Taxes in the Music Industry

Julie writes in to ask about paying taxes on items sold through iTunes. It is a slightly different question compared to the technical stuff I usually deal with, but I was happy to help out.

Here is Julie's slightly modified text:

This may sound odd, but I saw your post on a message board about iTunes. Im a singer songwriter, and I want to get my stuff up on iTunes. I don't have a label, and will be doing this all myself from creation, to publishing, duplication cost..etc. Will I have to pay taxes on income earned from each download? I know the cd sales I sell out of my car are mine- but what about the money that comes to me from each download? does the IRS track that and come after me for each one? im so new at this, and any info would be helpful. Thanks Julie

Disclaiming this response with the fact that I am only aware of US based laws and I am not a lawyer or accountant...

Most likely you'll have to pay taxes. As a business owner myself, I budget for 40% of my income to go the government. As a self employed individual, you pay the same taxes you do as if you had a day job (~33%). If you had an employer, that employer is paying ~7.5% to Social Security in your behalf. If you're self employed, you pay that amount yourself.

You also have to pay taxes on the CDs you sell out of the back of your car. They qualify as income.

The benefit of claiming this income on your taxes is that you can also claim deductions. For example the cost of printing the CDs is tax deductable. If you buy equipment such as a microphone, guitar, mixer, guitar strings, or mic stand that is tax deductible. If you drive a vehicle to and from a gig that mileage may be tax deductible. If you buy clothes / costumes for your performance that is deductible. If you rent a professional studio or hire a producer / mixer / etc... that is all valid business expenses and deductible.

In my 10+ years of being in a band, I think I never had a year where the band income was more than the band expenses. One year we had an operating profit, however equipment we were deducting over time offset that profit for tax purposes. That is why I am no longer trying to be a professional musician. I didn't have the people skills to be good at the business side of it.

Tons of bands play dive bars once a month for $300 a night and split it between 5 people. I doubt the IRS would go after those people (But don't quote me on that). On the other hand, if you're playing 200 shows a year, have thousands of fans, and are generating a half million a year they'll probably notice you.

A lot of musicians want to wait until they make enough money to be noticed before they address this issue. However, that seems wrong to me because a lot of the tax benefit is going to be now / today when you're struggling, spending, and making almost no money.

You're going to want to talk to an accountant and/or lawyer for specifics in your area, though.

Roland GP-100 Jitter Repair

This is a thread I borrowed off a mailing list for the Roland GP-100. The GP-100 is one of the first digital amp modeling effects units. I have two of them, and was getting an annoying hum in one of them, so I spent some time this evening taking the "Broken" unit apart.

This thread is from the Roland GP-100 mailing list dated March 2003 between Rex and Kevin. I have no idea who Rex and/or Kevin are. The pictures are Kevin's, though.

Who knows but I'm glad I had it tonight.

Rex Started:

Did you ever wrestle with a GP-100 that had a jittery PARAMETER or NUMBER/VALUE knob? You know -- where you turn the knob in one direction and the display jumps two or three steps in the other direction? It's the most annoying "feature" of many Geeps, and those who must live with it curse it loudly. If this sounds like you, relax...your problems are solved. Most likely, the culprit is the knob itself. I've experienced this problem on both of my Geeps, and in each case, the problem was a small crack in the core of the knob (the central part that grips the encoder shaft). This flaw is hidden from view unless you remove the knob and look at its backside. There is one fairly wide, very uniform split that's supposed to be there. If you find two cracks or splits, that's one too many. The split causes slop in the knob-to-shaft coupling, which causes switch bounce, which causes...well, you know the rest. So do yourself a favor: go to the www.rolandus.com and get Roland's US tech support number (unless you live outside the USA, in which case you can go to www.roland.com and find the number that's closest to you). Then call that number and order up a couple of new knobs at US$ 2.00 each. Then install the knobs, sit back, and enjoy Geeping as it was meant to be. That's what I did, and now my Geep never jitters at all.

Rex //Computer Guide

At this point, I have no idea if those knobs are still available. My unit was in fact having the jitters. I took it apart to try to diagnose a huge humming noise making it unusable, but while I had it opened I went ahead and took a look at the jitter problem.

Just a quick how-to (this may be old news, disregard if it is and a couple pics of how to fix the encoder problem the best you can without replacing them..

