A few questions about home recording as a business

[Husky062877]

Hi all, I just joined here and hope I could get some answers. I've just recently built a small studio in my home mainly for my band but I've been expanding to do work for other people. I ask roughly $20 an hour to work with them which hasn't been a problem as of yet. My question is I have a name I would like to use on my future productions and work that I do with others. I've been looking into trademarks and such and it sounds confusing with tax id #s and such. I'm not sure if I can trademark my name and stay under the able or what I have to do to to be able to make my name legal? Sorry if the question is confusing or not clear. ANy advice would be helpful, thank you!

 

[razork222]

Tell me the name you're thinking of, and I'll tell you if it's worth stealing or not...

 

[suprstar]

Your tax id is just your ssn if you're a self employed sole proprietor, owner/president of your own 1-man company. You could certainly trademark your name, and if you get paid cash and aren't given a 1099, it'd be impossible to nail you if, by some accounting error, you somehow forgot to report that income.

 

[mikeh]

It sounds like your primary concern is that you want to run a business, trademark the business and generate business income - without paying taxes (I assume that is what you mean by staying under the table).

You can secure a trademark for a business name or copyright for your material without having any business income.......so simply applying for a trademark or copyright may not draw attention from the IRS, etc. - in fact, I suspect there would be very little chance that those actions would even fly in the radar.

As indicated, if you are a sole propriater of your "business" your Social Security number is your tax ID number - so there is nothing you would even need to do to obtain a tax ID.

Naturally, running a "business" under the table has risks. Failing to pay taxes (fines and penalties), operating a business in an area not zoned for business (fines and penalties)and business risk in a residence -without informing the insurance carrier (claims denied and insurance cancelled) can all bire you in the ass.

That being said, there are hundreds of thousands of people (tradesmen, accountants, artists, etc) that have home based businesses (many who under report income).......so you won't be alone!

 

[Husky062877]

I guess it's not so much running a business vs I'm lining up a few friends who just want something decent and I said I'd do it for like $20 an hour. Now I would like to be able to have a name for my self and be able to make it stick. That's why I was looking into trademarks. My father had mentioned I may be able to get money back at the end of the year by claiming this extra income and in a business sense possible a tax deduction for the equipment I've purchased and such. My concern is do I just continue doing work under the table now in my "small time" studio or do I go after the trademark and tax deductibles and so forth.

 

[mikeh]

The last time I checked, the IRS expects reported profit in 3 out of 5 years.....failure to show a profit with that frequency could result in an audit in which all claimed deductions could be disallowed and you would be forced to pay the unpaid taxes, plus interest and penalties. So.........choose the tax write-off approach very carefully.

Your dad is correct, but it is more complicated than he may realize. There are certain ways around this.......as an example, as a songwriter, my creative works can take years to see commerical success, so I can to some degree work around the "business must make a profit" requirement. Plus, I generate music income from gigging and doing session work.......so my running a studio income is only a small part of the income I sclaim to offset deductions for gear - and I also pay a lot of taxes from my day job income.....thus my tax returns probably don't fall into the "red flag" catagories.

This is simply my opinion (worth nothing) - but for a couple of small projects charging $20 an hour............I would keep in "under the table". If you do good work, word of mouth (which is very important in the recording industry) can spread and you will develop the name you desire (at least in the musical network of the people you work with). However, keep in mind, if you don't produce good product, a negative rep will spread.....even quicker!!!

If you do get a good rep and more work starts coming in............at some future time you can always revisit any decision to file for trademark protection, file taxes, etc. etc.

 

[Husky062877]

Thank You Mikeh, I was starting to lean more that decision after seeing all that's involved and after reading your post It confirmed it for me that I should just come up with a name, use it and hope no one takes it in the mean time LOL. Thank you again!

 

[LemonTree]

Make up your name and put a little ™ after it YOURNAME™

If you use paper to bill your friends don't charge them VAT. It's in your name and the money is in your pocket that's it.

The less people know the better. I know of a dozen home based studios in my area all doing the same thing. Smoe of them not so small either.

You can make things "look" professional enough to buy you clients but to be honest, most small studios I know of, including my own work best by word of mouth.

Start a myspace page for your studio and ask your clients if you can post one of their songs you record on there (non downloadable) to build up your port folio. That way when people hear their stuff and ask where it was recorded they can point them to your space with a selection of the best of your work.

Tax man? I'll leave him to the beatles