#112 Joe DeVito- CPA (Tax tips to maximize your money & avoid being audited)!!!
Today’s guest is Joe DeVito, aka Damon’s accountant. He is an accountant at Berkow Schechter & Company, LLP. Joe joined the firm in 2012. He is a licensed CPA in the state of Connecticut. He graduated from the University of Connecticut with a bachelor’s degree in accounting and is currently working toward obtaining his master’s degree. Joe is a die-hard fan of the New York Mets and UConn basketball.
The website to check how much you can claim for your per diem is located at GSA (dot) GOV.
Accountants were known for wearing green visors. That wasn’t just limited to accountants. It was pretty much anyone in poor lighting conditions who had to pour over numbers for their job.
Educational Spotlight for this week…..
The Percussive Arts Society (PAS) has scholarships available for students attending school as well as scholarships available for people who want to attend PASIC (Percussive Arts Society International Conference).
Last week we mentioned vocal remedies and this week we talk about some technical exercises and warmups for your voice.
World Hearing Day is coming up on March 3rd. The U.N. has released new guidelines for hearing levels and exposure limits to counteract people listening to headphones and airpods at unsafe levels resulting in permanent hearing damage. If you want to know how long you can listen to certain decibels before you incur damage, you can CLICK HERE for a chart. Damon keeps a decibel meter on his phone to monitor the sound levels around him. Here is a LINK to some free apps you can use on your phone to do the same. Everything you never knew you needed to know about different types of earplugs can be found HERE. Damon mentions some of the Vic Firth products for protecting your hearing. As far as IEMs (In-Ear Monitors) go, there are many types by many different companies. Damon happens to use the JH Audio IEMs (Jerry Harvey invented the IEM). If you’re not ready for that step, Shure has some decent ones that you don’t have to get molds for.
Product Review for this week…..
Zoom has some great products for recording (Damon uses the H6 and Marcos uses the H4 for hand held recording devices). They also have some cameras that can be used for musicians. They have good quality microphones to go with the 4k cameras they have upgraded to. You can check out all the products they offer by going to THIS LINK HERE.
The Black History Playlist can be found HERE. It is a collection of Negro spirituals, African-American favorites and other songs about “blackness”. NSFW as some of the songs have profanity. The iconic recording is by Prince and it is called “Ronnie, Talk to Russia” from the ‘Controversy’ album.
Music News for this week……..
Sir Richard Branson is trying to help out the citizens of Venezuela with a “Venezuelan Live Aid” Concert. Amazon is setting up storage lockers at the upcoming Coachella Festival. Universal Music Group is pulling Ryan Adams’ new album amid allegations of sexual misconduct and an FBI investigation. Latin Artists Dominate Streaming, But Few Are Invited to Play Festivals. U.S. Copyright Office Refuses to Issue a Copyright on The Carlton Dance from The Fresh Prince of Bel-Air. Damon mentions that Alfonso talked about in the past that he got the idea for the dance from seeing the Bruce Springsteen “Dancing in the Dark” video featuring Courtney Cox. ICM Partners Sues Celine Dion For Unpaid Commission On $500 Million Deal. Lastly, Mariah Carey Gets $5 Million Dollar Settlement From Ex-Billionaire Fiance For Wasting Her Time.
The song leading into the interview is “Killing in the Name Of” by Rage Against The Machine (one of Joe’s favorite bands).
The 1099 deadline to send to employers can be found HERE, spoiler alert, it’s always Jan 31st (as well as info on filing for an extension).
Taxes started way back in the 1760s because of the Stamp Act (also after the Sugar and Molasses Act).
“No Taxation Without Representation” was because of Britain requiring taxes from the Colonies without actually having elected officials present. Short version, that lead to the Boston Tea Party, then the Boston Massacre (shout-out to Crispus Attucks) and then the American Revolution.
Fast forward a bunch of years and federal income taxes were officially put in place to replenish funds used in the Civil War. They were initially called the Revenue Act of 1861. Thanks Lincoln (and your Congress)!
April 15th is the day your taxes need to be filed (by midnight), unless you get an extension.
My very own accountant says you don’t have to hire an accountant. Filing on Turbo Tax is fine if you’re willing to do the work (and also accept responsibility for your subsequent mistakes).
Shoeboxed is an app you can use to scan and organize receipts and business cards. You can create expense reports, track your mileage and so much more!
You can always go “old school” and get an expense report book to log everything in by hand. Keep your receipts!!!!
Any income should be logged. 1099s and cash. As far as making money "under the table - in cash"....
If you make less than $400, you would report it on line 21 of your form 1040. If you make $400 or more, you would report that on a schedule C. If you were audited by the IRS or state government, they will take a look at all your trackable income on bank statements, Square, Paypal, Flint, etc. You should also be prepared to explain how you track cash. If there is a discrepancy between your income calculated by the IRS, and what you reported on your tax return, you may face penalties and fees.
Here is a list of deductions that you might have…….
Instruments (very expensive ones may need to be depreciated instead of deducted)
Repairs/Maintenance on instruments
Sheet music and music-business books
Instrument consumables (drum heads and sticks, guitar strings and picks, valve oil, mutes, music stands, polishing cloths, mouthpieces, tuners, cases, straps, etc.)
Insurance for instruments (Clarion, MusicPro, and others, etc)
Travel to/from gigs and performances
Mileage between gigs at 54.5¢ per mile (keep and track the mileage records in your car!) vs. gas, insurance & repairs.
Meals when traveling for gigs and performances (at 50% of the cost). An update on the “Meals and Entertainment” clause in your tax reform.
Recording equipment
Promotional recordings, photos, etc.
Rental of performance, rehearsal or teaching spaces.
Subscriptions to trade magazines (such as Billboard, Modern Drummer, etc.)
Copyright and registration fees
Lessons and instructions that you take to improve your musicianship
Fees related to maintaining your website and e-mail for music-related activities
Rent for storing your gear and/or for your practice space if you have a home studio for teaching and/or recording (Home office deduction at $5 a sq. foot)
Cable, Internet (partial cost of the bill for studio etc)
Memberships in professional organizations and unions (i.e. The Musician’s Union, SAG, The Grammys, PAS, etc)
Professional fees (attorney, manager, agent, accountant, etc.)
Tickets/fees for cultural events (within reason!)
Office supplies (pens, paper, printer ink, etc.)
Equipment used exclusively for your business (laptop, printer, etc.)
Health Insurance deductions if you’re self employed.
Self Employment Tax if you don’t have a “boss”. The threshold is $433 for the year.
This article will help you decide if you should file an LLC vs an S-Corp etc. Joe mentions the 1040 form a few times. Here is what that form is all about.
Here’s an update based on the newest “Tax Cuts” & “Jobs Act” imposed by the Trump administration.
Here are some of the penalties Joe mentioned.
Some of the music in Joe’s current rotation consists of: Rage Against The Machine, Foster the People, Post Malone and any 90s Rock.
Here is some basic Tax Tips for Musicians as a bonus blog.
The song leading out of the interview was “Sit Next To Me” by Foster the People.
