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Hey guys,
Searched around in the forums for this but couldn’t find anything (apart from a post on how to transfer writing royalties from an individual to a corporation).
Does any of you have an entity, such as s-corp or LLC, that you use to register your writing royalties?
I’ve been doing music and sound design/mixing work for a few years and I use an s-corp to get paid because it is financially VERY advantageous. Last year I started making royalties money from BMI which goes on a 1099 under my SSN, so it’s personal income.
Since royalties are subject to self-employment taxes I’d rather have them come to my s-corp so I can split the income up between salary and distributions, on top of being able to do more writeoffs in comparison to a self-employed individual. When the income goes above $50K/year the difference between getting paid in your name and through an s-corp are very apparent.It seems to me like it would be best and I was wondering if any of you is doing this and if you can share your experience? I’m not looking for legal/accounting advice, just personal experiences.
Some questions/thoughts:
– Are libraries going to have issues signing a contract between them and a company VS an individual?
– Can you even do this with BMI? (register a writer account under an entity rather than an actual person)
– Are there obvious disadvantages?
– Anything you’d like to share?Thank you!
– Are libraries going to have issues signing a contract between them and a company VS an individual?
No, most big ones are used to it because most US composers that have been writing library music for a while usually have an LLC or S corp.– Can you even do this with BMI? (register a writer account under an entity rather than an actual person)
Yes. Just call them for the form specifically designed for you to assign your writer’s royalties to your company name.– Are there obvious disadvantages?
no, aside from the payroll, minutes keeping etc costs of running an S corp, and the PITA of having to pay yourself from the corporate account anytime you need money, but you’re already familiar with all that.