nutdog said:
Here's the point. I've spent 20 years in the financial services industry. I minored in accounting. There are ways around the issue you think exists. I see people deal with this issue every day.
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- Thread starter bluewine
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Here's the point. I've spent 20 years in the financial services industry. I minored in accounting. There are ways around the issue you think exists. I see people deal with this issue every day.
This reminds me of the guy interviewing 3 people to be his accountant. At the end of each interview he asked one final question: What's two plus two?
The first guy said 2. The second guy said 2. The third said "What do you want it to be?". He got he job.
- Jun 3, 2009
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- Disclosures
- Bassgearu, Music Industry Consulting and Sales. Tech 21, NBE Corp, Sonosphere.
In your hands it seems like a wash. But actually, no. Ask any accountant. I get paid, on paper. I can do all the regular voodoo a business can with expenses and profit. Then, I turn around and make a donation. Comes off the books in a different spot. Net is actually better then a wash even though my hand and pocket don't see anything.
I've been audited my share of times, mostly because a few years I hit an income threshold that they just loved to delve into. Came out fine.
There are a ton of other things that will screw you with the IRS. This one is not one of them.
I'm honest, so most of the time things are fine. Everyone, including an accountant, will make mistakes. The mistakes you want him to make are ones that will end in your favor.
I've been audited my share of times, mostly because a few years I hit an income threshold that they just loved to delve into. Came out fine.
There are a ton of other things that will screw you with the IRS. This one is not one of them.
I'm honest, so most of the time things are fine. Everyone, including an accountant, will make mistakes. The mistakes you want him to make are ones that will end in your favor.
Tom, thanks for sharing your direct experience. I'm not sure why some want to continue to deny that this is possible.
I'm not denying it's possible, just trying to understand how it's done. I'd like to just take your word for it, but the financial services industry doesn't have the most stellar reputation these days.
And I now believe I understand TR is reporting the income, expensing costs incurred, if that's what is meant by voodoo, then deducting a donation. Which in my mind is writing off costs, not taking a deduction for a donation of income that was never received.
Perhaps this is what you were saying all along. Or perhaps not.
I'm not denying it's possible, just trying to understand how it's done. I'd like to just take your word for it, but the financial services industry doesn't have the most stellar reputation these days.
And I now believe I understand TR is reporting the income, expensing costs incurred, if that's what is meant by voodoo, then deducting a donation. Which in my mind is writing off costs, not taking a deduction for a donation of income that was never received.
Perhaps this is what you were saying all along. Or perhaps not.
Yep. Just that simple.
Yes, I agree it is, but as you can see, the post I first responded to was not clear. Getting "full rate" and donating it back, no problem. Expenses and costs, no problem. "and the performance itself," -- problem.
We played the benefit last night. No free drinks (But plenty of people bought me shots) but they raised a fair amount of money to help the family of the kid with cancer.
All in all, I had a great time. It was a very local type event, and I got to schmooze with a good portion of the many bass players that are better than me around here.
I caught a little buzz, got home a little late, got up a little too early, but I'm happy I did it.
All in all, I had a great time. It was a very local type event, and I got to schmooze with a good portion of the many bass players that are better than me around here.
I caught a little buzz, got home a little late, got up a little too early, but I'm happy I did it.
Classic!
Thats really cool that your band and yourself took the time to help out a child and family in need- Kudo's
There is a lot of mis information flying around in this thread. I strongly advise everyone to seek real professional advice from an experienced CPA ( or your local equivalent).
And most importantly not to give out advice even if you think you understand, and even if you think you understand what your CPA has explained.
The only advice I would give is document everything, every receipt or expenditure, and every piece of income whether "donated" or not and give it to a CPA and go over it with the CPA so they understand what has occurred and then report it properly.
One could make a good living representing all the audits as a result of this thread.
Even if you win an audit you loose, they are very expensive and suck up all of management's time and resources.
I am not trying to pick a fight with anyone, but this is actually more complicated than music theory, and making a mistake here is much more serious.
And most importantly not to give out advice even if you think you understand, and even if you think you understand what your CPA has explained.
The only advice I would give is document everything, every receipt or expenditure, and every piece of income whether "donated" or not and give it to a CPA and go over it with the CPA so they understand what has occurred and then report it properly.
One could make a good living representing all the audits as a result of this thread.
Even if you win an audit you loose, they are very expensive and suck up all of management's time and resources.
I am not trying to pick a fight with anyone, but this is actually more complicated than music theory, and making a mistake here is much more serious.
Very valid points. Your services and expenses have a dollar value. However, where things begin to get called into question is here: are you playing the gig for a registered charity?
There are plenty of benefit gigs. But there's a big difference between an informal benefit for someone who may be well deserving of contributions, and an actual registered charity that has legal standing for tax exemptions.
A registered charity will have tax ID codes (and paperwork) whereby the IRS will track the financial transactions of the charity and their donors. This is the kind of territory where you would need to consult with a CPA. Because not all benefits are created equal.
Despite your 20 years experience with a minor I didn't find your posts helpful at all. Just somewhat insulting and condescending, with nothing in the way of clarification or explanation. My best to you as well.
- Jun 3, 2009
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- Bassgearu, Music Industry Consulting and Sales. Tech 21, NBE Corp, Sonosphere.
You got it. Like I said, I have a good accountant. I think there are a lot of people here who may have gotten bitten by either a bad one or because they didn't have one.
I treat Tom Richards and LIX as a business, as they are ones. Sometimes its hard for people to get their heads around it all.
The charity and I have a zero sum cash transaction face to face. On paper they have and expense and I have an expense. They can account for their expense against "profits" on paper, which can help them from some perspectives. I can account for a donation. Helps me on my taxes in some ways.
Yes, you have to be careful and make sure the charity you agree to do is in the proper tax status.
I do not put everything in this perspective, as you pointed out there are some bennies we all do for free because we love the people or the cause. I do the same. I use my analysis when I am contacted by faceless charities and bennies that I am not nor have ever been involved with.
If my friend is sick and needs medical bills paid, I donate money and time. If the John's Left Footed four toed Society contacts me, I start the analysis. If both financially and intellectually it works, I'll do it. I'll let my CPA handle the paper trail.
Like everything else, and as said here, get yourselves an accountant and discuss all these things. These threads are all generalizations. Heck, I don't even take my own advice here sometimes....
- Jun 3, 2009
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- Disclosures
- Bassgearu, Music Industry Consulting and Sales. Tech 21, NBE Corp, Sonosphere.
I didn't even think it would last this long. My comments were to provide some people the perspective I have in determining whether a basic benefit is worth playing. Didn't realize this would become a thread for IRS tax lawyers to troll....hehehehehehehe.
The IRS will always find ways to get more out of you. Having a good CPA working with you really helps. As we all have heard those "greedy corporations" don't pay as much tax as some would want them to. Why? Because they have killer accountants who understand the rules and know how to take advantage of them.
Even the IRS isn't sure in some areas. I pretty much gave up calling the IRS hotlines to answer questions because they start with a disclaimer that says, "the answer you receive may not be accurate..." That sure tells you something. Call the IRS hotline and the answer they provide, as the governing agency, may not be accurate. So then why have the hotline?
I think overall its time for us all to move on from this thread. I know I am...
