[Dixielandjazz] The IRS...

Mon Feb 20 07:27:33 PST 2006

Yes I file 1099's on the guys that work for me who make more than $600. 
Unless it's changed that's the cut off dollar amount for sending a 1099. 
This is an advantage for them in that they can take deductions like any 
other business for related expenses.  This can be a lot for a musician due 
to the mileage and other sometimes large deductions that can be made.  For 
example writing off a $5000 horn gets you back about 1/3-1/2 of it whereas a 
employee gets to suck eggs pretty much and the employee is really paying the 
same SS tax anyway.  While it's true that the employer pays the 7.5% it 
really comes out of the money he could pay to his employee.  So you have to 
figure 15% SS tax and depending on your tax level about 25% fed tax and here 
in Missouri it's 6% state tax.  That adds up to about 46% tax which depends 
on if your state allows a federal deduction or not so it might be a little 
less but even a 30% tax is a lot which the employee can't tap into but a 
subcontractor can.  You should review the subcontractor rules.  There are a 
bunch of guidelines as to what is and is not a subcontractor vs. employee.

If the musician works only for you and not other bands he may be considered 
by the IRS as an employee.

There are other ramifications too such as paying workman's comp to the state 
and St. Louis has a 1/2 % tax if you work in the city.  This one is usually 
so little that it doesn't amount to much but the paperwork is a pain.  It's 
small until you find out they have issued a court summons for not paying the 
dammed thing.  They actually got a warrant to arrest me for less than $15 
that I didn't owe.  It took a half a day to convince them that I was a St. 
Louis county resident and the business had been moved out of the city.  What 
a pain.

Re Business license:  No.  I would have one except that I already run one 
business out of my home and the city I live in only allows one business to 
be operated out of a home.  Since I don't collect sales tax on the band it 
flies under the radar of the city also my band name is not registered ( 
fictitious business name or DBA) with the state which keeps it off the local 
government radar however, it is registered with the feds and state tax 
people.  The State DBA registration is how they found me for the local 
business tax.

I file my Fed and State taxes as a sole proprietor.
----- Original Message ----- 
From: "Bob Romans" <cellblk7 at comcast.net>
To: <dixielandjazz at ml.islandnet.com>
Sent: Sunday, February 19, 2006 1:00 PM
Subject: [Dixielandjazz] The IRS...

Just curious to find out how other band leaders file your taxes...do you 
have a business license?
Do you 1099 to your band members?
Warm regards,
Bob Romans,
Cell Block 7 Jazz Band
1617 Lakeshore Dr.
Lodi, Ca. 95242
209-339-4676
www.cellblockseven2002.net
Cell 209-747-1148
Because I play trumpet, I envy no one.
""""""""""""""""""""""""""""""""""""""""
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