I'm a sole proprietor new to hiring sub-contractors and wondered if anyone has experience with reporting (to the IRS) payments to the SAG Pension & Health Fund. I made a documentary for a University this past year, and the University hired most of the contractors (e.g., DP and sound recordist). In the last frenzied weeks of production, I hired a narrator for the project, and then included that cost in my invoice to the University.
I should mention that I am not a SAG signatory company, and in consultation with the performer filled out the paperwork for a "one production only" contract. The voice actor agreed to work cheap to fit our low budget, and so we didn't use a payroll company.
To further complicate matters, the actor is incorporated. So I wrote one check to her corporation and another check (with the appropriate 14+%) to the SAG P&H fund, and mailed both checks off to the local SAG office. Then I finished the doc and collapsed.
Now it is tax season and I realize I do not know where on my Schedule C to list the expense of contributing to the SAG P&H fund. Any ideas?
The Pension & Welfare payment is probably not enough money for it to be much of an issue even for the IRS. Since you paid the talent's corporation and not the talent as an employee, the P&W is just a miscellaneous expense. (IMHO. I'm not a lawyer or an accountant, just a Signatory to both AFTRA and SAG.)
Going forward, when hopefully this will become more of an issue because of more work, get an accountant to tell you how to set this up. The primary reason that paymasters (Like Trice in DC) are in business is so that as producers we just write one check, which is an expense and the paymaster becomes the employer, responsible for all the taxes, etc.
thanks for your advice, and you're right -- I've spent more on paper for my printer and photocopier this year than on the SAG pension payment. I'm mostly trying to educate myself for future projects. What I've learned -- use a paymaster.
And I should say thanks for your "12 Things I Know Now" article a while back. I was just beginning my professional video career and appreciated your words of wisdom on prices and keeping good relations with your vendors. And having that advice come from a fellow Marylander was cool!
fo real, doah.
My first year in business for myself, I racked up 60k in pimpin' Sam debt. Since playing their game, I now pay around 20k a year.
Our system is NOT set up for the self-employed. It's set up to discourage it, make ya get in line and pay income taxes from every check written.
Man if we wanted to do that, we prolly would not have revolted way back when.