[Dixielandjazz] 1099's

Tue Feb 21 15:15:14 PST 2006

Well that's not entirely true.  Every so often the IRS likes to make an 
example of someone.  Admittedly it's been a long time but the IRS came down 
on some guys about 30 years ago here.  It was all nickel and dime stuff.  I 
had a singer that got her dresses disallowed because they could be worn for 
other things.  She should have taken 90% of the items which allows for 
personal use.

It's a good idea to call a tux a uniform.  The uniforms are deductible but 
Tuxes have other uses and may not be deductible depending on how hard ass 
the auditor wants to be.  Technically you need to have the band name or 
leaders name on the tux or dress like the guys at Joe's garage have Joe's 
garage or their name on the shirts.  For that they don't call you in they 
write you a nastygram telling you something is disallowed and remove it from 
your refund if any or send you a bill.  Over the years I have gotten a few 
nastygrams from the IRS disallowing something but not since I started to use 
a computer to do my taxes and since I started calling Tuxes uniforms..

It's true that they don't get much from the little guys but in a closed 
community like musicians one hit is equivalent to shaking the money tree 
because word gets around.

Personally I'm not too worried because I claim everything and take my 
deductions and It comes out OK for me.  I even claim the few cash jobs and 
the reason is that leaders that pay cash are the same ones that will end up 
getting audited because of their strange business practices.  It usually 
doesn't amount to much and the IRS knows that this can be a cash business so 
there could be an audit.  There is always the possibility that a rival band 
leader might report you or someone you work for to the IRS for taking cash 
under the table.

Many years ago band leaders regularly gave a discount for cash.  Today they 
don't directly solicit cash but say you can put it on Master Card but I'll 
give you the three percent that I have to pay if you give me cash or a 
personal check.  That's $18 for a $600 gig and no taxes.

All in all I really don't worry about it and I don't think you have to 
unless you are being a little free with the books.
Larry
St. Louis
----- Original Message ----- 
From: "Steve barbone" <barbonestreet at earthlink.net>
To: "DJML" <dixielandjazz at ml.islandnet.com>
Sent: Tuesday, February 21, 2006 11:54 AM
Subject: [Dixielandjazz] 1099's

> If, for example, you run a 15 piece band and the total band income you
> report is less than $20,000, you should have absolutely no trouble at all
> zeroing out to no taxable income whether or not you issue 1099's to the
> members.
>
> Possible Schedule C deductions include:
>
> 15 men at $550 per man per year =   $  8250 in salary deductions.
>
> Office in Home deduction of at least$  3500
>
> Mileage expenses of at least        $  4000
>
> Expenses/supplies at least          $  2000
>
> Depreciation incl.  sec 179         $  1500
>
> Entertainment                       $   250
>
> Uniforms etc.                       $   500
>
> TOTAL Expenses                      $20,000
>
> Taxable music income -0- with no need to file 1099's on anyone.
>
> Just one possible scenario. In most cases such as the above, the IRS has
> bigger fish to fry than sticking you with a tax tab of a few thousand
> dollars. Unless they can justify their own time/money spent on the case,
> they do not bother with us small fry.
>
> On the other hand, if you have a five piece band and one major employer,
> that you do 100 gigs for e.g. Showboat Casino, you are going to get one 
> HUGE
> SIX FIGURE 1099. In that case, you better damn well issue 1099's to the 
> band
> members. This is never any trouble as the guys all are very glad to be
> working steady and they have similar write-offs to the above, excepting 
> the
> salary deduction.
>
> Cheers,
> Steve
>
>
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