Blowing air or contact cleaner will most likely make the problem worse then it is. These are not optical encoders, what happens to these usually is the grease they use to lubricate the little ratchet thingy gets all over, contact cleaner and compressed air makes it a bigger mess usually. Also what happens is the ratchet teeth get worn and it doesn't 'center' properly on the clicks. Anyhow, a phillips screwdriver, small jewelers screwdriver and a pair of needle nose pliers are all you need. I used some contact cleaner sprayed on a q-tip to clean everything, used a pencil eraser to 'burnish' the wheel and contacts, one more cleaning with the q-tip.contact cleaner and a dab of silicone grease on the teeth - a very small dab with a toothpick.

Also, the reason I even bought a GP100 (paid 100.00 for it), is the previous owner was quoted 150.00 to replace the backup battery - its a common $3.00 CR2032 battery available at radio shack in a slip in holder as you can see by the pic. This one had the 'replace battery' screen up and the owner freaked out. If you replace it powered up you probably wont lose your presets (I don't have a schematic so I say probably), just be careful not to drop the battery on the main PCB or on the 110v mains wires/terminals that are exposed on the PS board - or you could just back up your presets on a computer and change it with it unplugged/power off I guess. Be careful when working with this plugged in, the AC wires are exposed and easy to lay your arm on by accident - trust me on that

This is probably old news but I was bored tonight and got sick of the 'jitters.' Back to the way it should be now, took ~15 minutes to do.. If you want these pics for a web page or whatever grab them now - they wont be up for long..

Kevin

Thanks Kevin, I did snag those photos and have reposted them here, 6 years later give or take a few days. Unlike Kevin's prowess, it took me about 2 hours to get the GP open; and then additional time to figure out how to get the knobs off and stuff. Before searching out the original e-mail; I used quite a bit of compressed air blowing. But, nevertheless that seems to have fixed my problem; at least for the moment. My hum went away once I had the whole thing apart; no idea why. It stayed away while when I got the thing back apart.

Build Me Up Buttercup by MTMX

This is from the cover band I was in for a bit, named The Meredith Tyler More Experience. I play bass on this recording. I also did the recording and the mix. Good times.

Genuis or Hack?

I mentioned on The Flex Show podcast (episode 2) that I had 20 minutes of me doodling on the yet unheard theme for The Flex Show Podcast.

I'm listening to the mixdown right now. Either I'm a musical genius or a complete hack. I can't figure it out. There are moments of brilliance surrounded by utter rubbish. Perhaps the difference between genius and hack is being able to tell the difference. Even Eddie Van Halen (or Slash, or whomever you prefer) has bad days. The joy of being talented is that his bad days are better than my good days.

After my initial doodling and having a few people listen, I went ahead and re-recorded the guitar part. I have Lori coming in on Saturday to do vocals. Maybe I should have Tim come in to do some male vocal-isms.

Ryan liked it as is. At times like this, I remember the many hours I spent recording and re-recording the guitar parts for Simple Melody in the living room of the condo. The take we eventually kept was done at about 3 in the morning during a bit of insomnia. My roommates didn't complain, but in retrospect that was not the best time to be playing guitar. I was very particular about guitar sound when recording Far Cry Fly's first album. I loosened up when we finally upgraded our equipment and I could move from two guitar tracks to 6+.

We've been unable to make any traction on the call-in portion of our show, so the lyrics I wrote don't apply so much anymore. I re-worked them three times. But, Skype us anyway. Please!

The Spin Doctors at the Milford Oyster Festival on 8-19-2006

My audience recording of the Spin Doctors at the Milford, CT Oyster Festival is now up on Archive.org. Go download it:http://www.archive.org/details/spin2006-08-19.flac16

This is a pretty substandard recording, and an equipment failure cropped off the last few songs.

This is only for Spin Fanatics or people who were there.

Far Cry Fly on ColdFusion Weekly Podcast

A Perfect Day by Far Cry Fly is on the Coldfusion Podcast (1.25) .

This song was a crowd favorite. We'd often use the song at the end of the set, and thank the audience venue / etc.. etc..

It had a nice laid back Jimmy Buffet feel.

On the studio version of the song, we used an opportunity to introduce ourselves, thank the people who bought the record, push the web site, etc... There is a version of the song with this piece cut (no talking). There is a version of the song from our 'short' foray into the world of stage names (Ariel Skye and Aaron Skye) And then there is a version of the song the standard "Jeff and Lori" monikers.

