Have any of you all had to deal with accounting issues with your music? I’m really in a quandary here and would love some advice.

My deal is I have a group (link in signature) who play typewriters. It’s sort of a percussion ensemble meets Matmos meets The Office, which is neither here nor there. But the point is we have a lot of performances at places like museums and galleries where they need taxpayer IDs so they can write a check. It usually comes out to a few grand a year - nice on an indie level, but it's not going to change anyone's standard of living, and we just want to reinvest revenue in the band anyway.

What’s a good accounting structure for this? I considered LLC or SCorp but that seems really heavy for the amount of money we make, and the overhead is like a couple grand a year. On the other hand, putting money into one of our members’ personal accounts makes it tough to account for, and isn’t transparent to other members.

Should I open a dedicated band account but in my name and take income as 1099? That seems like a “right size” solution. I’ll also need to be able to report this on my personal tax forms, as well as deduct expenses. I don’t mind the extra work at tax time, but if it raises eyebrows at the IRS my wife is going to very unhappy!

Not sure if this makes sense, but I think I’m just frustrated how hard it is to have a (very) semi-pro group and not a lot of good solutions to run it responsibly. Typically I’ve always just had bands that run at a loss and get some cash at gigs. We don’t even want to take money personally here; just be able to perform and re-invest in the band.

twelvepoint wrote: Fri Dec 03, 2021 6:30 pm Have any of you all had to deal with accounting issues with your music? I’m really in a quandary here and would love some advice.

My deal is I have a group (link in signature) who play typewriters. It’s sort of a percussion ensemble meets Matmos meets The Office, which is neither here nor there. But the point is we have a lot of performances at places like museums and galleries where they need taxpayer IDs so they can write a check. It usually comes out to a few grand a year - nice on an indie level, but it's not going to change anyone's standard of living, and we just want to reinvest revenue in the band anyway.

What’s a good accounting structure for this? I considered LLC or SCorp but that seems really heavy for the amount of money we make, and the overhead is like a couple grand a year. On the other hand, putting money into one of our members’ personal accounts makes it tough to account for, and isn’t transparent to other members.

Should I open a dedicated band account but in my name and take income as 1099? That seems like a “right size” solution. I’ll also need to be able to report this on my personal tax forms, as well as deduct expenses. I don’t mind the extra work at tax time, but if it raises eyebrows at the IRS my wife is going to very unhappy!

Not sure if this makes sense, but I think I’m just frustrated how hard it is to have a (very) semi-pro group and not a lot of good solutions to run it responsibly. Typically I’ve always just had bands that run at a loss and get some cash at gigs. We don’t even want to take money personally here; just be able to perform and re-invest in the band.

My thoughts are a simple Llc with all the bandmates as members. Every cent you spend on gear, gas, practice space rent etc... keep the receipts and it will likely show that your Llc runs at a loss every year even if your band makes money, but I'm not a taxman. that's just kinda how I do it for my Llc for freelance audio work. Being the sole member/operator of my Llc, I just deposit everything into my regular checking account, but as a band with lots of members you might consider a basic business account, though those usually require keeping a balance of around $1000 in there to keep them valid. You can apply for a tax id number for your Llc if you need. For mine, I just use my SSN, but again, I'm the only person operating through mine. Definitely talk to a real Tax person before taking any of my shitty advice.

An LLC route is appealing, although in Massachusetts it’s $500 to set up and I think close to $1000 in fees annually just to keep the lights on. It’s kind of a crappy place where we have to get paid officially using a ssn or ein, but going-legit eats up a big chunk of the earnings.

The plus side of LLC is it’s fair and transparent, and as mentioned, makes deductions easy.

FM BD: It definitely is worth exploring some artist group or collective options for this. Good call. Also we are totally taking a couple of your suggestions as song titles.

Bummer, it's only a hundo a year in OR for my llc.

Kniferide wrote: Sat Dec 04, 2021 3:20 am Bummer, it's only a hundo a year in OR for my llc.

Oh yeah, that would be a much different situation for us if that were the case here.

I’m also considering setting us up as a nonprofit but I need to see if a performing arts group can do that.

Thanks Jason. I missed whatever your deleted post was.

It may be the personal account is the least worst option going forward. But we’ve had two people do that already and they hated it and it seemed a little unfair to keep passing the hot potato. I don’t want to overthink this and I really don’t want to spend a grand every year with bullshit fees just to keep the lights on, but we do need to account for (on a small scale) revenue, expenses, deductions, reimbursements. That all seems tough when it’s mixed in with my family’s checking account.

i've got nothing to add here except that the Boston Typewriter Orchestra rules.

Ryan Zepaltas wrote: Sun Dec 05, 2021 6:56 pm i've got nothing to add here except that the Boston Typewriter Orchestra rules.

Thank you!

10 or 12 years ago when my wife and I first started our record label, we filed as an LLC, opened a bank account, etc. It was really exciting. It quickly became less so. We make practically nothing, but in that first year or two it was closer to literally nothing. We realized pretty quickly that maintaining a legit LLC that makes nothing and spends a couple grand every other year was way more of a pain in the ass than it was worth. When we went to do taxes for it the first year and the accountant was just like "so...just file that you earned zero" and we had to pay for that advice, it was stupid. Then every year we would get a letter from the state threatening a fine because we hadn't declared any earnings or paid any tax to them. It sucked. We dissolved the LLC. Now I take the money we make selling records and playing shows and convert it to cash and store it in an envelope. When we need to pay for mastering or a deposit on an album or whatever I just take that amount, deposit it to my bank account, and pay the bills that way.

If we were operating on a larger scale, the LLC could have worked. And it would have been cool to see things running like a real business! But even now we bring in MAYBE a grand a year and that's nowhere close enough to make the LLC make sense. I think it all depends on how much money you're talking about, because it reaches a threshold where you can't really just stash it in an envelope or personal checking account anymore, but that threshold is gonna be different for every person (or band).

I, too, just use my social when a venue needs a W9 filled out, but we aren't making enough to raise any IRS eyebrows.

So it looks like doing an LLC or SCorp is the way forward. I don't look forward to dropping 700-1000 bucks a year just to keep the lights on, because that's a non-trivial percentage of what we make, even in the pre-pandemic era. But no one wants to have the band money fucking up their personal finances.