Musicians United Resources

By Trebor Ztimen

What? Are you nuts? You play for free? You even give out CDs for free? I have heard that question many times. The truth is, I get paid quite a bit to do all this for free. Yes. You read that properly. I do get paid for not getting paid. Wondering who would be crazy enough to pay me when I can be had for free anyway? Or do I play so bad they pay me to stay away? Read on.

Let’s say you did, on average, one gig every other week for two hundred dollars. You more than likely went to the establishment beforehand to check it out. That is time and money. Driving a car isn’t cheap nowadays with the price of gas and oil. Then the night of the gig you again drive there, probably getting less gas mileage with a vehicle loaded down with equipment. In the summer you break a sweat moving the equipment in, setting up, doing the show, and then reversing the process to get your stuff home. During the winter months it is usually worse with ice and snow, cold, and slipping and sliding carrying an eighty-pound amp.

The time factor has to be considered. From home, you probably need a couple of hours to break down your practice setup and load it into a vehicle. Figure an hour driving, on average, to get to the place. A good musician tries to arrive at least two hours before show time for setup, tuning, and sound checks. It is not uncommon to be hired for a four-hour show. You now have about the same time to get home and unload, as you needed to load and get there. Think of it, approximately ten hours for two hundred bucks. But that isn’t what you put in your pocket.

You have phone calls. Count your time spent on the phone. If you have a gig every other week for a full year you probably spent half your waking hours on the phone. And do not forget the phone bill. With that many gigs, you definitely called outside your calling area. You probably first went to the club to establish the initial contact, returned to check the place out with other members of the band, and then going the night of the show. Twenty bucks of gas is not unrealistic. Then the kick in the teeth when they pay you by check or invoice and you know they are claiming it on their taxes. Or there are the ones that pay you in cash and you think you are clear and then you receive the tax form in January? So the two hundred is now down to one hundred and thirty. I used the twenty percent tax bracket, for those of you lucky enough to be in that.

So, to summarize, you had an annual income of about three thousand dollars for five hundred and twenty hours of work. Now, keep in mind this has not taken into consideration practice time. More time is usually spent practicing than playing. There is nothing that sends a crowd away faster than playing the same material at the same place week after week. You become a human jukebox or worse yet – a vinyl spinner. (I did not use the term DJ because a true DJ works their turntables like a musician plays an instrument and crates their own sound). There is also travel time and expenses to get to the practice location – unless you are like the Monkees and all live together.

How about the ugly side of playing live? How about that amp that fails in the middle of a number? Through experience you had a backup amp but now you need to get the primary amp fixed before next week’s show. Extra guitar strings and drumsticks – they are not free. What about the keyboard that had to be sent out for repairs and you had to rent one for a show? Worst of all, the night you played so sick you thought you should have been dead – but the show must go on. A goal of a musician is to get their name around to be popular and get gigs. It seems almost impossible. Cancel one show and see how quickly your name gets around.

Is this ugly enough for you yet? Get heckled. Yea, it happens. No matter how well planned you are, you sometimes end up in a musically hostile environment. It always seems you get one of those inebriated Neanderthals yelling from the back of the room that his girl wants to hear some Tom Jones or even worse. He won’t take no for an answer since he already promised his girl. But think of what you have done. You put yourself in a room full of people drinking booze. A hour into your show half of them are feeling the booze, and the other half are wanting to hear numbers you don’t know. And you still have those precious few audience members that think they can play better than you. The true meaning of being an entertainer is having the ability to play, and if the group gets abrasive, find a way to control the situation without loosing face. Not an easy task if you have never been there. And how much are you making?

How easy is it to get a gig? Remember I said it seems almost impossible to get your name around but miss a gig and see how fast it does get around? Well, getting popular can be easy if your opening sentence to a club manager is "Would you like a first rate band for free?" Not even a manger with no better than a room temperature IQ would refuse an offer like that. So, the next question you and the other members of the band have to determine is how many gigs do you want to play. When you are free you suddenly become a hot commodity and are in demand. Talk about getting your name around quickly. Keep in mind that the more you play live, the more chances of encountering the ugly happens. Of course if you are playing for free, you just pick up your toys and go home. The point being, you do not want to do too many gigs. It is free and it is only so your name becomes recognizable in the music circle. Call it an investment in local advertising. My personal preference is to invest my time rather than my money. And keep in mind time and expenses are a tax write off. That’s right, if you are a business, time is a tax savings. So, like it or not, you have already started making money. The only difference it comes after the end of the tax year instead of the ol’ brown envelop at the end of the night.

But there is more to be made. You agree to play for free once, as long as you are allowed to come back for five hundred dollars. Now, as you are probably thinking, that’s no different than playing twice for two hundred and fifty a pop, and you were only asking for two hundred. Keep reading. The five hundred the club is paying you is to go to a recognized charity. The check is to be made out to this charity for five hundred dollars and a note sent with it saying compliments of your band. The club owner gets to write off the full five hundred on his taxes plus look like a good guy to the charity. I have even witnessed club owners using it for advertising purposes.

