posted
I was talking to this KJ about how much his new gig was going to be paying him... and I just had to ask, "So, do you pay income taxes on all this?"
After laughing for awhile, he told me that his gigs are all paid under-the-table. Then, he claims that he writes-off his CDG's and equipment. Basically, he's making a fortune.
Hmm... sounds like a nice way to make a living, sleeping all day and rockin' all night. Now, I'm sure no one here would personally admit it (if they can find the Melissa virus writer, they'd find you too), but do you know if it's customary for KJ's to not report their income from their shows?
Could you claim regular CDs, stereos, portable MP3 players, and other miscellaneous musical-related items as business expenses, even though they're not related directly to Karaoke... claming you're in the entertainment business, and this stuff is research equipment needed to determine what CDGs you want to buy, etc.?
[This message has been edited by Grateful (edited August 23, 2000).]
Posts: 1487 | From: Irvine, CA, USA | Registered: Jun 1999
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posted
While not paying self employment taxes is as illegal as hell (and don't get me started on the fact that the income tax laws are illegal to begin with, that's another story), you can count just about anything as a business expense, even if it's not related to karaoke. You could be buying it (regular music) as an expansion into DJ'ing (which you may never do, but you have the ability to do so if you're buying music). You can deduct voice training, it's a professional aid. If you buy a van and use it for your transportation from venue to venue, you can write it off (some restrictions apply). There's all kinds of crap you can legally do.
posted
As much as I realize that as the documents are worded, "income tax" is illegal. However, that being said, I also see that the Government (as utterly f*cked up as it is) needs to be supported somehow. Might as well be a tax based on a portion of my income.
So, I pay taxes on my income, income as defined by my primary job.
Anything I do on the side is not the government's concern so long as it isn't immoral or fattening.
Bingo! you hit it on the head. I would be interested in how many KJ's actually do report their income much less their expenses.
If a KJ is just working for a company in that capacity (as an independent contractor) and reports his/her income, then a deduction for mileage is fine. You must use a mileage log book however and you'll find that it's your largest deduction.
If you don't report your income good luck trying to get a loan and explain your deductions with no income.
We report our income and we take all the deductions right down to cords and request slips. Personally, I wouldn't mind having to pay a million bucks in taxes because that means I'm making around 5 million.
If a KJ really keeps track of their expenses, they'd be surprised how little in taxes they would have to pay. (not to mention how much they're really NOT making)
And you can always find ways to avoid (not evade) paying taxes altogether. For example: calculate your tax liability before Dec. 31st... if you would have to pay $1,000.00 then buy a grand worth of new equipment and expense it off. It beats giving the bucks to Uncle Sam and it's perfectly legal.
"Did ya' hear the one about the KJ who drives a Porche paid for with cash but can't buy house?"
[This message has been edited by Chip (edited August 24, 2000).]
posted
Hey Chip, I am fairly new to the business, I was wondering if you depreciate equipment over several years, or deduct as an expense in one year. How is the best way to do this. Things like songbooks and cables and request slips should probably be deducted as expense, but not sure what to do about discs and equipment.
Posts: 70 | From: Clark, SD, USA | Registered: Mar 2000
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posted
A friend of mine tried to deduct her "costumes" that she wore solely for her shows - this is not allowed. If the clothing has any (ANY) possible use outside of the shows (like fancy balls or weddings - even if you never go to them), they are not allowable. She got audited and had to pay back taxes on her "costumes". For some reason after that she started wearing street clothes to her gigs. I really wonder how theaters and actors deal with this provision. Man, if only I could deduct my dry cleaning expenses, about $40 a month (show clothes that I don't wear anywhere else). Then again I think I would be in fat city if they let me deduct all my working clothes, since clothes are my second hobby.
How does one deduct expenses from no income???
Hey, I did buy a house - that's what I get for reporting my self employment income. (Getting loans is very tricky when self employed - it was a real pain). I even had to supply my bank statements along with the income tax records, just to show they matched.
posted
We report our income AND of course our expenses. We use the option of deducting capital expenses up-front instead of depreciation...it's less complicated. We have yet to make any profit on this business, all the income makes equipment purchases/upgrades possible. I would strongly suggest if this is your only business, you get a professional tax person to set you up!!
Posts: 74 | From: Orlando, Florida | Registered: Apr 1999
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