Rehearsal Hosts?

[mrcbass]

Based on some experience, I'd tell you it's probably not worth it. The math just doesn't work out - if you are paying $3500/year for electricity (which is YIKES high, even in the central valley) and can justify 2% of the usage is because of band practices (which is a bit high - that's 3.5 hours of your total weekly usage) and you're looking at $70.

I'm coming to the same conclusion. I don't pay near that much in electricity annually - less than a third of that - so, yeah probably not worth the bother.

I guess the answer to my question "Does anybody do this?" is mostly "No".

Thanks all.

 

[chupacerveza]

You might be able to sell that electricity to your band mates, but don’t expect the IRS to buy it.

 

[Coolhandjjl]

1) OP, do a google search on, "S corp vs LLC".

2) When the sound company started getting out of hand, I went to one of them CPA things. When the guy found out I was in the entertainment business he had question after question about it and fawned all over me like I was some kind of celebrity, or something. All of a sudden we were best of friends. Until I got the bill for 2 hours at $300 / hour, that is! Beware.

Mechanics start at $70/hr.
IT services between $115 and $175/hr.

Two hours of anything will never be free. Now-a-days, one can usually expect no more than a 3~5 minute phone chat with an accountant or attorney before you are urged to come in. They are, after all, in the business of charging for their time.

I was at one attorneys, and they charge 1/2 rate for up to 1/2 hour of initial consultation before you decide if you want to proceed with retaining them. At the end, they whip out a portable cc card swiper.

 

[EatS1stBassist]

I too need to write off the electricity I use to grow the weed that my bandmates smoke during rehearsals.

There it is!

 

[dbsfgyd1]

I track and write off mileage when I go elsewhere for rehearsals. I'm currently hosting our rehearsals (so we have AC!) and am wondering if/how others find a way to establish an appropriate value of doing this. I'm not going to go down the path of pro-rating my mortgage or anything like that (even though my living room is more studio than living room these days), but I do use considerably more electricity when hosting rehearsals (mostly because the AC is running much harder than if I'm home alone), but also in lighting and other little stuff. It's not a huge amount, but since this is treated like a small business for tax purposes, it seems like I should be able to account for this on my tax deductions.

Appreciate any thoughts on this. Thanks

Consult your accountant first if you are tempted to use this as a business deduction.

 

[buldog5151bass]

I've never done this, but if you want to claim that you are renting rehearsal space to your business, then you would count it as an expense to your business and income to you, which would defeat the purpose. Then only way I know to claim utilities is if you claim a home office by setting aside a space EXCLUSIVELY for rehearsal space (not just one day or even a few days a year). It must be used solely for business and can't double as your living room/guest room, or whatever. Doesn't sound like it fits your scenario.

(And no, you don't have to be an LLC to claim a business for federal taxes).

This.

 

[Downunderwonder]

I would just be grateful that I didn't have to commute and call it even.

this from the band side. What they spend on travel is surely mamy times your a/c bump.

It's too much freakin' work

truth, at least here in NZ. My accountant told me to conveniently forget about returning on music income / expenses as IRD weren't interested in the piddly amounts involved. If I was playing out every weekend it might be different.

 

[Joebarnes]

I host rehearsals at my house - I run an A/C unit in the summer and a heater in the winter (in a garage, so separate from the house system). I will be honest with you - I have not seen any measurable increase in my electricity as a result of the heating/cooling nor due to the amplifiers running for 2-3 hours. It might cost me an extra buck a month but I doubt it, but my wife will crank the heat to 24 or 25 Celsius in the winter because she's 'cold' and I sure notice the cost of that far more than my band's usage lol. I would be surprised if you found it was enough power usage to be worth a write off.

 

[Nevada Pete]

Mechanics start at $70/hr.
IT services between $115 and $175/hr.

Two hours of anything will never be free. Now-a-days, one can usually expect no more than a 3~5 minute phone chat with an accountant or attorney before you are urged to come in. They are, after all, in the business of charging for their time.

I was at one attorneys, and they charge 1/2 rate for up to 1/2 hour of initial consultation before you decide if you want to proceed with retaining them. At the end, they whip out a portable cc card swiper.

I whole heatedly totally agree with everything you say, of course. I myself had a reputation for being more expensive than my competitors. The difference from my little story was that I always delivered more than the client bargained for in every way I could think of. That's why I wound up working for the big acts on the big stages.

I must not have made it clear that in the case I described, the guy did not provide any CPA advise whatsoever throughout my meeting with him even though I tried to shift the conversation to how I was supposed to deal with all the money I was making over and over again. I found someone else, and the lesson to be wary was not lost on me. And no, I didn't pay that guy's crummy bill either. When I mentioned the State Board of Accountancy (once I finally got through to him) he agreed I didn't owe him any money. But that kind of recovery tactic may not be as effective as it once was.

These days, white collar / professional misconduct appears to be worse than it ever was. I've seen it with my own two eyes in various matters I have been involved with. I just spent the entire morning today battling it out and exchanging faxes / emails with certain individuals at a certain business enterprise here in sunny Las Vegas, Nevada to eventually get them to do what they said they were going to do. Here's an article that highlights what I'm talking about. This particular article is about the legal profession in California, but it offers insight into the problem which extends to many other areas of business conduct today:

Column: The California State Bar's dismal history shows why it should be broken up

All I'm saying is don't take anything for granted, people. Find someone who is impeccably honest to assist you with any CPA needs you may have. They're out there. But you have to take the time to shop around. Make sure you find someone you can trust. You will find the more you know, the more they know. Remember, what the tradesmen say applies to many situations. That is: Measure twice. Cut once. Good luck!

