An Artists Guid…
An Artists Guide to 2012 Financial Preparation
2011 is wrapping up and those cold, slow winter months often end up being less full of gigs as everyone prepares for the holidays. “So how do I squeeze the most productivity out of December and prepare myself or my band for a big year in 2012,” you may ask? Well, we’ve put together a list to help you get organized and ready to tackle the year with a running start.
Tax Preparation – Though “taxes” may be among the most dreaded words in any language, there’s nothing worse than ignoring the tax man until he comes after you for big bucks (or at least more than you should have to pay). Here are a few things to get lined up to make tax season less painful.
1) Organize your receipts – There are a number of different ways you can reduce your tax liability. One is keeping close records of expenses that are “ordinary and necessary” for the production of income in your chosen business. Here are a few things to track: gas, hotel, food(you can write off 50%), van rental, gear related expenses(up to $100,000 per year), cell phone use dedicated to business
2) Keep track of your income sources – digital downloads, record sales, merch sales, performance money, licensing money.
3) Get Quickbooks software and use it! Make sure to separate business from personal expenses
4) Get band checking account and debit/credit card
5) Create a business entity – LLC, S-Corp, C-Corp, or Sole Proprietorship – contact the MRC if you need a basic explanation on these. LLC is usually the safest and best bet for touring bands.
6) Have Show reconciliation sheet from the club signed by the manager that also shows your merch sales for the night. Sometimes an auditor will check these and match with a W9
7) Work on a budget for 2012 based on your numbers from 2011
8) Collect info on your 1099 contractors you have paid over $600 to in a calendar year. They must be mailed by Jan 31st!
9) Designate someone to be in charge of the bands finances. Ideally, that person is a business manager and/or CPA. At the least, one of you should be able to manage the Quickbooks and then hire a CPA to handle taxes at the end of the year. If you keep good records, the cost should not be high. You can also consider paying your taxes quarterly.
10) Get a book for Christmas to read while sitting next to the fire, something like: “Confessions of a Record Producer” by Moses Avalon, “Tour Smart: Break the Band” by Martin Atkins or “Money Music and Success” by Jeff Brabec