LearnGospelMusic.com Community
Gospel Instruments => Gospel Drummers => Topic started by: FerrariRed on May 17, 2007, 04:00:53 PM
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The more I thought about the lengthy thread on How much a Drummer Should Get Paid and what I had replied to Musicaljeanyuss, I thought a separate thread should be started so my point is not lost which I feel is relevant but also important from another aspect of musicians getting paid in church.
The church should be withholding federal, social security and Medicare tax from your pay. You are employees and not contractors or subcontractors. Unless your church has filed a form 8274 electing not to withhold social security tax, they are supposed to withhold tax. They do not want to withhold tax because the church has to pay a portion of your social security tax which can be costly to a small or large church depending on the number of employees. So to avoid this liability, the church either pays you “under the table” which is what a lot of churches do, or they pay you like musicaljeanyuss is paid, withhold no tax and issue you a 1099 at the end of the year.
Most of you guys and gals are young and not familiar with the tax laws, so you end up making this money, kicking it, then receiving this 1099 at the end of the year and when you file your return, you have a large tax liability because you have not paid any taxes.
Ladies and Gentlemen, I work for the IRS and have for 17 years. The information I am providing is general. For additional information, please contact your local IRS Walk-in office or call the IRS help line for tax assistance and questions 1-800-429-1040. Check out the website:
www.irs.gov.
These publications are free to review online or download. Check out the following:
IRS Publication 15, pg.7, “Who are employees”
IRS Publication 517 (Clergy and members of religious organizations), pgs. 1 – 4, specifically pg. 4 paragraph 3
Form SS-8, Complete this and mail it in and the IRS will determine if you are an employee.
Again for additional information simply contact your local IRS office or call the toll-free number previously listed.
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yo you are speaking some knowledge forreal....i wish i would have known what i know now about churches withholding taxes....
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Thats trur but church drummers dont pay taxes lol! I know I dont !!
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This thread should become a sticky. Knowledge is power. So many people are getting burned when it comes to this.
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LOL!!! Your pastor is gonna get you!!! LOL!!! Knowledge is power. Good word. Thanks fam.
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The more I thought about the lengthy thread on How much a Drummer Should Get Paid and what I had replied to Musicaljeanyuss, I thought a separate thread should be started so my point is not lost which I feel is relevant but also important from another aspect of musicians getting paid in church.
The church should be withholding federal, social security and Medicare tax from your pay. You are employees and not contractors or subcontractors. Unless your church has filed a form 8274 electing not to withhold social security tax, they are supposed to withhold tax. They do not want to withhold tax because the church has to pay a portion of your social security tax which can be costly to a small or large church depending on the number of employees. So to avoid this liability, the church either pays you “under the table” which is what a lot of churches do, or they pay you like musicaljeanyuss is paid, withhold no tax and issue you a 1099 at the end of the year.
Most of you guys and gals are young and not familiar with the tax laws, so you end up making this money, kicking it, then receiving this 1099 at the end of the year and when you file your return, you have a large tax liability because you have not paid any taxes.
Ladies and Gentlemen, I work for the IRS and have for 17 years. The information I am providing is general. For additional information, please contact your local IRS Walk-in office or call the IRS help line for tax assistance and questions 1-800-429-1040. Check out the website:
www.irs.gov.
These publications are free to review online or download. Check out the following:
IRS Publication 15, pg.7, “Who are employees”
IRS Publication 517 (Clergy and members of religious organizations), pgs. 1 – 4, specifically pg. 4 paragraph 3
Form SS-8, Complete this and mail it in and the IRS will determine if you are an employee.
Again for additional information simply contact your local IRS office or call the toll-free number previously listed.
How does this relate to the fact that most churches/ministries if not all carry a 501c3 status (none-profit).
Any amount over $600/yr from said church/ministry or combined gigs the drummer (independent contractor) is supposed to file anyway... right?
As well as aspiring pro should keep all recents relating to gar, instruction, trade mags, trade shows, clinics, mileage, repairs, practice space rent etc for write off purposes... if you have gotten your business license, business bank account, EIN all in order.... hint-hint.
Please shed more business knowledge on this pros and accountants.
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The 501(c)(3) simply gives the church or any organization exempt status which allows the church tax exempt status and to receive public funds and contributions you make to an exempt are tax deductible.
The $600 amount is for reporting purposes. If a person makes $600 or less, the church/organization does not have to issue a 1099. If the amount is $601 and above, the church has to issue a 1099. But remember, you’re supposed to receive a W-2. For federal tax purposes all earned income is taxable no matter what the amount is. You don’t need a business license as drummer. Any income you earn from playing the drums or any business, you are entitled to deduct expenses against that income when it’s time to file the tax return. For example, you make $500 for a gig and before the gig started you had to buy sticks, heads, etc. that totaled $100. Well when you file the return you report $500 gross minus $100 for business expenses (incurred to earn the income) = taxable income of $400. Anything that is related to drums and the income earned from playing the drums is deductible. Just keep a log book of the yearly activities and keep ALL receipts. And finally…HEAR ME ROAR!!!!!!!!!!!!......Whoever you get to prepare your return, if that person is not willing to sit down and go over every number on the return and explain to you why the amounts are on there, don’t use that person. Don’t ever, ever, ever sign a blank return for a preparer to complete. IRS prepares tax returns free of charge depending on the amount of income.