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View Full Version : Self-employment vs hired gun



SkinnyDevil
07-06-2004, 04:01 AM
OK - in relation to threads concerning careers as a practicing musician....

There are advantages to being self-employed, of course, but who here has input regarding starting your own company and then being officially listed as an employee?

I choose the self-employment angle because there are no true liability issues (although with ubiquitous litigation, maybe I should rethink my position), but I just ran into my first problem with that status (home-loan). So my buddy Joel said I should have started a corporation and employed myself as Pres/CEO. Look sbetter for the banks, even if the income is the same.

Does anyone have any input regarding this or tax issues, insurance issues, and the like?

SkinnyDevil
07-12-2004, 03:05 PM
Wow. I'm a bit surprised that this thread didn't generate any response, given the number of guitar teachers & other assorted music professionals (not to mention those who want to be muic professionals) who frequent this forum.

How about a simpler question, then: Of all the full-time musicians here (certainly I'm not the only one!), who is listed on their tax forms as self-employed and who, by contrast, has started their own company and is listed on their tax forms as an employee of their own company?

I'm listed as self-employed, but am looking into the added benefits (if such benefits exist beyond liability/assets protection) of altering that status.

Input?

RandyEllefson
07-25-2004, 05:09 PM
Hey David. Long time no see. How are you doing?

Well, I have a real day job, so I can certainly say I'm constantly being crushed to death by time constraints, if that isn't too melodramatic :D

Malcolm
07-31-2004, 05:09 PM
Faced this situation when I retired and started working for my self. I was a Corporate Trainer and then hung out my shingle.

After looking at many options I decided on being Malcolm A. Jones dba Malcolm A. Jones and Associates.

What with corporate tax, self employment tax, and all the other tax it was just simplier. Register your dba name for $9 at the court house and get a Profisional Liability Insurance ploicy. Much cheaper than trying to rely on the corporation to protect you --- which is hard to do when you are the only real employee....

Most loan officers only have to ask a few questions to find out what kind of a business you have and what your position really is. If you are going with the Corporation they want to see the items of incorporation, a copy of the board of directors vote authorizing the loan, etc.

There is no sky hook, best to call it what it is.

SkinnyDevil
08-11-2004, 01:23 PM
Hi, guys. Thanx for th responses.

Another topic (somewhat connected) is about criminal issues. I had a friend who was falsely accused of sexual misconduct. He managed to clear his name, but it took considerable time, effort, and money. Even with all that, had the girl not admitted openly that she made it all up, he might have been ruined.

It makes me wonder, with all the stores using small teaching studios in the back corner of the shop, if this is a potential disaster for many teachers. Any ideas how one might protect oneself from such accusations.

rmuscat
08-11-2004, 03:16 PM
hey i'm not in the business, i'm not a teacher and i'm no tax guru .... and i never tried to help in this thread for this sole reason ...

but on this i think i can help ....

CCTV are cool .... but I THINK slightly expensive. But the hassle it saves you from is worth the effort/expense i guess. Today with digital technology the system most probably can organise itself (days, weeks etc) and also started automatically.

Also ... simpler ... group lessons are safer, you know, you have witnesses.

that's the 2c of one who has no experience in the subject of teaching

LarryJ
08-11-2004, 06:13 PM
on the bright side, if you start your own business, maybe you can write off guitars and amps as business expenses!!

That sexual misconduct is a weird one, I have never heard about that happening before. I suppose it's always a threat, but it's not like you can keep a door open unless your the only one giving lessons.

One solution might be to tape the lesson. Get yourself a camcorder and have the student buy a tape...sort of a way to review the progress and keep yourself safe.

Of course, almost none of the students I saw were females, and most were genuinly interested in becoming very good players/respected the teacher alot so I think that also would discourage such accussations.

I just realised what CCTV stood for, so I guess this makes 2 votes for that idea...again, the business expense!

SkinnyDevil
08-12-2004, 01:33 AM
Luckily, even with my current selk-employment status I get to write off all my music purchases. Gear, clothing (logo-ed stuff, anyway), CDs, DVDs, books, etc. - plus all biz-related expense (flat mileage rate, postage, copies, office supplies, cell phone....).

CCTV. Closed circuit TV?

About half my teaching income is from group lessons, so I'm OK there. My private lessons are in a studio with a window, so I'm not real worried personally about such accussations. However, I know a lot of teachers and find myself wondering how safe they are.

As an aside, about 60% of my clientele is female. More often than not, they are extremely dedicated. My star pupil is only 6 (actaully, she just turned 7 on Monday) and is working on "Stairway to Heaven". Sure, I have students who can already play much harder stuff, but think of how good she'll be by 10!!!

rmuscat
08-12-2004, 07:19 AM
yep CCTV = Closed Circuit TV
(sorry for assuming everyone knows what that is)