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i asked an accountant’s advice
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Amy Nicole Wilson – CPA IN TRAINING
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Accountants get a reputation for being too square for the indie rock scene. Amy breaks the mould and sets the new standard for cpa’s.
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Music, gigs, merchandise … these are fun things. Receipts,
returns – no taxes will be paid at the LLC level, so you avoid
will be
taxes, 1099s … these things are less fun. However, as a band
double taxation. Meaning: more money to the bandmates
you need to deal with the finances because you are engaging
and the band, less to the government.
resence,
at men;
ome up
in a business activity. If you’re starting to book paid gigs, you are going to want to take a few steps to legitimize your band as a business entity.
You might be wondering: how in the world do I go about creating an LLC? Trust me, it is easy. First file with the state of California. Complete a form LLC-1, which can be found on
u before
Consider setting your band up as an LLC. LLC stands for
the California Secretar y of State web page. The form is short
th your
Limited Liability Company. The main legal benefit of setting
and the filing fee is a mere $75. Once this is filed you want
urt, for
up your band as an LLC is that the liability of any member of
to file a Form SS-4 with the IRS, which is an application for a
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the band will be limited to the assets actually in the entity.
tax identification number. You can use this tax ID when, for
ur case
Meaning: you can’t lose your house if the band gets sued.
paid gigs, you are asked to complete a Form W-9. Now that
er man’s
There are also various tax benefits to the LLC. The income of
you have a valid business entity you can report the income
ame you
the entity will be split based on the ownership percentages
on the W9 of your band, NOT your bandmates personal
tation.
of the bandmates, and will f low through their respective tax
social security numbers!
072 PLUG-IN - STEP 4