Karaoke Forums

Just would like to know how many of you kjs have a business license or is one even required in your city. Is it necessary to have one? Would it help if you have one?? Do any bars that you have played in require one or are you just a subcontractor to them?? Thanks for any info!!!

i've never had a business license for karaoke.

depending on how are you are into your "career" as a kj, you may want to wait awhile.  you could use a doing business as (dba).  in texas, it's only like fifteen dollars.

if you want a tax id, you can go online and get one.  they don't cost anything.

the choice is yours how you want to handle this.  if you're looking at it as full time then you may want to do a dba with a tax id number.  just be careful and keep real good records for the tax man.

as far as being required, nope.

if at all possible, you should have some time of contract with the owner of the establishment with everything spelled out.  but even then, i don't believe most kj's have one.

you are your employee if you are using your own equipment, but you are the owner's employee if you are using theirs

so many scenario's.  use your judgement and go with your gut.  it takes practice to get good at negotiating.  the biggest mistake people do is sell themselves short.

remember, you are selling a service and your knowledge.

hope this helped.

(honestly i think i just confused the heck out of myself!!)

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It would depend.  Are you a sole proprietor, a partnership or a limited/incorporated company.  Each of these have different rules and personal liabilities.  In most jurisdictions sole proprietors and partnerships are personally responsible for their businesses while limited/incorporated companies are their own entities where you have no personal liabilities (unless there is a criminal action, ie Enron).

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Okay, my knowledge comes from operating a home-based aromatherapy compnay, so it may or may not translate to karaoke, but here goes:

IMHO incorporation is more than likely not going to be the way to go at this point. You will protect your personal assets against liability but quadruple your hassles. If you are worried about liability in a service profession (which is bascially what karaoke is) I would look into insurance. If your gool ol' insurance agent does not handle the appropriate coverage, they should be able to give you a reference. Or ask around.

I would get a DBA (from the County Clerk's office in probably every state) unless you are an employee (you have filled out an W-4 at the bar).

Tax number may or may not help; in Texas the only things non-taxable are items used in the mnaufacture of a product to be sold or items purchased for resale. If you hire employees (possibly if you hire contract labor; I do not know) you will ned an employer ID. I have no employees so I have not looked into this.

If you have any sort of office or studio at home, check with your city government to see if you are required to have a home-based business licesne. My guess would be that you do not.

The bar owner will be required to provide you a 1099 if you are a contractor and earned over...$500 maybe? I got no clue but irs.gov probably will tell you...working for him. Keep meticulous records and maybe even provide him invoices or monthly statements. If he is paying you in cash, I would quite frankly find out if he intends to pay you under the table (not unheard of) and make your own decisions based on that knowledge. I offer neither advice nor opinion on that scenario, except to say if one of you says you get income from the place and the other one says you don't there could be problems.

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This brings up a lot of matters.     If you're with the I.R.S., .....I'm screwed.    LMAO

1. This is a cash business 99.9% of the time.   Enough said.  

2.  If you get a tax ID # you will have to do your taxes every 3 months.   This sucks.
   You will have to pay the taxes every 3 months.   If you don't, you will pay penalty and interest.   There is no reason I can think of to have a tax number.

3.   If they are going to give you a 1099, or they pay by check.   You need to think about some things.
  a.  If you get checks made out to you, you need a business account.   Hassle.
  b. Without a business account, get the checks made out in your name, not business name.   Then you can cash them without the business account.
  c.   Checks are marked with routing numbers at the place of deposit.    They are traceable.  
  d.  1099s are traceable and turned into the feds by the person giving it to you.
       Always claim a 1099 on your taxes.    You may want to work a deal out with the person for a cash payment....   Did I say that?

4.  Are you going to run a legal business.   Don't answer that question on here.   Just answer in your head.   NOBODY NEEDS TO KNOW THE ANSWER.

5.   I have a great tax guy.     Enough said.

6.   Tax man advice.    Everything business related always write a check.    If it's personal, use cash.    The feds look at the total money deposited in the bank, if and when you ever get audited.     So your spending better equal your income.    Enough said.     The first thing he wants to know each year is my total deposits.  Then he works the numbers backwards.    

7.   If you have employees, legally then you must take out federal tax, state tax, social security, and workmans comp, etc.   If you do not take out workmans comp and they have an accident, and you get caught, it's a $10,000 fine for each employee not covered.     I always had a one man business.   Enough said.

8.  Every township or boro or city has it's own rules for work permits or what have you.    I have not had an issue or need for one in 14 years.   Don't get anything you don't need, until you need it.     Keep a low profile.   Enough said.

9.   Keep all of your receipts for everything business.   Gasoline, too

10.   Read the rules for home office deductions.   The total square feet of the office determines the % amount of all of your utilities that can be deducted for office operations.   If your office space is 20% of the total square feet of the house, then you deduct 20% of all of your utilities.    It can be a bedroom or part of the cellar, but it can't have a bed or a washer & dryer in it.   Office means business & office stuff, only.

