Tax Forms for cover bands?

Discussion in 'Band Management [BG]' started by pglaser01, Sep 20, 2016.


  1. pglaser01

    pglaser01

    Mar 19, 2013
    St. Louis, MO
    If only I were that good....
    Hey all,

    Finally got a gig at the biggest venue in town! Can't wait to play, even though it's a simple audition.

    Anyway, I'm required to fill out a W9....but I've never done this before. Any guidance on filling it as a simple cover band? We aren't listed as anything but do own our own website....just want to make sure I'm covering my basses (you see what I did there)

    Any guidance is really appreciated
     
  2. fdeck

    fdeck Supporting Member Commercial User

    Mar 20, 2004
    Madison WI
    HPF Technology LLC
    I'm not a lawyer or tax accountant, but in my view the band members should fill out individual W9's.
     
  3. 74hc

    74hc

    Nov 19, 2015
    Sunny California
    It depends upon how your band is setup as a business venture. The venue is just following IRS tax law, and their local state as well. They will report the band's income to the IRS, and your band will receive a 1099 just like W-2s.

    The difference here is that you are not the venue's employee, thus the 1099.

    So what do you do? Well, for starters don't do nothing and hope to get through out. You should contact someone who specializes in setting up business, particularly bands. What choices you make will depend upon what state you live in, and what your needs are.

    Here's typical band arrangements:

    1- The band itself is a corporation and the band members hold stock.

    2- One band member holds the LLC, and the rest of the band are independent contractors. This arrangement is very important that the LLC holder does not treat the rest of the band as employees. Otherwise, the IRS and possibly the state, will come in and demand more tax payments as if the LLC is an employer. You can read hints in the "Bass Humor and Gig Stories" forum on a few of the members replies.

    3- The band is not operating as a business, but as a hobby, per IRS rules, and are expecting to be paid under the table, or are struggling to operating above the table in a business world. They give a great performance at a new venue, but wonder why they are not invited back... the reason is rooted in the IRS code for independent contractors and 1099. In short, if you want to play more than one gig and a good venue, you need to fill in the W4.

    4- The band is a general partnership, or the band is a bunch of independent contractors.

    Get to an expert to help you set up the business end. You will be judged on this by the venue who is doing everything professionally and above board with the request of W4. Remember rule #1... if you want to be treated as a professional, be a professional. This is a glimse into that rule.

    By all means, USE A TIN, NOT YOUR SS NUMBER. You can get one in minutes on the IRS website. That is what the above person means by filling in a W9. Identity theft and all that.
     
  4. Biggbass

    Biggbass

    Dec 14, 2011
    Planet Earth
    If they are paying you over $600 then they have to file a 1099 on the payment to you.
    So someone in the band needs to do the W9 to accept payment and the 1099 at the end of the year. Since the payroll will divide out among the band members, it's pretty much a wash tax wise, and the only part you'll be responsible for is the cut that paid out to you.

    Pretty standard stuff with venues that pay by check.
     
  5. Grumry

    Grumry

    Jul 6, 2016
    Nashville
    In Nashville, Broadway/2nd honky tonk scene more specifically, the guy's name being booked is normally the one being paid. They are 1099'd by the club, because they're not considered employees, and then the artist will 1099 their hired guns. They write the band mates off as business expenses and only have to claim their share of the check.
     
    mwbonsall likes this.
  6. If they're paying +$600 and they 1099 you... you're the lucky SOB who gets to pay the taxes on behalf of everyone else in the band.

    That's fine, unless this happens numerous times throughout the year.

    I've gotten fed up enough with it that I've started asking for individual band member checks (keeps their payment under $600).

    Or, you can hand out 1099 forms to each of your band members.

    BTW, we're not a corporation or business; we're just five mooks playing music.
     
    Last edited: Sep 21, 2016
    Siggy and 10cc like this.
  7. fdeck

    fdeck Supporting Member Commercial User

    Mar 20, 2004
    Madison WI
    HPF Technology LLC
    This doesn't make sense. Again, I'm not an accountant, and I don't know how you file. But as I understand it, if you file a Schedule C (profit or loss from business), then you subtract the amount that you pay the other band members, and it is only your own profit that gets entered into the income section of the 1040. If you pay those band members by check, then you have a paper trail for the expenses. If you handle it correctly, you shouldn't have to pay taxes on anybody else's income, only on your own, which you'd be paying anyway.

    Now, if you pay any of those players $600, then you have to 1099 them. You are not responsible for whether or not they file their own taxes properly.
     
    SoCal80s, Coolhandjjl and dtsand like this.
  8. Richland123

    Richland123

    Apr 17, 2009
    You can give each band member a 1099 even if each of them gets paid less than $600. That is your tax paper trail to deduct them from your taxes. I own a different type of business and have done that before.
     
    SoCal80s, fdeck and LowFish like this.
  9. 40Hz

    40Hz Supporting Member

    If you're going to work for money, it behooves you to learn a little about how business works. And also a thing called "tax considerations." Because ignorance of the rules won't get you off the hook when the taxman cometh. And truth is, you can get away with playing fast and loose with things and cruising under the radar. But sooner or later it'll catch up to you. And it gets serious pretty fast when it finally does.

