Gigs that Require 1099 - Questions

D

DrummerCA35

Senior Member
Hello,

This post is not intended to offend anyone.

We are a (mostly) middle-aged, 5-piece band, each of us with "day jobs." We've all played music a long time, and play for the enjoyment of it. We are playing some clubs in the area, and starting to get some festivals/weddings/privates as well.

Some of the fairs/festivals require the band to be 1099'd. None of the members in the band are willing to be the "1099 person" and so we haven't taken any of these gigs. The fear is that it will complicate the taxes further when we file. But, if a member agreed to be the "1099 person", how could this fairly work? Estimate the tax bracket, deduct that amount, and then divide the remainder amongst the band? So, if a festival paid $200 (not a huge amount of money by any means), and "Joe" was in the 30% tax bracket, that would "leave" $160, and then divide the rest by 5 people? Is this even worth it?

Further, for those of you that use Turbo Tax to do your filing, how much does taking on a 1099 complicate things? is it even worth it to take on a few of these types of gigs for the overhead in accounting it will cause? No one in the band has agreed to do this. One member thinks that the solution is to just "play for free" at these types of venues. I'm not sure I agree, because what does that do to others who need the money and need to get paid for their performing? As it is, these types of gigs pay very little anyway. I have NO PROBLEM playing some charity gigs for free, but this isn't what I'm talking about.

And how much does this complicate the taxes to take on a few of these?

I would appreciate any responses from those of you that have dealt with this.

Any again, no offense meant. I'm just wondering if the extra accounting is worth the $30 per person playing a Festival would pay. (Of course the joy of performing is priceless...)

Thanks...
 
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There are a few ways to handle this.

If YOU are willing you could take the 1099 and just deduct about 20% from the total before you divvy it up to your bandmates. It will be a close approximation to how much tax liability you will incur by yourself, depending of course how much income you earn annually. If you only have a few of these gigs a year, it's not really that much of a hassle on your personal tax return.

If you want to forego paying taxes all together, you could create a single member LLC. You will be able to write off expenses such as mileage, gear, etc.. and with the low annual revenue you probably won't owe ANY taxes. It's more of an accounting pain to attach the schedule C to your personal tax return but you most likely wouldn't pay any taxes on band earnings until you get to about $8,000 in gross revenue (once again, depending on your personal gross income)

Google search the US 2014 tax table and you will see what I mean.

BTW, I am not a tax accountant, so if remember what my advice is worth. Very little. ;-)
 
Including a 1099 in Turbo Tax is not a big deal. It is just like another W2 with less data to input. If it were me and it were only a handful of gigs that work that way this is how I would do it.

Go back to my previous year tax in Turbo Tax and add an additional 1099 for the amount of the gig and note the impact on my taxes. Then divide that amount by the number of persons in the band.

I have not done my taxes without TT for a while but if it were manual you can simply add the gig pay to your gross income and look up the taxes on that newer amount. That would give you the delta taxes owed because of the 1099 revenue.
 
Guys,

Thanks for the posts! This really helps. I think it was a mistake to turn these gigs down based on how simple this sounds. I appreciate it.
 
If you don't mind breaking the law, throw that 1099 in the trash. A person with a day job is never going to get audited. It's not like they can or will track every 1099 and check your returns.



If you want to remain above the board, just set up the band as a small business and you will obviously lose money and be able to take home more of your regular income.

A business doesn't have to make money, it just has to intend to make money.
 
New Tricks said:
If you don't mind breaking the law, throw that 1099 in the trash. A person with a day job is never going to get audited. It's not like they can or will track every 1099 and check your returns.

If you want to remain above the board, just set up the band as a small business and you will obviously lose money and be able to take home more of your regular income.

A business doesn't have to make money, it just has to intend to make money.
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Eventually someone on this forum who maybe works for H&R Block will mock you for seeking tax advice on a drum forum. ;-)

On second thought, I think you should set up a non-profit 501c3 and designate your gig revenue as fund raising for studying the effects of alcohol on middle aged musicians in social settings. Allocate ALL of the funds to administrative fees and "field" studies and never pay taxes ever again. This is the plan I now recommend.
 
I was the 1099 guy once, and it sorta sucked for me because I ended up paying the taxes on that income (I didn't take a percentage to cover that when I paid the other two guys - my fault). But in California, once you're getting more than $600, then it counts as income for you and must be accounted for. Companies paying for entertainment have to file this because it comes out of their income and the only want to be taxed on that, so they file 1099's for out-going payments.

I would keep my nose clean and file the 1099 and pay the taxes after you've deducted said 20% for your troubles and for the taxes you will owe.

Personally, I would tell the client that I want separate checks for each band member, and since this will most likely fall under $600, there are no 1099's to file for the band members. Too bad the companies paying are on to this ;)
 
First, I'm a bit shocked that a venue paying 200 for a whole band is even going to bother with collecting 1099 stuff for so little.

Second, I've come across a few places now that take an ID from everyone and scan it into a computer, apparently for these tax purposes. I was almost worried about that being more likely to get looked into by the tax man, but I really doubt it.
 