11.   Incorporation has a whole set of rules that must be followed.  $700-1000 to incorporate.    It does eliminate liability as far as someone suing you.  Only business assets can be lost, nothing personal.   Read the rules carefully before doing it.     I'm a sole proprietorship.

12.   ERIE insurance has coverage for the equipment and liability.   [highlight=crimson]This is not an advertisement or indorsement.[/highlight]   It's just who I have.

13.   Vehicles (strictly for business use & partial business use), gas, insurance, repairs (vehicle & equipment), plates, equipment, discs, turnpike fees, parking fees, car wash fees, cell phone, business phone, office equipment, (computers, copier, printer, laminator, desk, chair, fax) office supplies, Internet connection & monthly fees, % of Water, sewer, heating, garbage, electric, interest on any business loans, and credit cards & credit card fees, used for business..... OH yeah.

Thanks for all the answers!!  So I take it that I dont need a tax number or a business license to do karaoke in bars. I have been getting a 1099 from the club. But I always listed the income under other income on my tax return. I never deducted anything as a business expense. Was I stupid?? I am not to experienced in the business side of doing music. I need to learn quite a bit more. Thats why I came to this forum. Thanks for all the advice.

If I were you, but I'm not.  :no:  I would work without a permit.   If someone says anything, then get one.     NOW THAT SAID.... YOU still need to check around and find out if your locale, requires one.     You may need some type of an entertainment license or permit.     If I do, I'm not aware of it, but that doesn't make me right or legal, if......   I am not a lawyer or a tax consultant, but I have paid thousands of dollars to them over the years.    2 days ago I slept at a Holiday Inn Express, so I'm pretty qualified.    :whistle:

Some of the equipment can be written off on a one time basis (total expense in that year) and some can be depreciated over time (Several years).    You need to do what works best and what is a legal deduction and how.   Everything business related is a write off.    If you can prove it was for the business.

Several more things about business income.     You can only show a lose for 3 years out of 5.   You can break even (no lose or gain) for two years or you must show an income for 2.     If you show too many loses and never a gain the feds could consider it a hobby, instead of a money making business.    If they think it's a hobby, you will pay the taxes and won't be able to use the write offs.    

I have given my wonderful  :hug:  tax man  :worship:  orders not to put up any red flags.    I may not get every penny I could get but I haven't been audited either, in over 24 years.    It's kind of an insurance policy against an audit.    My poor Uncle needs to make a little money to keep killing the terrorists.    LMAO  

Depending on how much income (karaoke) you claimed last year and how many deductions you could have claimed, you need to talk to your tax man and see if it's worth filling an amended return.     See what the refund will be, if any.    

Having an office is a sweet deal, if it's legit and you have spare room you're not using.

Any money you can save in your pocket is better than in your Uncles.    ;-)  

Stay tuned for more helpful tax and legal ideas.    :whistle:

You can't afford my fee....

Works for me.  LOL

Let's put it this way: last year my karaoke business netted me about $15,800. The taxes on that income was GOING to be a little under $1200 before I started my deductions and depreciations. AFTER I was all done with depreciating all of my equipment, writing off all of my business purchases for the year, and claiming all of my receipts for gas, the cost of making books, internet, etc., I ended up paying $180 in taxes on my karaoke business. You definately need to get someone to do your taxes to take your karaoke business into account!!

The good news is that if you WANT to, you can file an AMENDED tax return for up to 3 years ago, so you COULD go get your old taxes REDONE and get a fat check back from the IRS for all of the karaoke deductions and appreciations you missed. Gather all of the receipts you can muster and pay the H&R Block guy $50-60 and he'll get you all of that $$ back!!

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C Mc
KJ, FL

I agree - You need to get yourself a tax professional. Make sure
they are a CPA that does tax services year round.

RED FLAG - If you are receiving a 1099 (independent contractor) and not
claiming expenses the IRS will target you. I know this for a fact! You need to find out from the bar that gave you the 1099 what they are claiming you did for them. They may be
claiming you are entertainment. I would take advantage of your write offs if you are receiving a 1099. Like was said, you can do an amended return for the past 3 years.

As for a business license - call your local village hall and they will tell you what is required. I know for a business license in my town it is only like $20.

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PM4877,

You asked a simple question and I'm going to give you a simple answer.  If the owner of the club you play hasn't asked you for a license chances are very good that you don't need one.

Except for gambling, enterainment is usually not regulated by state governments.  It's a local issue.  Most communities require a business that features entertainment to be licensed.  In many places it's called a "cabaret" license.  Some places all you need the venue needs is that license and everything is cool.  There are more restrictive communities that issue different kinds of licenses for different kinds of entertainment.  But whenever a license is required, the license runs to the establishment, at least in my experience.

I won't get into all the ramifications of business structure and that kind of thing.  That's been covered pretty well by others in this thread.  

Larry

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