This was the best answer (from a smart friend) to another friend’s question about LLC and UBI concerns with his hobby band.

You have no requirement to collect sales tax in WA as this is a pure service, so it’s really not necessary to register with the state. They’d like you to, but it just means additional paperwork, annual filings, etc, so without a sales tax requirement, I never felt the need. An LLC is often used as legal protection, but the odds of being sued are extremely small. If you deliver a promised service, about the only risk is maybe a musician has a car accident on the way to a gig and some victim sues him and the band. Again, extremely remote and unlikely to prevail because the musicians are all independent contractors, not employees, and you do not force them to drive or drink and drive, so you’re pretty well shielded from a liability suit. Only thing I did was up my personal liability umbrella to $1M or more ‘just in case’.

Finally, don’t forget that you end up paying out 95% of the revenues to the individual contractor musicians as contract labor fees, so any profits are miniscule. I just use a Schedule C on my annual IRS tax filing to report what little income is left after expenses. You do have to keep records (I use QuickBooks) to document payments and payouts, but they are infrequent, so it’s not much work at all. You can still ‘write off’ whatever you need, but do it as a Schedule C business expense and use your SSN instead of a UBI when booking with venues. They will ask you for a W-9 so they can issue a 1099-NEC end of year. Easy-peasy.

Glad to answer any other questions, but those are the biggies. Note that I’m not a CPA, though I did spend several years working with a national CPA firm (audits & tax) and I sat for the CPA exam long ago. Passed much of it but switched back to my primary career as a software architect and DBA (minored in accounting, majored in information systems)…