Any thoughts?
When your band collects the nights pay from a gig.
1) Do you report your earnings to the IRS, and if so how do you report it?
2) Do you think its free money and IRS don't need to know.
3) Do you think its the bar/club owners issue?
Band Questions
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generationgap
- Gold Member
- Posts: 218
- Joined: Friday Aug 12, 2005
- Location: Altoona
- Contact:
Band Questions
Your never too young or too old to Rock n Roll
First off ... I am not an accountant nor a lawyer. I AM a professional, full-time musician and have been for over 27 years. This is not legal advice, just friendly advice.
1. I, personally, report my earnings to the IRS. Since this is my business, I use IRS Schedule C to report earnings from a business. If you have a day job, you're probably receiving a W-2 from your employer every year. This tells the IRS what your boss pays you every year. Line 21 of IRS Form 1040 is for "Other Income." If gigging is NOT your primary business or your primary source of money, this is probably where you would list gig income.
2. There's no such thing as "free money." If this is how you make a living, it's best to report it as such. If this is money on the side ... well ... the RIGHT thing to do is report it. Bars and clubs deduct entertainment pay from their taxable income. It's a business expense for them. If they get audited, their records show they paid YOU at some point. If the IRS takes it a step further and does some cross referencing, they will expect to find YOU reporting that money as income.
3. Unless you are a full or part time employee of the bar owner, you are acting as a private contractor. The bar owner is not responsible for withholding taxes from your pay. That means the full responsibility is yours.
4. I'm a solo act, so my records are fairly simple. If you are acting as the representative of the band, and collecting the money at the end of the night, you need written proof that you paid each band member. Otherwise, the IRS sees YOU as the sole recipient of the money.
I know this seems like a royal pain in the ass, but I'm sure it would be a LOT worse if you were to get audited.
1. I, personally, report my earnings to the IRS. Since this is my business, I use IRS Schedule C to report earnings from a business. If you have a day job, you're probably receiving a W-2 from your employer every year. This tells the IRS what your boss pays you every year. Line 21 of IRS Form 1040 is for "Other Income." If gigging is NOT your primary business or your primary source of money, this is probably where you would list gig income.
2. There's no such thing as "free money." If this is how you make a living, it's best to report it as such. If this is money on the side ... well ... the RIGHT thing to do is report it. Bars and clubs deduct entertainment pay from their taxable income. It's a business expense for them. If they get audited, their records show they paid YOU at some point. If the IRS takes it a step further and does some cross referencing, they will expect to find YOU reporting that money as income.
3. Unless you are a full or part time employee of the bar owner, you are acting as a private contractor. The bar owner is not responsible for withholding taxes from your pay. That means the full responsibility is yours.
4. I'm a solo act, so my records are fairly simple. If you are acting as the representative of the band, and collecting the money at the end of the night, you need written proof that you paid each band member. Otherwise, the IRS sees YOU as the sole recipient of the money.
I know this seems like a royal pain in the ass, but I'm sure it would be a LOT worse if you were to get audited.
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whitedevilone
- Diamond Member
- Posts: 1072
- Joined: Saturday Mar 24, 2007
- Location: Watching and making lists.
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onetooloud
- Gold Member
- Posts: 263
- Joined: Monday Aug 11, 2003
- Location: Johnstown
Zupe, excelent surmize of the situation.
If you do it for a living and nothing else, REPORT IT! And that also includes the "Self Employment Tax" which is Social Security". Don't worry, you'll get it back later.
If you don't do it full time, you can never go wrong by reporting it but because the system is "less than perfect", most people don't.
So you play the bar down the street or an average bar in Altoona or Johnstown on the weekends. Most bands probably don't report stuff like that but as onetooloud says, if you start getting bigger gigs or big paying returning gigs and remember the people hiring you need to claim your expense, you should start thinking about it.
If you do it for a living and nothing else, REPORT IT! And that also includes the "Self Employment Tax" which is Social Security". Don't worry, you'll get it back later.
If you don't do it full time, you can never go wrong by reporting it but because the system is "less than perfect", most people don't.
So you play the bar down the street or an average bar in Altoona or Johnstown on the weekends. Most bands probably don't report stuff like that but as onetooloud says, if you start getting bigger gigs or big paying returning gigs and remember the people hiring you need to claim your expense, you should start thinking about it.
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floodcitybrass
- Platinum Member
- Posts: 527
- Joined: Thursday Jan 30, 2003
1) Do you report your earnings to the IRS, and if so how do you report it?
- YES
Create 1099 forms for the other members of the band.
2) Do you think its free money and IRS don't need to know.
- YES they need to know.
Take note that you can also claim expenses against this income as well.
3) Do you think its the bar/club owners issue?
-Many will call you ( the band leader) the first week in January and ask for YOUR SS#. They send a 1099 to YOU and unless you planned properly in question 1, it looks as if collected all of the money for the gig but actually you distributed it to the band.
Technically they should have you fill out a W9 prior to playing.
- YES
Create 1099 forms for the other members of the band.
2) Do you think its free money and IRS don't need to know.
- YES they need to know.
Take note that you can also claim expenses against this income as well.
3) Do you think its the bar/club owners issue?
-Many will call you ( the band leader) the first week in January and ask for YOUR SS#. They send a 1099 to YOU and unless you planned properly in question 1, it looks as if collected all of the money for the gig but actually you distributed it to the band.
Technically they should have you fill out a W9 prior to playing.