Join Richard Stim for an in-depth discussion in this video Income, part of Taxes and Accounting for Music.
- Here's a look at the three major IRS forms…that are used to report music income.…Form 1099 MISC is issued by a company or induvidual…to a self employed musician, who in the previous year,…earned at least 600 dollars…or to a musician who has earned at least 10 dollars…in royalties.…If you pay someone at least 600 dollars for services,…you must prepare and send a 1099 MISC to that person…by January 31st, and you must send a form 1096…and copies of the 1099 to the IRS before February 28th.…
There are software programs and online services…that can assist you when preparing 1099s.…You do not have to issue a 1099 MISC…if you paid the individuals via credit card, gift card…or PayPal, or if you are paying for services…that were rendered by an LLC or corporation.…Form 1065B/Schedule K-1 is completed by a partnership…to report each partners share of the partnership's income,…deductions, credits, etcetera. Most bands or partnerships…use this form to report income and band expenses.…
The partnership must also provide the Schedule K-1…
In this music business course, author Rich Stim covers the most important tax issues for musicians. He starts with the basics: determining if music is a hobby or a business for you and how that affects your deductions. He then discusses money and the sources that determine gross income. From there, he shows the items you can deduct from your gross income—mileage, studio spaces, touring expenses, and other miscellaneous deductions—that can add up to big savings. Next, he covers the different tax rules for individual musicians, bands, general partnerships, LLCs, and corporations, and explains how to get an Employer Identification Number (EIN) when you need one. Finally, Rich navigates through the tax forms, including Form 1040, Schedule A, Schedule C, Schedule SE, Schedule K-1 (Form 1065), Form 4562, Form 8829, and Form 2016, and provides advice on hiring a tax preparer or going the DIY route with tax software.
DISCLAIMER: This course is taught by an attorney (or other instructor) and addresses US law concepts that may not apply in all countries. Neither LinkedIn (including Lynda.com) nor the instructor represents you and they are not giving legal advice. The information conveyed through this course is akin to a college or law school course; it is not intended to give legal advice, but instead to communicate information to help viewers understand the basics of the topic presented. The views (and legal interpretations) presented in this course do not necessarily represent the views of LinkedIn or Lynda.com.
- Managing bookkeeping
- Counting income
- Claiming expenses and other deductions
- Understanding tax entities such as LLCs
- Getting an employer ID number
- Preparing and paying taxes