#1
So I was told by my singer today that hes being slammed to pay for tax on what we are making through giging. Now the confusing part is
a). its paid in cash,
b). it would be kinda hard for anyone of authority to know we are giging and making cash as a band, and
c). I thought bars paid a tax to let bands perform in their bars *same as with jukebox use* so why would they come after us?


Can someone shed light on this, with maybe a source of somekind? Thanks
#3
Its either a scam, or ITS A CONSPIRACY!
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#4
I dunno where you are, but I know that if you're in Canada, you don't have to pay any tax until you make more than 20,000 a year from that source of income, which I doubt you do. It's similar in most places, there's a minimum amount you have to make before you can get taxed.
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#5
Hmm interesting I will mention that to my singer... Individually we probably made 2.5-3 grand each in pay the last 6 months so probably together we are looking at 10-12 grand..

It was a VERY GOOD SUMMER

But hmm if they insist on taxing us maybe we get tax breaks for the benefit shows we are doing for charity coming up....
Last edited by ehlert99 at Sep 18, 2009,
#6
Although there IS a basic personal tax exemption, under which you don't have to pay any tax, but in Canada, that is closer to $8000 per year.

The taxman gets suspicious when there is no income reported. If he is not declaring any income, the next logical question is "how do you live?" Maybe there was a red flag there that has led him to being audited.

About the bars and jukebox thing.... that is a blanket licence that the bars pay to a performing rights association (like SOCAN, BMI, ASCAP, etc.) It allows them to have live and/or recorded performances of copyrighted material in their establishment, and it is payable by the venue, not the band. This fee is paid annually. Don't confuse that with taxes, though. Performance royalties an entirely different ballgame.

CT
Could I get some more talent in the monitors, please?

I know it sounds crazy, but try to learn to inhale your voice. www.thebelcantotechnique.com

Chris is the king of relating music things to other objects in real life.
#7
Quote by ehlert99

But hmm if they insist on taxing us maybe we get tax breaks for the benefit shows we are doing for charity coming up....


You might be able to write off the amount you would have charged for the performance as a charitable donation. That would lower your annual income by, what.... $100? So you would get out of paying tax on about a hundred dollars. Not significant enough to get excited about.

CT
Could I get some more talent in the monitors, please?

I know it sounds crazy, but try to learn to inhale your voice. www.thebelcantotechnique.com

Chris is the king of relating music things to other objects in real life.
#8
Hmm okay, thanks Chris!

I am just a little concerned by it becuase everyone in the band works and and even though I work the least as far as the states concerned I am in college so its not like I will be going nuts with cash anyways :P

Idk just seemed weird that its coming up now.

What is the usual charge for the tax? I understand its probably a percent off the total earnings for the band not individual... so what would that be in terms of percent?

If it helps I am from Wisconsin.
#9
I don't know specifically about US tax law, but there are a couple of generalizations that typically hold true:

The amount of tax you pay depends on the amount of money you make each year. Every so many thousands you make, the percentage of tax you pay on it gets higher. If you all have different jobs making different amounts of money, then you will all pay different amounts of tax.

Now.... if you register the band as a business, then the band will have to pay tax on its earnings, but you will be able to write off salaries (if the band members take money) as a business expense, thereby lowering the amount of net income, thereby lowering the amount of tax payable. BUT!! That money gets taxed further down the line.... when YOU receive the money from the band (the band is, in effect, one of your employers then), that INCREASES your net income, meaning you will have to pay tax on that income.

It's not all bad news, though. Do some research. I claimed my musical income for a few years and wrote so many things off against it that I was operating at a loss. I claimed that loss against my net income from my other job, thereby LOWERING the amount of tax I had to pay.

CT
Could I get some more talent in the monitors, please?

I know it sounds crazy, but try to learn to inhale your voice. www.thebelcantotechnique.com

Chris is the king of relating music things to other objects in real life.
#10
Quote by axemanchris
I don't know specifically about US tax law, but there are a couple of generalizations that typically hold true:

The amount of tax you pay depends on the amount of money you make each year. Every so many thousands you make, the percentage of tax you pay on it gets higher. If you all have different jobs making different amounts of money, then you will all pay different amounts of tax.

Now.... if you register the band as a business, then the band will have to pay tax on its earnings, but you will be able to write off salaries (if the band members take money) as a business expense, thereby lowering the amount of net income, thereby lowering the amount of tax payable. BUT!! That money gets taxed further down the line.... when YOU receive the money from the band (the band is, in effect, one of your employers then), that INCREASES your net income, meaning you will have to pay tax on that income.

It's not all bad news, though. Do some research. I claimed my musical income for a few years and wrote so many things off against it that I was operating at a loss. I claimed that loss against my net income from my other job, thereby LOWERING the amount of tax I had to pay.

CT


god i love the music business!
#11
Quote by axemanchris
I don't know specifically about US tax law, but there are a couple of generalizations that typically hold true:

The amount of tax you pay depends on the amount of money you make each year. Every so many thousands you make, the percentage of tax you pay on it gets higher. If you all have different jobs making different amounts of money, then you will all pay different amounts of tax.

Now.... if you register the band as a business, then the band will have to pay tax on its earnings, but you will be able to write off salaries (if the band members take money) as a business expense, thereby lowering the amount of net income, thereby lowering the amount of tax payable. BUT!! That money gets taxed further down the line.... when YOU receive the money from the band (the band is, in effect, one of your employers then), that INCREASES your net income, meaning you will have to pay tax on that income.

It's not all bad news, though. Do some research. I claimed my musical income for a few years and wrote so many things off against it that I was operating at a loss. I claimed that loss against my net income from my other job, thereby LOWERING the amount of tax I had to pay.

CT


And on that note:
KEEP RECEIPTS FOR EVERYTHING. Gas for the van on the way to the gig. Guitar strings. Picks. If you buy the promoter a drink, you can claim that as a business expense, so GET A RECEIPT. If you can't prove it, it never happened. Almost every dime you spend on anything approaching relevance to your band can be considered a business expense, but you have proper book keeping to avoid getting raped in an audit.
#12
Excellent point!

CT
Could I get some more talent in the monitors, please?

I know it sounds crazy, but try to learn to inhale your voice. www.thebelcantotechnique.com

Chris is the king of relating music things to other objects in real life.
#13
Is there a State income tax?

The only kind of tax I can think of, would be on his personal income, either State or Federal. If your band gets paid cash, then I'm a bit confused too. Unless an employer has reported to the State or the Fed. what he's been paid, I don't know how they're tracking it.

If he lists his profession as an entertainer, but never shows any income, then Chris may be right about him getting tagged that way. Especially if money is showing up in his bank account, and he can't attribute to another source. I must admit, unless you guys are pulling in some bigger $s, I don't know why they'd bother. They generally don't waste their time on small amounts. Not a dig, I'm talking at least high 5 to 6 figures/year.

Also, if the tax is for your band's gigs, why aren't the rest of you getting "slammed"? Does he collect for the band, and pay you guys? If he's personally accepting checks, and paying you guys cash, that could possibly be a problem for him(if he's not doing it right).
Last edited by chokmool at Sep 20, 2009,