    So get some good advice. Start by visiting the Small Business Administration website at www.sba.gov and start reading about setting up and running a business. Because whether you think you are or not - you are.

    Once you get some idea of how this business thing works, you'll know what you need to do next.

    Luck!
     
    SoCal80s likes this.
  10. jtharp

    jtharp

    May 25, 2008
    Berkeley, CA
    Actual accountant chiming in here...If you haven't discussed your business structure with the band, you are a general partnership by default. In a general partnership, income and expenses flows through to the owners (band members). In my group, I get the 1099s, and I also claim all of the band expenses. Since our 1099 income is less than our expenses for rehearsal space, recording time, etc, I am able to deduct 100% of the income (hobby business limit). As a partnership, you can elect to distribute the income and expenses as you wish between the members. If you are in a similar situation, it might be easier to have one person take all of the income and expenses.

    Also, i don't believe you have to 1099 out the band members, as they are not independent contractors, but rather part of your partnership (probably, unless they are subs).
     
  11. Bingo. Paper trail are the key words here.
     
    Pacman likes this.
  12. BassUrges

    BassUrges

    Mar 14, 2016
    Denver
    Any group of people who work together for profit is inherently a partnership, whether or not any paperwork is filed. The most important thing to note about that is that partners are liable for the actions of their partners as if they themselves had performed the act. So if your drummer has a few too many shots and breaks someone's face on the bar, you, personally, can be sued by that guy and have your house taken. Probably your homeowners insurance won't cover you because it most likely exempts business activities. Isn't the law fun?

    Get a proper corporation or LLC set up, get it an EIN, have it fill out the W-9. There are numerous tax issues you will want to consider (employees vs. independent contractors, wages vs. distributions of profit, etc). While you're at it, put everything else on paper, too: how band decisions are made, how members are hired or fired, how pay is handled, what the extra fee is for the guy who owns the PA (or whether the corporation should buy its own PA and write it off--you can learn all about depreciation schedules in your spare time), etc. Being in business is just like getting married but with no chance of getting laid.

    Oh, and have a good time at the gig!
     
    Pet Sounds likes this.
  13. What BassUrges said. It's quite easy and inexpensive to set up an LLC and obtain an EIN and checking account. Then everything is on the up and up. Every member gets a K-1 at tax time for his or her individual earnings.
     
  14. LowFish

    LowFish

    Nov 8, 2014
    Coastal NC
    Used to be that we got cash at the end of the night, hardly any venues pay with cash now. I give my band members a 1099 at the end of the year, the last thing I'm going to do is pay someone else taxes--I can barley stand paying mine!
     
  15. Separate checks unless you are a business like an LLC. If you are the Solo artist and everyone else is a hired musician the 1099 goes to you :(
     
  16. DavC

    DavC

    May 17, 2005
    Tallmadge , Ohio
    if the check is made out to You ,.. then you should pay others via check for your records ..! just to right off the funds paid out to ' sub-contractors ' ... then you're liable for your part only , everyone else can do what they want ..? cover your a*s ..

    do you have an X-wife ... her SS would work great ..! i'll see if i can still find mine ..! ha

    i played in a duo for about a decade for a chain of dinner clubs ... i rec'd the 1099 in my name at year's end ... i wrote off my partners pay ... then declared my share as income , then took all appropriate deductions ..!
     
    fdeck likes this.
  17. AndyLES

    AndyLES

    Aug 25, 2008
    New York
    *Zombie thread bump*

    Hey, have some questions for some of the experts here.

    1) I recently put together an LLC to use for my stagehand/tech work. Can I use the same LLC for my band stuff? Or should I form a separate one? (the definitions under my NY state form are vague and flexible enough to pretty much do anything under my existing LLC, but I don't wanna run afoul of the feds, of course).

    2) If I CAN use my existing LLC for anything, would my bandmates then have to be 1099'd employees, or do I just consider them independent contractors, hand each his split, and do nothing?

    Thanks for any advice you can give. I'm a business idiot, and all of the legalese is rather confusing.
     
  18. RustyAxe

    RustyAxe

    Jul 8, 2008
    Connecticut
    An employee is a W2. A contractor is a 1099. Any contractor to whom you pay more $600 in the year (total of all payments) must be issued a 1099. Yes, your band members would be 1099 contractors. You pay 'em whatever you pay 'em. It's up the them to file with the IRS for income tax, social security, and medicare. You'll need each member's particulars, including SSN ... of course. Issue each member a W9 to be retained by you. And you should inform them clearly what the 1099 status means to them.
     
    Last edited: Jul 10, 2018
    SoCal80s and AndyLES like this.
  19. AndyLES

    AndyLES

    Aug 25, 2008
    New York
    Thank you so much!
     
  20. Primary

    Primary TB Assistant

    Here are some related products that TB members are talking about. Clicking on a product will take you to TB’s partner, Primary, where you can find links to TB discussions about these products.

     
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