Taxes : Hobby vs. Buisness

[tonefight]

Here's an article I found, its not a bad idea to cover your ass, problem is doing it without opening a can o'worms.

http://www.bankrate.com/natl/default_fr ... 10403a.asp

[Hannibal]

Too many in entertainment don't take the tax issue seriously enough. It's just cash in the pocket to most musicians and sound guys. A few years back, a couple of local clubs were audited by the IRS. The IRS questioned the entertainment expenses they were claiming. They had to provide a list of what bands played there, how much they were paid, on what dates they were there, the name of the band member paid, etc. The clubs were cited for not having better payment records. The IRS then proceeded to audit the musicians. There were large fines, penalties, and back taxes owed by a lot of people from that. In another case, one band fired their keyboard player a second time. He kept meticulous records and reported all his earnings from playing, since he did not have another "day" job. Music was what he did. None of the other band members reported a penny, and got caught up in serious tax audits when they got nailed. I know it's a pain to keep the records and do it right, but keeping the IRS off your back is always a good idea. Also, when making payments on what you make in music, it's not all taxes. A portion of it goes to Social Security payments, which gives you credits for wages earned, which will affect your retirement.

[jangel]

Hannibal Wrote

None of the other band members reported a penny, and got caught up in serious tax audits when they got nailed

This part of your statement is false......I know....I was part of it. and there are other factors that you did not mention......Like there was a bar in toona town that also was involved in a crafty way to cause the problem.
he didn't act alone.