My Christian Band is NOT a Hobby.
Let’s assume you have read “Is your Christian Band a Business or a Hobby?” and determined that your band is no longer a hobby. Your band has determined that you are actually a small business operating as a partnership. Let’s also assume you have read “Choose the Best Band Name” and have (and researched the availability of) a great business name.
What is the first step in declaring that your Christian band is a business?
As far as the Federal government is concerned, you need to get an Employer Identification Number (also known as an EIN or Employer Tax ID). The name is a little deceptive because it infers you have employees, but you need this number for business and tax purposes, even if you do not employ anyone.
Why does the band need an EIN?
The EIN identifies your business entity (in other words, for business and tax purposes, your business takes on a life of it’s own rather than being combined with your personal business and taxes). Banks will ask for your EIN before they will be able to open a commercial checking account or issue a band credit or debit card. Every time your band does anything with a state or local government you will be asked for your EIN. Promoters (or anyone) that pays the band more than $500 should be asking for your EIN so they can send you a 1090 form (but most of them do not know they are supposed to do this).
How does the band get an EIN?
There are 4 methods to obtain an EIN. I highly recommend you use the first option of applying online – it’s quick and easy.
Here’s what the IRS says on the How to Apply for an EIN page:
The Internet EIN application is the preferred method for customers to apply for and obtain an EIN. Once the application is completed, the information is validated during the online session, and an EIN is issued immediately. The online application process is available for all entities whose principal business, office or agency, or legal residence (in the case of an individual), is located in the United States or U.S. Territories. The principal officer, general partner, grantor, owner, trustor etc. must have a valid Taxpayer Identification Number (Social Security Number, Employer Identification Number, or Individual Taxpayer Identification Number) in order to use the online application.
Apply By EIN Toll-Free Telephone Service
Taxpayers can obtain an EIN immediately by calling the Business & Specialty Tax Line at (800) 829-4933. The hours of operation are 7:00 a.m. – 7:00 p.m. local time, Monday through Friday. An assistor takes the information, assigns the EIN, and provides the number to an authorized individual over the telephone. Note: International applicants must call (267) 941-1099 (Not a toll-free number).
Apply By FAX
Taxpayers can FAX the completed Form SS-4 (PDF) application to their state FAX number (see Where to File – Business Forms and Filing Addresses), after ensuring that the Form SS-4 contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type. If the taxpayer’s fax number is provided, a fax will be sent back with the EIN within four (4) business days.
Apply By Mail
The processing timeframe for an EIN application received by mail is four weeks. Ensure that the Form SS-4 (PDF) contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type and mailed to the taxpayer. Find out where to mail Form SS-4 on the “Where to File Your Taxes” (for Form SS-4) page.
Why does an EIN matter? It is so much easier to operate with “cash under the table”.
Your Christian bands business is supposed to be the infrastructure that supports your ministry. I know that creative people frequently do not like structure or paperwork. But we all know what happens to a house built without a foundation. Setting up a solid foundation frees you up to create for a long time in the future without having to be as concerned about your ministry falling apart.
More importantly, obedience to Gods commands opens the door for His blessings. I would rather have His blessings than a short term life of ease. I live by His blessings and I protect those blessings by being as obedient as I know to be. In order to be obedient, I must follow the laws of the land…
Pay your taxes, too, for these same reasons. For government workers need to be paid. They are serving God in what they do. Give to everyone what you owe them: Pay your taxes and government fees to those who collect them, and give respect and honor to those who are in authority. Romans 13:6-7 NLT
The United States government allows us to structure our businesses in the form that works best for us for legal and tax purposes. But the government does require a business structure and paperwork for taxes. So, if you are more than a hobby – a business – do the work to operate your Christian Bands business legally. It will cost you money and time, but my experience has been that Gods blessings will more than make up the difference.
If you are not comfortable setting up you Christian bands business structure by yourself, check out LegalZoom. They have on-line forms to walk you through the process.
Do you need help setting up your Christian bands business structure?
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