[Dixielandjazz] TAXES AND 1099's

[Custode at aol.com]

In a message dated 2/20/2006 5:51:19 P.M. Eastern Standard Time,  
Talegatorz at aol.com writes:

I report  my 
income on a Schedule C short form since there is no inventory involved.  I 
tell 
those working for me that what they choose to do is their own  business. 
However, I 
report all my income and if  I'm ever audited, I  will have no coice but to 
show the taxman what I paid out and to whom.  

I am curious...when you report your income, do you also show  disbursements?  
Case in point...if your total receipts are $15,000 and you  pay out $10,000 
to fellow band members, you should only be paying income tax on  $5,000 (not on 
the $15k total).
 
Also, you are required by the IRS to send a 1099-Misc Form to anybody  
earning $600+ per year.  Failure to do so would be in violation of the  Internal 
Revenue Code and result in substantial penalties.
 
It is a good idea to do both: file a schedule C, and send 1099 Misc  Forms.
Let your fellow band members know that you are running a  business.  If they 
don't understand, find musicians who  will.  And, if you are the one getting 
all the work, and having to  report the income on your tax return, there will 
be no problem in finding  eager musicians ready to work.  Especially in today's 
market.  

 
Lewis D.  Custode, Jr., CLU, ChFC, CASL
Trumpet/Vocals: Bar-room  Buzzards
Buffalo, NY