Born Again Tubey
    schedule c if you need to right off some deductions. which you should if the 1099's are enough to effect your taxes enough to care......

    band should get a 1099 from each venue not each gig. so you should get either one for the whole year or each venue not each gig
  10. RichSnyder

    RichSnyder Supporting Member

    Jun 19, 2003
    Columbia, Md
    And from the subject, don’t worry about the next tax bracket. If you do go into a new bracket, it’s just for the amount over the bracket cutoff, not your entire income. That’s a common misconception - people fear that earning another $2k (or whatever) will raise all of their taxable income. Not so. You could miss certain tax credits by exceeding certain thresholds, however.
  11. JKos


    Oct 26, 2010
    Torrance, CA
    This most certainly varies by state w.r.t. state taxes.

    - John
  12. RichSnyder

    RichSnyder Supporting Member

    Jun 19, 2003
    Columbia, Md
  13. I wouldn't turn poopie in. I think irs dips their fingers in my money enough as it is..
  14. Biggbass


    Dec 14, 2011
    Planet Earth
    Question: why are they not giving you just a single 1099 at the end of the year?
    Are you an 'employee' of the band? Is the band receiving 1099s from venues, promoters, event coordinators, or municipalities?

    If you incorporate you may be able to lock in at a lower taxation rate but that depends on your annual income and current tax bracket. You may already be below the corporate rate.
    Where we are, a registered DBA comes with having to pay annual county taxes on inventory. Not so with a corporation or as an individual.
    Sometimes it's best just to stay under the radar and keep doing what you've been doing, what has worked for you so far. Just report the earnings that come in as 1099 money and pay the taxes on them per your current bracket/rate (after all deductions of course).

    PS: Highly recommend that you speak with a CPA, preferably someone who has experience working with musicians or other categories of talent.
  15. RichardW


    Feb 25, 2016
    near Philly
    like @Stumbo said, you should get one 1099 for the entire year that tallies your music income. Getting one every time you get paid is ridiculous.
  16. BEADG63

    BEADG63 Supporting Member

    Jul 7, 2015
    Buffalo, NY
    Unfortunately, your SSN is on the 1099, so you will be paying tax on the poopie. OP, Save all your receipts for everything (travel expenses, tolls, strings, whatever) and use them to cut your tax liability. You can usually show enough expense to write off most if not all of that income.
    instrumentlevel likes this.
  17. "writing off" equipment and expenses might be a thing of the past. With the new Trump tax bill the standard personal deduction has been raised to a point where unless your write-offs are massive, you're probably going to take the standard deduction and be better off.
  18. Stumbo

    Stumbo Wherever you go, there you are. Supporting Member Commercial User

    Feb 11, 2008
    the Cali Intergalctic Mind Space
    Song Surgeon slow downer software- full 4 hour demo
    By issuing a 1099 for each gig, it looks like they're using it as an accounting method.

    Instead of keeping books, they keep envelops filled with 1099s, receipts and paperwork which get organized and totaled at the end of the year for tax purposes. Or maybe their accountant does it.
  19. Beetfarm615


    Feb 15, 2017
    Darn I can’t justify my gear purchases as tax write offs to my wife anymore?!
  20. 2F/2F


    May 26, 2009
    Los Angeles, CA
    1099 means you are self employed – an "independent contractor." No need to form an "official" business.

    What you do need to do is strictly set aside about 15 or 20 percent from each 1099'd payment you receive, and put it in a savings account (or wherever else you think is best). That is your tax fund – the 1099 equivalent of having taxes taken out of your W-2 pay. When you file, you pay your taxes from that fund, and the rest can be considered your tax refund, and moved back into your checking. Because of the fact that you will claim a bunch of deductions against your 1099 income when you file, if you do this strictly every payment you receive, then you *will* get a "refund" from yourself. (Though if you are making a ton of money on 1099, then you should set aside a higher percentage than the 15–20 percent.)

    Something else to be aware of is that after enough time making all your money as an independent contractor, the IRS is going to want you to start paying your taxes quarterly instead of yearly. I was able to avoid this by also having some W-2 income.
    instrumentlevel and sigterm like this.

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