Talent Payment Accounting

Just wondering how content producers account for talent/actor payments. Obviously I’d like to be able to claim it as an expense. I’m just not sure how the talent/actor will respond to that. I’ll be keeping their SIN (SSN) number on file as part of their identification but it would be pretty cheeky to just use it and tell them too bad.

I thought I’d then just suck it up and pay them with after tax dollars. It would suck but oh well…that’s the cost of doing business. It then occurred to me if I ever got audited, I’d have no receipts for talent fees and ‘paying under the table’ is pretty much as bad as ‘being paid under the table.’

Your thoughts?

We pay them by check and tell them up front that we will be sending them a 1099 at the end of the year. Haven't yet had a problem with a model being upset about that. Our Model Agreement also clearly spells out that we consider them an Independent Contractor, they will be getting a 1099 and they are responsible for all filings. Keep in mind though, that if you film in California, the state of California has determined that models are NOT Independent Contractors, but rather employees.

What they do with the 1099 is, of course, between them and the IRS but at least we have covered our bases, done it correctly and written those expenses off as legitimate business expenses.

In the back of my mind I always keep thinking of the fact that Al Capone didn't go to prison for all those people he killed or had killed, they put him there for tax evasion.

Bill

Expense, check, 1099.

Jimmy