Join Richard Stim for an in-depth discussion in this video Payroll and sales tax, part of Music Taxes and Accounting.
- Besides income taxes,…there are two additional tax concerns for musicians.…Payroll taxes.…If your music business has employees,…you need to calculate, track,…and record payroll taxes…and the resulting deductions.…Based on the employee's W-4,…you are required to withhold state and federal income taxes,…as well as Social Security and Medicare taxes.…If you don't want the hassle,…consider an online payroll service,…such as Paychex or QuickBooks Payroll Services.…
Sales tax.…You must collect and pay sales tax…if you're selling goods or merchandise…directly to consumers in your state.…Typically, if you reside in an area with sales tax,…a sales tax jurisdiction,…you will need a permit from the state or local government.…Known as the resale or seller's permit.…For assistance with sales tax in your state,…check out the Sales Tax Institute,…salestaxinstitute.com…
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