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Venue pays with a check. ..
- Thread starter kikstand454
- Start date
Why should it? Many times the venue will cut us a check, and then cash the check out of the register receipts. Gives everyone a paper trail of the money. The IRS says that any contracted labor (as a band would be) to which more $600 is paid in a year, is required to receive a 1099-MISC ... the income is taxable, and is reported to the IRS. This complicates things a bit ... the check is made out to the band leader (so the venue needs his SSN). The band leader pays the rest of the band, and deducts the pay out on the band leaders tax return. Again, if the band leader pays out more the $600/yr to an individual member that member gets a 1099-MISC.
Casual bands that work only once in a while are troubled by all this accounting stuff, but pro bands know how it works. Fortunately, I usually get cash on the barrel head, and we leave the gub'mint out of it whenever we can.
Casual bands that work only once in a while are troubled by all this accounting stuff, but pro bands know how it works. Fortunately, I usually get cash on the barrel head, and we leave the gub'mint out of it whenever we can.
Yes. .. well. ... I may know a guy who because of being in a three piece and paying all the taxes for the gigs, essentially did an entire years worth of gigging for free. Or. ... spread out for the band. .. made $60 a show.
I may also know of a venue, who not only wants to write a band name on the check instead of individual names. ... but then charges a cash cover at the door. There by making unreported cash for the venue- and then forcing the band to pay taxes on THEIR pay.
This person/ band may be getting a bit frustrated with the situation. ...
I may also know of a venue, who not only wants to write a band name on the check instead of individual names. ... but then charges a cash cover at the door. There by making unreported cash for the venue- and then forcing the band to pay taxes on THEIR pay.
This person/ band may be getting a bit frustrated with the situation. ...
Gaolee
Official leathers tester and crash dummy
As long as you are being straight up with your taxes, who cares if the venue cheats? That's their problem to live with.
The band is required to report income from its gigs regardless of whether it is paid in cash or check. If the band is not an incorporated entity of some sort, then the individual members need to report the income they receive.
No. ... if the venue is charging a cover for the band. And pocketing it at no tax cost, then writing a check for the band ( that they're going to write off) at no tax cost. ... while said band is still paying taxes on this income- it seems pretty shady to the band no?
The bar makes say. ..$600 tax free ($300 at door, $300 write off of bands pay) and the band makes $200 after taxes?
Agreed.
If you are playing enough to worry about the tax implications, then you SHOULD be worrying about the tax implications.
That's only fair.
If you play twice a year and end up with a net of a few hundred bucks the taxes are nominal and the worst the IRS (or Canada Revenue depending on which side of the border you're on) is going to do if they find out you didn't pay is charge you what you should have paid. If, on the other hand you are playing regularly for money, that is a JOB and like any, that means you have to pay income tax.
If you think something you get paid for is any different than pumping gas (tax-wise) you are mistaken, why should it be?
Also, as a "private contractor" you can write off a lot the expenses you require for the gig - gas, strings, depreciation on equipment, so you don't need to fear losing money by being honest.
Finally, if you are morally opposed to income tax, fine but stop accepting legal tender sponsored and backed by governments who live by income tax - ask for chickens or gold from the next venue - then you will be bartering and won't have to pay taxes.
Gaolee
Official leathers tester and crash dummy
The moral hazard is their issue, not yours. Their business practices are their problem so long as they pay the band what they are supposed to pay the band. If they cheat the band somehow by miscounting the take at the door for example, that's a different issue. If I get paid as promised, I'm happy. That's the entire long, short, and middle of it.
You don't know whether the venue is reporting the cash income, and it irrelevant to band in any event whether the venue reports it or not, as long as the band gets paid what it is supposed to get paid.
I have to agree - if the band is being paid - they are supposed to pay a fair amount of taxes ON THAT PAY. The venue is allowed to write that off - that's an expense. If they then cheat in some other way, that's none of the band's business.
As far as $600 for the band turning into $200? Exactly who do you know paying 66% income tax? There isn't a nominal tax bracket in North America that high, no matter how much you make, and if you are approaching the upper tax brackets, they you need to pay your share AND you will have plenty of expenses yourself to write-off.
EDIT - sorry, I misread your post about how much the band gets. If he is writing off $300 for the band - they DO need to get that much as he is indeed downloading the tax implications onto the band. Otherwise, everything is legit as far as the band is concerned - whether he pays the appropriate taxes for the cover is between him and the government.
Also - if he writes a $300 cheque he doesn't get $300 BACK from the government, he just has that much less income to pay tax on - so $300 times whatever his tax bracket is - for most small businesses something less than 50% so less than $150.
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Also - if this guy that you may know is paying the taxes for all the band members than he is screwing himself - he needs to write cheques to the other band members to ensure that they share the tax load.
