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getting legal
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Author:  Randy J [ Sat Aug 16, 2008 9:37 am ]
Post subject:  getting legal
I'm just working by myself, couple of gigs, so it's tempting to just work under the table. But it seems like a good idea to get a business licence, pay taxes, get General Liability coverage, etc.

Care to comment? Words of wisdom? (particularly interested in Washington State)

LLC? Sole Proprietor? Have a lawyer set it up? Do your own taxes?
Author:  Flipper [ Sat Aug 16, 2008 10:22 am ]
Post subject:  Re: getting legal
If you are only doing a couple of gigs and you are the only one doing them I would not hassle with the business license.

As far as taxes you can use your SSN and do not have to establish a federal tax identification number. If you want Federal Tax ID# then you have to get a business license etc.

Washington State Sales Tax - I believe that you must charge a sales tax on any private gig you do for hire. The bar gigs are considered ordinary income but a private function is considered subject to sales tax. Check with WA State on this. If so then you need a UBI number and that requires a business license and a business license requires a federal tax ID number.

There are two basic ways to handle it:

1. you can have the bar treat you like an subcontractor but withhold taxes like any W2 employee and you can still have all your write-offs. This is the way I choose to do it and it works best for me.

OR

2. you can have the bar treat you as a subcontractor and 1099 you at the end of the year. This works great if you can put enough away each month for taxes. Eventually you will have to pay quarterly taxes if the IRS deems it necessary. I started out this way but did not want to deal with the Quarterly Reports and payments. This is why I chose option #1. Of course you have all your write offs as well.


If you choose to work under the table just understand that you will eventually get caught. If the bar you are working for gets Audited for whatever reason and the owner is writing off entertainment as an expense or you show up in his books anywhere at all the IRS will want to know who you are and will investigate to see if you reported those earnings on your tax returns, that is standard procedure in their auditing process. They catch plenty of under the table entertainers this way.

In the long run it is better to report your income and pay your taxes. If they catch up with you later it will be a very uncomfortable experience. I have had a few fellow KJ's get caught and let's just say they will never do it again.
Author:  mckyj57 [ Sat Aug 16, 2008 10:34 am ]
Post subject:  Re: getting legal
Must be another world there compared to the Midwest. Business license? Never heard of such a thing a least for a sole proprietorship.

Taxes? Unless you have employees you don't need workman's comp. Uncle Sugar is going to get upset if you have any significant income (i.e. $10,000 per year) that you didn't pay estimated on the second year. But you usually get a one-year pass on that.

It seems a bit extreme to incorporate. A little bit of liability may be in order, but that should be minimal with a large deductible. I can't envision a lawsuit for anything other than personal injury that could encompass more than a couple thousand damages. And the venue owner is really responsible unless you are super-negligent. In short, you are unlikely to lose your house.

If you carry disks, it would be a good idea to get some insurance to cover theft.

I would think you could continue to wing it. But of course IANAL and YMMV. 8-)
Author:  Dr Fred [ Sun Aug 17, 2008 10:32 am ]
Post subject:  Re: getting legal
Not realy too difficult as far as my taxes as a part time dj.

I just kept a list of my expenses, (songs, software, PA etc) and they were far more than my cost for the first year.

It was just a couple of lines on my federal taxes and they canceled out (I lost money my first year as will be expected with any serious setup and part time activity as a kJ)..

Net cost 0 and only a few hours book keeping to be legal from the tax point of view (as far as I can tell).
Author:  supercharged [ Sun Aug 17, 2008 12:54 pm ]
Post subject:  Re: getting legal
I run it as a hobby. I keep track of most major expences, I end up making a small profit, but have the max withholding at my job so it ends up being covered and I dont end up paying in at tax time. next year i may set it up as a buisness as i expect to make more and spend less.
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