I cringed when I saw it, because I didn't know if they had the 'stage name' version of the song or the 'real' name version (half the discs have the stage name version and the other half has our regular versions).

Matt and Peter talk over the first half of the song. I haven't seen them do this before, so perhaps it was a bit of an in-joke because the band did it in the song.

The song sounds pretty good surprisingly. They did a good job of talking over the song with it real low in the background and then fading it in for the end probably right after we finish our 'talking' spree.

My Saving Grace is used on episode 21. Once again, they did a good edit job of it, cutting in right at the last chorus (but skipping all the verses).

Edits beyond my control usually make me quesy, but in this case, they didn't change anything, just added some fades to Perfect Day and a cut to My Saving Grace.

I miss being in the studio.

This is the Greatest song in the world

I really need to fill out my collection of Reel Big Fish Songs.

(S)he performs for the New Music Showcase

We recorded the band (S)he for the New Music Showcase this evening.

There was some confusion, so the band thought we were recording from 9 to 3 (during the day) instead of from 4 to 8. I got called asking if I could come in early. The shoot ended up going from about 3 to 7. I showed up around quarter to 4 to help finish setup. Kudos to Paul Cappa for standing in as host at the last minute. He did a fantastic job. Paul is 'seasoned' in stuff like this due to his time from Bands on the Road, a show similar in format to ours but no longer in production.

Anyway, so the recording goes off w/o too many hitches. their soundman couldn't make it so they want me to re-mix the vocals on each song "on the fly". I wasn't too happy about that, but did my best. Usually we try to set the levels and keep them for the whole set. They had three female vocalist, each sharing the lead (depending on the song). They had a "R&B" vocal style with a rock music behind it.

A lot of their songs were familiar, and I'd swear that the "Animal" (It's available on the jukebox on their site) intro is right out of a Steve Miller Band Song

We were short-staffed, due in part due to the time change (and resultant scrambling around to get started early). Because of this, Walter (the producer) was helping me set up sound and did not take care of some the usual paperwork before we started. In short, the paperwork gives us the right to re-broadcast the visage of the performers and their music.

At the end, Walter is trying to follow up on paperwork and the band-folk says that he just spoke to the record company won't let them sign until they see the video. If they want to review paperwork via lawyers, that's understandable (although it should have been taken care of before the shoot). But, why would we put our time in to record the video, turn it into a show, and prep it for broadcast if there is a chance they won't approve it.

I pulled Walter aside and recommended he drop the show from the list completely. He told me they just wanted to review paperwork (not the actual video), but I'm not convinced. I'm positive I heard otherwise. Walter assured me he won't let them see the video w/o the finished paperwork.

I'm a bit peeved because I feel like I just wasted four hours of my time (five if you consider the commute). I hope that I'm wrong (and Walter's right), but...

We'll see.

As an aside: I'm not sure why the web site for Paul's band is hanging right now (but I'm going to assume its a temporary thing).

Music Industry to shut down guitar tab sites

http://www.nytimes.com/2006/08/21/technology/21ecom.html?_r=2&oref=slogin&oref=slogin

The music industry is trying to shut down web sites that include Guitar Tablature. For the non-musicians on the list, Guitar Tablature is a way that musicians can tell each other how to play songs. It's like sheet music, but different. Instead of notes on a scale, you have one 'line' for each strong on the guitar. Then you put a number on each line. The number corresponds to the fret that you push down with your fingers. Rhythm and tempo that are normally part of sheet music are not part of tab. Many guitarists just want to find the basics of the song and put it together themselves.

Anyway, if I sit down and create tablature for a song, then I can legally copyright that tablature. I'm unsure if it can stand alone as 'new work', but it would definitely classify as a derivative work. If I post that to an Internet site, what laws, exactly, am I violating?

It's one thing if I copy tab out of a music book that I bought. I can see where that would clearly not be fair use. But, if it is tab I created should be fair game, right? In almost all cases the tab that most people create is a far cry from the 'real' tab you need to play the song. It's faker tab at best.

This is probably going to hinder a lot of cover bands.

CT to devote more Funding to The Arts

http://www.ct.gov/governorrell/cwp/view.asp?Q=318816&A=2425

CT is going to devote more funding to the arts, adding an additional 10 million to the 2.4 million yearly they currently give. The Connecticut Commission on Culture and Tourism will administer the funds.

It is unknown how an actual artist will get access to these funds, though. It sounds like most of the money will go to the venues, as opposed to the struggling artists.

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