Also - $60 per show over a year is hardly a huge income, but if that's weekly (for easy math) $3000 is not NOTHING either.
But you... er, the guy you know, need(s) to make sure that all expenses are also accounted for - the main one being paying the rest of the band.
OR take an amount equal to the taxes you, er... he is paying on their money so it is not a burden on the person booking the gigs.
In my old band we gave the person who booked any gig 10% off the top to cover expenses and taxes, etc and to incentivize members to book gigs and reward those that did - it's only fair that something should be paid for the extra work - and that the extra work does not result in penalizing the person who does it.
DiabolusInMusic
Functionless Art is Merely Tolerated Vandalism
I have almost always been paid in a cheque by a bar. That is standard practice, you cash the cheque at the bar and it doubles as a receipt. Places that pay you in cash are usually on the slow road to new management.
Actually, I have to disagree with that last statement - they're usually on the express route.
Let's say that BL in the Hypothetical Band ( they're obviously a jazz metal fusion outfit with a MIDI looper. .) Were to work a deal where no individual person in the band was paid by one venue more than $600 in said year? So BL signs the first two $300 checks, keyboard/drummer signs the next two and guitarist/kudzoo/skinflute signs two. So that would be 6 gigs the band would play that year without the venue requiring an I9 correct? This would make it the bands individual moral responsibility to claim that revenue- assuming they made other monies from other gigs. Kind of like the moral responsibility of waitresses and strippers to claim their tips correct?
I'm just trying to figure out how to help my friend justify spending 5 hours to make $60. I told him being in a paying band was a mistake. ....but he wouldn't listen.
I'm just trying to figure out how to help my friend justify spending 5 hours to make $60. I told him being in a paying band was a mistake. ....but he wouldn't listen.
First, the 1099 threshold is "at least $600," not "more than $600." Thus, in your hypothetical situation where each band member is paid $600, the payor would be required to file 1099s.
Second, the band's members have a legal (not merely moral) obligation to report any gross income regardless of whether they receive a 1099.
wmhill
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Unless your band has a DBA, the check needs to be made out in one of the members name. This was a hassle for us once (and it was discussed when booking the gig, then they wanted to renegotiate the price AFTER we played the show- but that a whole other story!). Make sure whatever you do, it's set in advance of the gig. If you don't cover that when booking, and they give you a check, too late.
If anyone here on talkbass can post the law that requires you to pay income tax, I will give you all the money in my bank account...
Furthermore I will give anyone that can post the documentation stating that the IRS is a part of the government and has the right to collect income tax, $1000 dollars. And I'm being serious....
Know the law and your rights....
Furthermore I will give anyone that can post the documentation stating that the IRS is a part of the government and has the right to collect income tax, $1000 dollars. And I'm being serious....
Know the law and your rights....
OK. ... so we have established the fact that being a weekend musician is a dying art in several different ways including financially. No real reason for my friend to continue on as a paid musician- but I will, for fun, continue this discussion by asking,
taxes- how does your hand handle it?
Every man for himself? Band as a financial entity? Which way do you find easiest/ best suited for the average weekend warrior?
taxes- how does your hand handle it?
Every man for himself? Band as a financial entity? Which way do you find easiest/ best suited for the average weekend warrior?
Back in 1981 I was playing with a band at Madame Wong's East in LA's Chinatown. I asked if we were going to get paid and the other guys said "Sure, you wanna stick around and pick up the check? Being new to L.A. and the band, I did just that, nursing an over-priced beer, till around 2 pm. The owner comes out and presents me with a check for $7.00. I got to keep the whole thing! Welcome to L.A! Just thought I'd lighten up the thread, I really hate the Music business. But seriously, I love cash, checks are a real drag, but if you want to go "Pro" you'll have to see checks and like them.
meh, I just file as an independent artist/musician and add in all my expenses.
studio rent, mileage, strings, repairs/maintenance, travel expenses.
usually nets out so that I get more money back from the taxes I paid on my day job.
like someone else said, if you are getting paid enough to worry about it, then you SHOULD worry about it!!
if you are getting multiple 1099's at the end of the year, and it adds up to more than 5k or so, then you should probably start an LLC and get a business checking account. makes things clean and easy, and none of the band can complain if you show them a P&L report once in a while that shows where all the money went.
studio rent, mileage, strings, repairs/maintenance, travel expenses.
usually nets out so that I get more money back from the taxes I paid on my day job.
like someone else said, if you are getting paid enough to worry about it, then you SHOULD worry about it!!
if you are getting multiple 1099's at the end of the year, and it adds up to more than 5k or so, then you should probably start an LLC and get a business checking account. makes things clean and easy, and none of the band can complain if you show them a P&L report once in a while that shows where all the money went.