I'm in California, and I've now I've heard of that $600 rule. I think for playing a few festivals/fairs, it would be under $600 per vendor. So while someone (ie, me) would need to provide their info for tax purposes, I doubt there would BE a 1099.

And yeah, it seems like such a small amount of money for the trouble of the 1099.

Money for playing....that's a whole 'nuther matter....
 
DrummerCA35 said:
Hello,

This post is not intended to offend anyone.

We are a (mostly) middle-aged, 5-piece band, each of us with "day jobs." We've all played music a long time, and play for the enjoyment of it. We are playing some clubs in the area, and starting to get some festivals/weddings/privates as well.

Some of the fairs/festivals require the band to be 1099'd. None of the members in the band are willing to be the "1099 person" and so we haven't taken any of these gigs. The fear is that it will complicate the taxes further when we file. But, if a member agreed to be the "1099 person", how could this fairly work? Estimate the tax bracket, deduct that amount, and then divide the remainder amongst the band? So, if a festival paid $200 (not a huge amount of money by any means), and "Joe" was in the 30% tax bracket, that would "leave" $160, and then divide the rest by 5 people? Is this even worth it?

Further, for those of you that use Turbo Tax to do your filing, how much does taking on a 1099 complicate things? is it even worth it to take on a few of these types of gigs for the overhead in accounting it will cause? No one in the band has agreed to do this. One member thinks that the solution is to just "play for free" at these types of venues. I'm not sure I agree, because what does that do to others who need the money and need to get paid for their performing? As it is, these types of gigs pay very little anyway. I have NO PROBLEM playing some charity gigs for free, but this isn't what I'm talking about.

And how much does this complicate the taxes to take on a few of these?

I would appreciate any responses from those of you that have dealt with this.

Any again, no offense meant. I'm just wondering if the extra accounting is worth the $30 per person playing a Festival would pay. (Of course the joy of performing is priceless...)

Thanks...
Click to expand...

I use an accountant but you're getting quite bit of good advice here.

One possibility is for you to be the 1099 man a far as any checks from clients/accounts and then have 1099s filled out for everyone else in the band, thus you will be the contractor hiring them as labor. This is fine as each $600 gig adds up into a chunk of money (remember, whether you make $5 or $5 million, the IRS calls it earned income). Essentially, to the IRS, you are a contractor subcontracting out the work to your band members.

The only problem with this is, is that the other members may start to resent you as the money man in the band and grow some distrust toward you. It may or may not help to remind them that you are the one in the band doing all of the booking and bookwork as opposed to any one of them and that it is all office time that they were not willing to put in. All they have to do is show up and play.

Mike

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Matt Bo Eder said:
I was the 1099 guy once, and it sorta sucked for me because I ended up paying the taxes on that income (I didn't take a percentage to cover that when I paid the other two guys - my fault). But in California, once you're getting more than $600, then it counts as income for you and must be accounted for. Companies paying for entertainment have to file this because it comes out of their income and the only want to be taxed on that, so they file 1099's for out-going payments.

I would keep my nose clean and file the 1099 and pay the taxes after you've deducted said 20% for your troubles and for the taxes you will owe.

Personally, I would tell the client that I want separate checks for each band member, and since this will most likely fall under $600, there are no 1099's to file for the band members. Too bad the companies paying are on to this ;)
Click to expand...

This would work as well but I don't know about the separate checks part as most clients want to write only one check. But Bo may be more charming and persuasive than I! Also, something else for you to consider; you are now using personal equipment in the pursuit of business which means that your homeowners policy will not cover your losses in the even that your gear gets damaged or stolen. You will therefore need to get insurance to cover your gear apart from your homeowners policy.

Correct me if I am wrong here, members, but I would rather you be prepared than bitterly disappointed!


Mike

http://www.mikemccraw.com
http://www.dominoretroplate.com
http://www.patentcoachmike.com
http://www.youtube.com/drummermikemccraw
http://www.myspace.com/drummermikemccraw
http://www.linkedin.com/in/mikemccraw
http://twitter.com/mikemccraw
http://www.skillpages.com/mike.mccraw
 
One possibility is for you to be the 1099 man a far as any checks from clients/accounts and then have 1099s filled out for everyone else in the band, thus you will be the contractor hiring them as labor. This is fine as each $600 gig adds up into a chunk of money (remember, whether you make $5 or $5 million, the IRS calls it earned income). Essentially, to the IRS, you are a contractor subcontracting out the work to your band members.

The only problem with this is, is that the other members may start to resent you as the money man in the band and grow some distrust toward you. It may or may not help to remind them that you are the one in the band doing all of the booking and bookwork as opposed to any one of them and that it is all office time that they were not willing to put in. All they have to do is show up and play.
Click to expand...


Shouldn't be the case. Members should be mature enough to provide you with their SS numbers, or tax ID numbers. If you're going to play music for money you should have your biz somewhat together, as in get a GE license.

Taxes aren't rocket science, they're a rip off, learn how not to get (completely) ripped off! You learn how to play your instrument, learn a little about the tax codes, make it work for you, it can.

If someone in your band is afraid to give you needed tax info, just tell them "Im not the IRS."
 
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