The members of the band. How to file taxes?


Q. My husband launched a band last year. He spends hours visiting bars and restaurants to get us gigs, and we have laid out some money for advertising. The band practices weekly in our home. When we get paid I report everyone’s income as a contractor, and will file 1099-MISC for each band member. We both play in the bank, and as musicians we have expenses for personal instruments and equipment. On paper I’m keeping two sets of “books” so the band’s income can be clearly shown to the band members. But when I file my Schedule C at the end of the year, can I fold all the expenses into one form or do I need to file two separate ones (one for John Smith dba The Band as manager/promoter and another for us as performers)?
— Rock star

A. This is the kind of issue where you may want to sit down with a tax preparer to make sure all the circumstances are considered.

But based on the facts you provided, it sounds like the two types of income -promoter and performer – are interconnected and really part of one business, said Howard Hook, a certified financial planner and certified public accountant with EKS Associates in Princeton.

“Therefore, I don’t think you need to file a separate Schedule C for the promoter and one as a performer,” Hook said.

But, he said, there are two caveats.

He said you may need to file a separate Schedule C for each of you if you both are earning income from the business. That’s because Schedule C is for an individual and not filed jointly.

“You also may want to file a separate Schedule C if you are promoting other bands besides your own,’ he said. “Keeping track of expenses would be easier in that case and if the other income is material amount it would truly rise to the level of a separate business.”

Email your questions to moc.p1563744180leHye1563744180noMJN1563744180@ksA1563744180.