Alyson Miller is a CPA who provides specialized accounting and tax services to music and entertainment clients. She is the founder of Alyson Miller, CPA PLLC a rock and roll accounting, tax, and business management firm. She has years of music business experience working for both independent and internationally recognized artist and songwriters, record labels, publishing companies and music distributors.

If you’re in charge of a band and you hire musicians you need to be aware of the tax filing requirements for Form 1099-MISC. The filing deadline for the form is quickly approaching and there can be penalties if you don’t file.

The forms must be postmarked by January 31^st. Copies of the forms and a transmittal (Form 1096) must be mailed to the IRS by February 28^th.

So what is a 1099-MISC?

Form 1099-MISC is a form required by the IRS to report payments to independent contractors, such as band members that are not paid through payroll. A form must be prepared for anyone that you paid at least $600 or more in a calendar year. If the payment was made to someone who is not self-employed you do not need to prepare a form for them.

How do you prepare the form and what information is required?

Generally payments for services to band members, commissions to your manager or any other independent contractors are entered in Box 7 on the form. If you paid rent to anyone such as space rent or equipment rent the amount paid goes in Box 1. If you paid your attorney these payments would go in Box 7.

If your band is organized as a partnership or corporation a Form 1099-MISC is not required for payments made to band members. These payments are reported on a Form K-1.

You will also need the name, address, and social security number for each form. One good practice is to have everyone you pay fill out a W-9 form. The W-9 will provide you with all of the information that need for the 1099-MISC. So, before handing someone a check you should hand them a W-9 first. Have them fill it out and keep it on file.

If you don’t have the information on file it’s your responsibility to gather it. This can be a difficult task if for example your drummer quit in the middle of the year and you’re no longer in contact with him.

Where can you get a W-9?

It’s a simple form that you can get in pdf format at www.irs.gov/pub/irs-pdf/fw9.pdf. The information on this form can protect you in many ways and it saves you the hassle of tracking down the information after someone is long gone.

You’ve received some 1099’s so what do you do with them?

Venues that paid you $600 or more should send you a 1099-MISC. The 1099’s have been reported to the IRS so make sure that the information on the form is correct, especially the amount and social security number. If any of this information is incorrect contact the payer and have them reissue it. Be sure to report all income that you receive even if you don’t get a 1099.

Keep the forms that you receive to document the amounts reported on your return. They do not need to be filed with your return.

If you find the task of preparing the 1099-MISC difficult your tax preparer can complete these forms for you. Always contact your tax advisor with specific questions or advise.