[Dixielandjazz] TAXES AND 1099's

[Larry Walton Entertainment - St. Louis]

One of the guys that I work for requires that I sign a subcontractor's 
agreement that spells out what is expected.

Too bad a lot of musicians who want the money don't understand that anytime 
you exchange money it's called A BUSINESS and the IRS like an agent wants 
their cut.

I have told this story before but since it's tax time ---- There is a 
restaurant/bar here that got a deal with the union to put a big band in and 
pay the guys $15 (now raised to $20)  They paid the guys cash each night. 
No one kept records in the band.  Then the Restaurant handed the leader an 
$18,000 1099.  Fortunately the guys in the band for the most part cooperated 
and he was able to get most of the records but then since it was a union 
thing there was SS tax and city taxes that hadn't been paid.  It was a real 
nightmare.

Take my advice - don't be stupid.

Actually I'm glad because it eliminates from most of my jobs the guys that 
are trying to fly under the radar.  All of the places that I work demand 
that I do the paperwork so that they can deduct me.
Larry Walton
St. Louis
----- Original Message ----- 
From: <Custode at aol.com>
To: <Talegatorz at aol.com>; <dixielandjazz at ml.islandnet.com>
Sent: Monday, February 20, 2006 6:12 PM
Subject: Re: [Dixielandjazz] TAXES AND 1099's


>
>
> 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
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