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Tax stuff...am I screwed?

Discussion in 'Band Management [BG]' started by rob_d, Mar 19, 2009.


  1. rob_d

    rob_d

    Jun 14, 2001
    So I just got a note in the mail from the IRS claiming that I owe on unclaimed income from 2007. It was from a place I played at with a cover band that is now defunct(the band is defunct not the venue). I used to collect and sign for the checks and pay the guys out of that(the place would always cash the check on the spot). I never received anything in the mail from the venue that year like I would a regular employer so I didn't think anything of it. I don't know, perhaps they don't have to send anything. Basically I was naive at the time and didn't consider this stuff. We had about 3 or 4 venues that we played at regularly and everyone had a venue where they signed for the money and all that. If I tried to contact these guys now I'm sure I'd get the cold shoulder as far as chipping in towards this bill. I don't have their SSN's so I can't do anything with that. Basically I'm currently saddled with a $1300 tax bill from gigs I did two years ago. Am I completely screwed on this one or is there anything I can do to at least reduce this amount? Yes I know I was stupid and my lesson has been learned.
     
  2. akaTRENT

    akaTRENT

    Jan 10, 2009
    New Jersey
    My mom does taxes. If its under your name, your only option is to get an accountant to get you some write offs.
     
  3. pedro

    pedro

    Apr 5, 2000
    Madison, WI.

    IRS requires the payor to issue a 1099 to any contractor (musician) who they paid $600 or more during the calendar year. It’s not uncommon for them to issue the 1099 to the bandleader who then pays his band mates and issues them a 1099. You could attempt to amend the return and reflect the gross amounts on schedule C along with a deduction for the amounts you paid your band mates but without a 1099 to them, if they decide to audit you wouldn’t have much of a prayer of substantiating the deduction.
     
  4. rob_d

    rob_d

    Jun 14, 2001
    Yes, I was thinking about write-offs, but since this was two years ago and I was stupid about it I have zero receipts to back anything up.
     
  5. bikeplate

    bikeplate Supporting Member

    Jun 7, 2001
    Upstate NY
    HI

    You need to figure what you paid the other members and 1099 them. Thats how it works

    Rob
     
  6. rob_d

    rob_d

    Jun 14, 2001
    How do you 1099 if you don't know their SSN's/addresses etc..
     
  7. pedro

    pedro

    Apr 5, 2000
    Madison, WI.
    You can claim the deduction for the amounts you paid the band mates on an amended tax return but without the SSN's and a 1099 to each of them (assuming one was required) I doubt your deductions would be allowed under audit.

    BTW, FWIW, I've been a CPA for almost 30 yrs.
     
  8. bikeplate

    bikeplate Supporting Member

    Jun 7, 2001
    Upstate NY
    HI

    Thats all part of being a band leader. You are responsible for booking, collecting gig money, and paying. You should have their SSN, address's, etc. At the end of the year, the clubs are resposible for getting you 1099's for what they paid you in a timely manner, just like you day job. Then you divide by the number of members and get them their 1099's. Its indepedent contractor 101. Id do your best to get the info together

    Rob
     
  9. pedro

    pedro

    Apr 5, 2000
    Madison, WI.
    By now they've already filed their 2007 returns and would need to also amend their tax returns and pay in taxes, interest and possibly penalties. I sincerely doubt he'll have much success.

    To OP. How much is the 1099 you got? How much (in total) did you each band mate out of that sum?
     
  10. ric stave

    ric stave

    May 6, 2006
    Buffalo, NY
    Chalk it up to lesson learned if you can't obtain that info, but in the future, keep good records and try to do everything 'legit' - if you are the person accepting money from a bar/venue/event, get everyone's info upfront. If they will not give it to you, then I would seriously reconsider being 'in business' with those people (you ARE in business if you are in a situation where you need to accept and distribute money, especially if it's 'trackable')

    I went through an audit a few years ago and was really screwed on some things - I had claimed everything on my taxes and the other members paid me their 'cut' of what should've been owed if the monies were distributed and claimed by each of them - but although I had technically claimed what was paid to me, the IRS disallowed the combined writeoffs, because quadruple mileage and clothes for other people and all the little equipment accessories couldn't technically be claimed by one person when it was 4 people involved.

    Do it the right way - if you are being responsible for the $$$, make sure everyone knows upfront that they need to supply you with the info (address, SS#, etc) and that they WILL be issued a 1099 at the end of the year. Or do this, if they refuse - tell them you must keep 30% of any money due to them from each transaction to pay for their portion.
    I think they'll come around....
     
  11. rob_d

    rob_d

    Jun 14, 2001
    The total amount was $4,400. So if you divide that by 4 you would get 1,100 which is what we each made throughout the year. If I amend and claim I paid out 3,300 how scared should I be of an audit?

    By the way, thanks for the help.
     
  12. pedro

    pedro

    Apr 5, 2000
    Madison, WI.
    “if you are the person accepting money from a bar/venue/event, get everyone's info upfront. If they will not give it to you, then I would seriously reconsider being 'in business' with those people (you ARE in business if you are in a situation where you need to accept and distribute money, especially if it's 'trackable')”

    True about being in business, etc. If they won’t give it to you IRS requires a 20% backup withholding.

    “I went through an audit a few years ago and was really screwed on some things - I had claimed everything on my taxes and the other members paid me their 'cut' of what should've been owed if the monies were distributed and claimed by each of them - but although I had technically claimed what was paid to me, the IRS disallowed the combined writeoffs, because quadruple mileage and clothes for other people and all the little equipment accessories couldn't technically be claimed by one person when it was 4 people involved.”

    That’s what CPA’s are for.
     
  13. pedro

    pedro

    Apr 5, 2000
    Madison, WI.
    Unfortunately with those numbers you would have been required to issue a 1099. Just curious did you claim your share?
     
  14. rob_d

    rob_d

    Jun 14, 2001
    No I didn't. Like I said, I never received anything from the club the way you would receive a W-2 from an employer so I thought nothing of it. We were all stupid..just some college kids out playing for fun, beer, and girls. I know better now. Thing is that I know some of those guys must have been hit with the same thing because they were signing off at venues that I know we made more at than this one.
     
  15. Are you screwed? Yes you are.
     
  16. pedro

    pedro

    Apr 5, 2000
    Madison, WI.
    The plot thickens. Under those circumstances, I’d swallow hard and pay up.
     
  17. ric stave

    ric stave

    May 6, 2006
    Buffalo, NY
     
  18. pedro

    pedro

    Apr 5, 2000
    Madison, WI.

    Hard for me to fathom any professional recommending you do it this way.
     
  19. ric stave

    ric stave

    May 6, 2006
    Buffalo, NY
    Agreed - she didn't come up with the plan all by herself - it was a combination of a few members not wanting to claim their own stuff and the rest of us asking how we should do it. It would've been nice if she had been a bit more forceful on suggesting the 'correct' way to do it, especially since I was looking to her and her opinion as a professional.

    But I learned, and I would never do things like that again.

    And as I said, I would never go to her again either.
     
  20. pedro

    pedro

    Apr 5, 2000
    Madison, WI.
    The better option (besides actually doing it right) would've been for her to figure the tax cost to you with and without the payments to the other bandmates, and having them pony up their share. But claiming their expenses to the mix was just plain dumb, IMO.
     

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