[Edit Note: Enrolled Agents can most often provide the services you will need to manage an "S" corp or an "LLC", and save you some $$$$. Maybe a lot of cash.]

 

[Hand slap]

I track and write off mileage when I go elsewhere for rehearsals. I'm currently hosting our rehearsals (so we have AC!) and am wondering if/how others find a way to establish an appropriate value of doing this. I'm not going to go down the path of pro-rating my mortgage or anything like that (even though my living room is more studio than living room these days), but I do use considerably more electricity when hosting rehearsals (mostly because the AC is running much harder than if I'm home alone), but also in lighting and other little stuff. It's not a huge amount, but since this is treated like a small business for tax purposes, it seems like I should be able to account for this on my tax deductions.

Appreciate any thoughts on this. Thanks

Probably splitting hairs?

 

[trevcda]

I would also warn everybody considering turning their hobby into a business with an S-Corp, LLC or incorporating, to thoroughly investigate all of the implications involved. Doing so will make it difficult to undo many of the requirements and you run the risk of putting your business under much closer scrutiny. Again, professional advise is what you need. A couple of decades ago, I opened a dumb bank account in my bands name. From city to federal, they all came out of the woodwork looking for their piece of the pie. In hindsight, it was a bad idea. Your jurisdiction and needs will likely be different, but go into this with your eyes wide open.

 

[DavC]

treat your music space ( full time , 24/7 ) like a Home Office ... deduct home expenses for that space = % ..

if you only have practice there occasionally ... as stated before - folks must bring beer .!

 

[Downunderwonder]

Google says a human puts out 100W. X4 bandmembers 400W extra for your A/C to deal to @50%?? efficiency 800w of electrical power for 3hrs = 2.4kWhr @ $1/kWhr?? makes $2.40 per session. Plus amps, I sure hope they are SMPS or they are gonna add something like that again. Still way ahead of commuting.

 

[FenderB]

Appreciate any thoughts on this. Thanks[/QUOTE]

If your not running this by a CPA expect a visit from the IRS in the future, they'll help you straighten it all out.

 

[LBS-bass]

I would also warn everybody considering turning their hobby into a business with an S-Corp, LLC or incorporating, to thoroughly investigate all of the implications involved. Doing so will make it difficult to undo many of the requirements and you run the risk of putting your business under much closer scrutiny. Again, professional advise is what you need. A couple of decades ago, I opened a dumb bank account in my bands name. From city to federal, they all came out of the woodwork looking for their piece of the pie. In hindsight, it was a bad idea. Your jurisdiction and needs will likely be different, but go into this with your eyes wide open.

This, in spades. I have an LLC which I started just after I retired from my university job. I don't do work under the LLC anymore, but I'm still required to pay quarterly taxes on it until I manage to get around to shutting it down. There are many fees associate with being in business and you will pay money for the privilege of filing as an LLC. It may well be that the juice is not worth the squeeze.

 

[Cutter8]

Yes, there is a “formula” for calculating the expense, but it’s really only applicable and safe to take the deduction if you are using a space in your house that is dedicated to the business activity in question (i.e., if you have a home studio/music room, not if you are occasionally setting up in the living room to rehearse).

 

[N4860]

I'm coming to the same conclusion. I don't pay near that much in electricity annually - less than a third of that - so, yeah probably not worth the bother.

I guess the answer to my question "Does anybody do this?" is mostly "No".

Thanks all.

I feel like anyone that would feel like going to the trouble of tracking and reporting these kind of minimal expenses isn't properly valuing their own time. People get all shocked when they hear the hourly rates of mechanics or lawyers and other professionals, but it goes both ways. I have a value I can assign to my own time and I certainly wouldn't waste it on making tax claims for the electricity used at a band practice for a few hours. Like you've got to be talking about a few dollars per band practice. My house regularly runs at less than $0.05 per hour of electricity, even with the AC going.

Edit: just checked my meter and I'm running at $0.08 per hour so a bit more but that's probably due to the cpu and bass gear running right now. So maybe for a rehearsal it would get closer to $0.20 per hour?

 

[THE SAW]

I understand your question. Limit the rehearsal to 2 1/2 hours, take a 10 minute break after 1 1/2 hours, get your work done and everyone goes home.

Those are your house rules......

 

[PillO]

I track and write off mileage when I go elsewhere for rehearsals. I'm currently hosting our rehearsals (so we have AC!) and am wondering if/how others find a way to establish an appropriate value of doing this. I'm not going to go down the path of pro-rating my mortgage or anything like that (even though my living room is more studio than living room these days), but I do use considerably more electricity when hosting rehearsals (mostly because the AC is running much harder than if I'm home alone), but also in lighting and other little stuff. It's not a huge amount, but since this is treated like a small business for tax purposes, it seems like I should be able to account for this on my tax deductions.

Appreciate any thoughts on this. Thanks

Normally, I advise against taking medical advice from strangers on the internet. In this case I will advise against taking tax and accounting advice form strangers on the internet.

 

[getbent]

Tax considerations aside, I don't like hosting rehearsals because our leader sucks hard at "reading the room" and seeing that everyone is leaving/has left, "the hang" has run its course, and I want to go to bed.

C'mon, it's your house, tell him to leave. This isn't rocket science or Emily Post @ a fancy dinner party.