On your taxes you write off everything you did to play two gigs. Keep in mind you are not working for the club, you are donating your time to your favorite charity. Time spent on phones, travel, mileage, time playing, practicing, and set-up. Anything related to getting, preparing, and playing for the two gigs. How much is your time worth? The easiest way is to take what you normally make playing for 4 hours and figure an hourly rate. The good part is you can claim all the hours traveling, practicing, phone time, set-up, breakdown, travel back, gas, electric, phone, and instrument parts whereas you would normally get paid only for the hours you play. And you are getting your name spread around fairly easily. You become the talk of the town – a band that plays for free and gives a club tax breaks.

Now that your name is better known, the next move is to make a CD and copyright it. The fact of the matter is the minute it becomes a tangible product it is copyrighted. It is good to put the stamp on it to stifle future bootlegging and so forth but it is not necessary. Copyrighting is much easier than most would believe, but that is a different topic. The sound quality has to be good. Use a studio if you can afford it. It has to be good since you plan on selling it. Not many, just one. If you sell more, great, but the idea is to sell at least one CD. Sell it for what you want. I would suggest three dollars. Low enough so at least one person will buy it and high enough to cover the cost of the CD and cover. Three dollars may sound like you are not getting enough but wait until you turn this into a couple of thousand – much more if you are in the higher tax brackets.

By selling the CD you have set the market value to three dollars. The next step is to find a recognized charitable that is having a fund-raiser. Churches have the most of these. What you will be doing is approaching them with a donation of, lets say, twelve thousand dollars. You don’t have twelve thousand dollars but you do have something worth twelve thousand dollars – your CD. Yes, that is correct. If you were to give the church 4,000 CDs they would have a fair market value of twelve thousand dollars. However, you can’t afford to make 4,000 CDs. What to do? Donate one CD to the organization and the license to reproduce the one CD 4,000 times. Get a receipt for your donation. This is your tax write-off. All charitable donations are written off dollar for dollar. Give ten dollars to a church; subtract ten dollars from your taxable income. Give them twelve thousands dollars, take that off your taxable income. Just keep one thing in mind so you do not create a red flag. Do not write off more than you can afford to. In other words, if you only make twenty thousand dollars a year from at your regular job, do not say you donated 60 percent of your income to charity. That would definitely raise a red flag with the IRS. And do not forget you still get to write off gigs you have been doing. It will still pay you more than what you currently make for a few nights out. But it is always much more fun to do it for free.

To put this into comprehendible language and show some numbers, take a person that makes thirty thousand dollars a year from their regular job. The taxes in 2002 were, for a single person, $4453. Add the $5000 earned from gigs and the taxes due are now $5,803 – a loss of $1350 on spendable income. Subtract gas, phone and electric, about $980, minus the slight write off of $200 for expenses and you end up clearing about $2470. Now, figure how much you would have made if you played for free.

You normally play for $200 for a four-hour show. Figure four band members. That’s $50 for each member or $12.50 per hour. That is your value for music. Your time related to producing music is valued at $12.50 per hour. Now add up the hours. Each gig is 4 hours and you plan on doing only one per month (after all, it is for free) for a total of 48 hours. Plan just as much time practicing. (A lot less when you do not have to perform every other week). You are now up to 84 hours. Spending 5 hours a month making arrangements for gigs in not unreasonable, so add 60 more hours to your total. Travel 24 hours, gas $200, and equipment $300. Time and expenses are now up to $704.00. In 2002 each $100 of income cost a taxpayer $27 from their spendable income. At this point the write-off is a savings of $189.00. Now the big bucks – donating the CD.

You have found a charity that will use your CD and has agreed to give you a receipt for a $12,000 donation. Remember, each hundred dollars off your income is $27 in your pocket at the $30,000 income range. You guessed it, $3240. Add the $189 from the gigs and you have made almost $3500 playing for free. This is over $1000 more than you made by charging to play. Now imagine how much some individuals make when they are in a six-figure income bracket and their tax liability is well over $20,000!

There is a lot more you can write-off that varies on each individual’s personal tax status. The cost of the CDs, time and travel to pick them up, record (book) keeping etc. It also varies if you are a corporation or a sole proprietorship. This is all good stuff for an accountant but if you are reading this you are more than likely a musician at heart and care less about the finer points of accounting.

There are more advantages than you realize. You have fun because you enjoy playing. But you also get to help out your favorite charity. Something you may not really get to do if you relied strictly on sending money to them. By the way, guess who is promoting your CD? It is a win win situation for you and for your charity. So, go out, have fun, play for free, and ask Uncle Sam to pay you in April.