From Band to Business.
Yeah, music is more than just music.
You’ve decided you would make a living (or a part of it) as a musician.
First of all, our hat’s off to you. Making a living (ok, probably just a part of it) out of your passion is a way of life we truly respect. It’s for people like you that we’ve created Momenteo.
You thought most of your time would be spent practicing, playing gigs and hitting the road, following the sunset with your band. Then, you realized you end up managing your booking, jam schedules, promotional platforms, tracking and things you didn’t even knew existed at first but always seems important. It’s not always easy to admit, but music is a business like many others. So If you want to make it through the jungle, you will need to stop managing a bunch of high school friends and start building a business out of your band.
When should you incorporate ?
Ok, if you are still in your mom’s basement, struggling with your cover version of Horse With No Name; focusing your energy on becoming better musicians is probably the best investment. But let’s say you run a band for some time now. You have frequent gigs, buy pricey guitars and pedals, sell albums (whatever that is) and make enough money to buy amps you will never use. It’s time to think about making “the move”. If you want something a little more precise ; 30 000$ annual gross income is a pretty good landmark.
Why should you incorporate ?
You need to understand something : as long as you are not incorporated, every penny made out of your music is supposed to be added to your “regular/day job” revenues. That means more money, BUT also reaching an higher tax bracket. And that, my friend, would not be your most strategic move. You will probably not get that money after all, and even lose more. You need to declare all your band-related expenses for tax savings, because If there’s one thing a musician has more than revenues, it’s expenses. The thing is, you will not be able to do that as a band if you are not incorporated. See ? A good management of expenses will allow you to add meat in your Kraft Diner after all. Oh and, FYI, here are some of the things you can declare as band expenses :
Musical instruments repair
Videotaping or recording of a performance
Make-up and hairstyling
Meals and entertainment (half of it)
Advertising and photoshoots
Insurances for instruments
Music lessons (you know, Horse With No Name…)
And much more…
There is something else. As an unincorporated band, each member is legally responsible for your actions. So let’s say your singer thinks it’s a good idea to stage dive onto a high school crowd and somebody gets hurt, they can sue you and take your car (or moped) If they want. Singers do not have to be THAT expensive folks. Once you are incorporated, you are legally shielded from debts and pursuits. Let’s just say it’s an advantage as major as it gets.
Finally, it makes things much easier for ownership, in case of a possible split-up. If your bassist decides to go “The Wall” on you, everything will be easier to set straight.
So here it is. Let’s hope we’ve just got you closer from your Coachella dreams, or at least a little further from Horse From No Name. Love you America though…
Ok, why not…