Huge Changes to Gig Payment

Rayneman said:
From my experience, and I do not manage this aspect of our band's stuff in any way, it depends on the venue. We play some bars that are happy to pull out a sheaf of cash from somewhere at the end of the night, while others pay by check, and I suppose even others via some electronic method that I don't see. We've gotten 1099's from our band leader a couple years, but at some point he (or his tax guy) figured how to deal with that. This is not to say we are some highly-paid show band, but rather your average bar cover band that also gets some private/corporate events that do end up paying higher amounts.
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Since the 90's I have watched more and more venues move to checks. Cash is now the exception rather than the rule. What I won't do is paypal/venmo/zelle gigs, ever. Even in a cash situation the venue could be audited and when the books are gone through it could come back to bite someone in the ass if they didn't report but the venue did report who the cash was paid over to. Notice some of the cash gigs still have you sign either W9's or just a receipt of payment so there is the paper trail.

I am the bandleader but the drummer does the booking and runs the books and we all get 1099'ed by him at the end of the year. Not sure how your band leader covers that because technically he would be on the hook for taxes on all the profits if he isn't 1099'ing you. Maybe he's a gear junkie and has enough write offs to cover it all once the filing is done with. Or he has money and doesn't give a crap and just wants a band. Or you guys aren't making jack. Not sure how he figured that one out but I would definitely do a CYA and know what's going on.
 
GJgo said:
While we're here.. Anyone who pays more than $600 in a year is supposed to 1099 the payee, that's been on the books forever. When was the last time anyone here got 1099d for gigs?
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We have that with casino gigs, usually $1600-1800 for a Friday/Saturday engagement. Whichever one of us signs the contract ends up with a 1099. It's possible though that it's SOP for the casino to 1099 any contract employee, regardless of dollar amount. It wouldn't surprise me anyway.

Beyond that though, never. We're in the regular rotation at a couple places, and it's always cash, no 1099. I have no idea though how they're recording that on their end. I always kinda figured that cash for pay was just taken off the top of sales to decrease what they'd have to report as revenue, rather than reporting full sales and then recording the entertainment expenditure separately.
 
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MusicIsLife said:
I have no idea though how they're recording that on their end. I always kinda figured that cash for pay was just taken off the top of sales to decrease what they'd have to report as revenue, rather than reporting full sales and then recording the entertainment expenditure separately.
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This is quite possible but I wouldn't bank on it making you IRS-proof if you aren't reporting. I know two musicians who avoided reporting for many years who are on the hook now for many years to come. When you get into that 50-60k range and aren't reporting you are asking for serious problems down the road. They are lucky they didn't do time....

Beyond Black said:
With my cash earned to cash spent on gear ratio, those assholes will owe me thousands…
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Only about 10 percent of equipment costs are applied towards knocking down your taxes if you are filing. Spend 3500 bucks and it'll knock about 350 bucks off the taxes, roughly. If you really want to knock your bill down keep exacting records of your mileage on your gig vehicle, plus any repairs, and and all parking and gas receipts. The current deduction is like 59 cents per mile or somewhere in that neighborhood. In 2018 I put about 21,000 miles on my rig going back and forth to Austin, plus had about 2k worth of parking receipts which ultimately prevented me from being completely hosed on the tax bill at the end of the year.

I spoke to my old man this morning who is a retired CPA. He's not current but I asked him to check in to tall of this and give me his opinion. He too thinks it won't amount to a hill of beans but he's going to have a look anyways. He mainly thinks it's about bigger employers who are bucking the system by claiming their workers are independent contractors. It saves them money and they can avoid paying OT and other stuff to the people doing the work. I'll report back what, if anything, he has to say about it but I don't think his opinion will change much.
 
SpiderWars said:
So bands must get at least minimum wage now? That’s a pretty big raise for some places.
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Probably means they will replace the band with robots like they are doing at McDonalds.
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MusicIsLife said:
We have that with casino gigs, usually $1600-1800 for a Friday/Saturday engagement. Whichever one of us signs the contract ends up with a 1099. It's possible though that it's SOP for the casino to 1099 any contract employee, regardless of dollar amount. It wouldn't surprise me anyway.

Beyond that though, never. We're in the regular rotation at a couple places, and it's always cash, no 1099. I have no idea though how they're recording that on their end. I always kinda figured that cash for pay was just taken off the top of sales to decrease what they'd have to report as revenue, rather than reporting full sales and then recording the entertainment expenditure separately.
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That makes sense. Casinos and other large venues--especially ones that are subsidiaries of larger corporations--need to keep their books/records square and they need to be able to account and track every dollar. This would be for internal risk control purposes but also for external audit purposes.

Independent clubs and dive bars are a different world. They are primarily cash businesses that undoubtedly have a regular skim operation where cash comes off the top of the till every night. Some of it goes to pay under-the-table help (including bands) and most of it goes right into the pocket of the owner.
 
JackTripper said:
Independent clubs and dive bars are a different world. They are primarily cash businesses that undoubtedly have a regular skim operation where cash comes off the top of the till every night. Some of it goes to pay under-the-table help (including bands) and most of it goes right into the pocket of the owner.
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Having worked as an "independent contractor" outside of the music realm many years ago (the "tool" I provided was a pen) is that these types of establishments are only reporting credit card sales. This is why the gov wants to eliminate cash because then every red cent can be extracted from you immediately instead of businesses hiding the cash and actually getting ahead. This is why construction, music, night clubs and other businesses are so often used as fronts to launder money and are full of corruption and criminal types. It's too tough for anyone to monitor the cash so it can be hidden, laundered, moved around and the books made to look legitimate.
 
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