I went to the IRS open house on Sat. and they told me I need to talk to a CPA because since it was my "fist year," there was a lot of tax breaks I could get. But that made me think, does that mean I have to register my self as a legit business? If so, than I'll have to get a tax license and all that BS, but than I can write off a lot!

What do you think? Do I need to register as a business, or should I just do my taxes and add a 1099? If you registered your self as a business, did you registered it as your DJ/Producer name or did you make up a company? Why?

One interesting thing the IRS told me was that because I was basically the employer and the employee, I would pay certain taxes twice.

All this shit is kinda confusing cuz I have no clue what I'm doing. I think I might go to the chamber of commerce this week and ask for help.

almost all the big guys set themselves up as corps (s-corp would be the best imo), you only making 10k probably isn't worth it. Seriously print out your bank statements from Jan 2010 - Dec 2010. Highlight all the purchases that might even remotely be related to your DJ/Production career (see my previous posts for examples). Add that up and see how it weighs against your 10k, I'm willing to bet you're at a break even.

Personally I spent $1,812 just in music/mp3/cd purchases JUST in 2010, almost $2,000 in hotels, $2,000 in travel(train/airfaire/cabs), more in software, synths + more.

quote:

Originally posted by DjWoody I went to the IRS open house on Sat. and they told me I need to talk to a CPA because since it was my "fist year," there was a lot of tax breaks I could get. But that made me think, does that mean I have to register my self as a legit business? If so, than I'll have to get a tax license and all that BS, but than I can write off a lot! What do you think? Do I need to register as a business, or should I just do my taxes and add a 1099? If you registered your self as a business, did you registered it as your DJ/Producer name or did you make up a company? Why? One interesting thing the IRS told me was that because I was basically the employer and the employee, I would pay certain taxes twice. All this shit is kinda confusing cuz I have no clue what I'm doing. I think I might go to the chamber of commerce this week and ask for help.

anything you do now ie register as a business will not count for last year. Well pretty sure anyways.

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quote:

Originally posted by Looney4Clooney anything you do now ie register as a business will not count for last year. Well pretty sure anyways.

It won't. But because I'm still DJ'ing and I'm still getting paid by the same venues, it will count towards next year.

That's not right. There are way to bring losses (expenditure) forward, essentially in anticipation of "starting a business", even if revenue is generated during that period. You can't backdate the founding of a business, it's founded when it's founded, and the article of organisation will state so. So you can't backdate the "benefits" of a company, but you can bring the losses forward if needed.

It actually doesn't matter anyway, because you're a sole proprietor or going to be a sole member LLC - either way the taxes are reported on your personal schedule, so it really doesn't matter how you do it.

The main advantage of filing as an S-corp is that you pay taxes on net, not gross, revenue but even that is not really a consideration for you as your revenue is so low that you expenditure will wash it anyway if you're smart.

You really should found a company though, preferably a sole member LLC if you can, as it will mean that if you ever get in to a legal dispute or put on a night or someone tries to sue you, you can have the protection of a corporation, whilst having the flexibility of a sole proprietor.

Couple of things to watch out for though:

1, You'll have to pay $800 a year just for the LLC renewal.
2, It costs way more to file your taxes (at least $500+) as opposed to a couple of hundred at most for personal returns.
3, You can't do silly things with transactions, like withdraw cash from the company account without invoices or payroll receipts.
4, You'll need to setup an LLC in the first place, which even if you use one of the crap services like legalzoom will cost you $800, or $1200 if you do it properly with a lawyer (highly recommended).

My advice is that if you're ever going to promote your own nights, increase business revenue, get involved with contracted work, sign a lease for business premises, or do anything where you're at risk if it goes wrong, then found a company and do it right. California is a litigious society and don't take any chance.

If you're just going to make $10k and play a few gigs and not take it further, then just keep it simple and file personal taxes.