You are going to find others out there calling themselves music business managers. Many are not CPA’s and don’t even have an accounting degree, so they’re charging prices all over the place. Many have only done a handful of tax returns and may have never even prepared a state return, or advised you to file a return in certain states you tour through. You will be well served by going with a business manager who has gone to bat for their bands in enough IRS audits to know which areas of your business you should really be paying attention to, and who knows to tell you what and what not to watch out for.
Hiring a business manager without adequate staff and with little experience in music business issues and federal and state taxation may end up costing you much more than you may think you’re saving. Is it worth the risk to find out what they haven’t been doing for you when it’s too late?
Before you jump off and hand over your business to the first guy that quotes you $500 a month, consider working closely with a more experienced business manager during your growth years so they’ll already be familiar with your music, your audience, and your business style, so that when you do hit $30 – $40k per month and need someone fast, you’ll already have someone that you know and trust.
Bottom line: go with a business manager who is a CPA. One who has current and past music business clients whom you know and can check references with. One who can guide you and your tour manager during the year to keep records that are adequate to hand over for an accurate tax return. Then you won’t be losing sleep worrying that the 3-year IRS statute of limitations seems like a really long time. A good CPA business manager should be able to painlessly guide you through the tax year and affordably prepare your state and federal taxes at years end.
Our team is always ready to answer your questions and get you in the right direction. Give us a call or stop in for a visit. Follow me on FB – LayneLauritzenCPA and on twitter, austinmusiccpa, to stay up to date on music and tax news.