Tax Issues from Pow Wow winnings

[Paul G]

Heard lots of issues lately about problems with taxes because of Pow Wow earnings especially drum groups.

Has any drum out there formed themselves as an LLC? That would allow them to have the group hold the tax liability instead of just 1 person.

Or how are you handling the tax issues?

[WhoMe]

Paul,

What's an LLC?

[Paul G]

Paul,

What's an LLC?

Limited liability company - Wikipedia, the free encyclopedia

Limited Liability Company

[legalstraight]

Ya those taxes hurt.
An LLC is one option, could also do an S-Corp (closely held corporation) or get incorporated, which has kind of strange ring to it "and up next on the rotation Maza Ska Inc."
Taxes still gotta get paid though. One thing with setting up legal business papers is that you can deduct things like mileage (which is around fifty cents a mile), hotel rooms, some meals, and costs for sticks and so on some of which you can deduct as an individual if you are reporting the drum income. But you end up being responsible for some other taxes like FICA (social security) and there are annual fees and paperwork, and all the singers then work for the company so they have to have 1099's.
Depends on your drum and your situation if it would be worth it.