Have a Tax Question? Ask a Tax Expert
Good evening. To protect yourself from any personal liability from anything related to this event, I would recommend that you form an LLC and then get your LLC its own Taxpayer Identification Number. That will protect your personal assets from any liabilities connected with this event.
I hope this has given you the guidance you were seeking. I wish you the best of luck!
If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.
If I have adequately answered your question, even though the answer might not have been the one for which you hoped, I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.
If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you.
The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
so you can't give me the information about washington states tax law
if i have every person attending sign a disclaimer and a release of liabilities would this protect me
I don't know if disclaimers are enforced there, but I do know that you can set up an LLC almost for free by going to whichever website--probably the Secretary of State--and downloading template for articles of incorporation. This is a lot cheaper than enforcing disclaimers through the courts. I actually would advise you to take this a step further and form a regular corporation then elect to be an S-Corp. You'll still have the asset protection, but you'll be able to have the Corporation show the receipt of unearned revenue without having to report this as personal income on your individual return this year. Hope this helps, Bill
Did I throw too much at you? The main reason I don't like you running this through an LLC is because the IRS considers single-member LLCs to be disregarded entities. That means you'd be reporting the activity on Sch. C. There is no place on Sch C to enter unearned income. Since you're probably a cash-based filer, the IRS could tax you on these receipts before you'd get the chance to have expenses to set against the income. Thanks, Bill
Does this event have its own tax ID number issued by the IRS? If it doesn't, then your or someone else's social security number is XXXXX to the event's bank account. This is the controlling issue. If your social security number is XXXXX the bank statements, the account activity will be reported to the IRS with all of the other activity like your wages and mortgage interest. It does not matter that the event's name is XXXXX XXXXX the statements. If this event is not incorporated, you can visit the State of Washington's Secretary of State's website at www.sos.wa.gov/corps/ to see what is required to incorporate. Once the name is XXXXX XXXXX should be able to go the IRS's website at https://sa1.www4.irs.gov/modiein/individual/index.jsp and apply for the tax ID on line. After you have this number in hand, go to the bank and change the event's account information to reflect its tax ID.
Hope this helps, Bill