📝Tax & Reporting

Understanding Your Tax Obligations

As an event host earning income through Clubly, you have tax obligations. This guide explains what you need to know about reporting your earnings and managing taxes.

⚠️ Important Disclaimer

We are not tax professionals. This guide provides general information only. Always consult a qualified tax professional or CPA for advice specific to your situation. Tax laws vary by location and change frequently.

🎯 Quick Overview

What You Need to Know:

  • Income from ticket sales is taxable

  • You'll receive 1099-K form if you earn $600+

  • Keep detailed records

  • Deduct business expenses

  • May owe quarterly estimated taxes

Who Issues Tax Forms:

  • Stripe (payment processor)

  • Not Clubly directly

  • Based on your gross revenue

📄 Form 1099-K

What is a 1099-K?

Payment Card and Third Party Network Transactions Form

  • Reports gross payment volume

  • Issued by payment processors (Stripe)

  • Sent to you AND the IRS

  • Required if you meet thresholds

Who Receives 1099-K?

Thresholds (2024):

$600 or more in gross payments

Previously:
$20,000 AND 200+ transactions
(Changed in 2024)

New Rule:
$600+ regardless of transactions

When You'll Receive It

Timeline:

January 31, 2025
For 2024 earnings

Sent via:
- Email (from Stripe)
- Mail (if requested)
- Stripe Dashboard (always available)

What's Reported

1099-K Shows:

Box 1a: Gross amount of payment card/third-party transactions

Example:
Total ticket revenue: $50,000
Platform fees: $5,000
Your net: $45,000

1099-K shows: $50,000 ⚠️
(Gross, not net!)

Important:

  • Reports GROSS revenue

  • Does NOT subtract fees

  • Does NOT subtract expenses

  • You deduct those on your tax return

💼 Types of Business Structure

Sole Proprietor / Individual

Most Common for:

  • Solo promoters

  • Side hustles

  • Starting out

  • No formal business entity

Tax Filing:

  • Schedule C (Form 1040)

  • Self-employment tax

  • Personal tax return

Pros:

  • ✅ Simple setup

  • ✅ Easy accounting

  • ✅ No business registration needed

Cons:

  • ❌ Personal liability

  • ❌ Self-employment tax (15.3%)

  • ❌ No liability protection

LLC (Limited Liability Company)

Good For:

  • Established promoters

  • Multiple events

  • Want liability protection

  • Professional operation

Tax Filing:

  • Single-member: Schedule C

  • Multi-member: Partnership return

  • Can elect S-Corp status

Pros:

  • ✅ Liability protection

  • ✅ Professional image

  • ✅ Tax flexibility

  • ✅ Business deductions

Cons:

  • ❌ State filing fees

  • ❌ Annual reports

  • ❌ More paperwork

S-Corporation

Best For:

  • High earners ($60k+)

  • Want to save on self-employment tax

  • Multiple owners possible

  • Serious operations

Tax Filing:

  • Form 1120-S

  • K-1 for owners

  • Payroll required

Pros:

  • ✅ Self-employment tax savings

  • ✅ Salary + distributions

  • ✅ Professional structure

Cons:

  • ❌ Complex setup

  • ❌ Payroll requirements

  • ❌ More accounting costs

  • ❌ Strict IRS rules

C-Corporation

Only For:

  • Large operations

  • Seeking investment

  • Multiple shareholders

  • Going public (future)

Not Recommended for most event hosts.

💰 What's Taxable Income?

Gross Revenue

Your Ticket Sales:

All ticket revenue is taxable income

Example:
GA tickets: $10,000
VIP tickets: $5,000
Total: $15,000 taxable

Platform Fees

Clubly's Fee:

Charged to customers
Not your income
Not taxable to you

Example:
Customer pays: $55.99 ($50 + $5.99 fee)
Your income: $50.00
Clubly income: $5.99

Affiliate Commissions

You Pay Affiliates:

Deductible business expense
Reduces your taxable income

Example:
Revenue: $10,000
Paid affiliates: $1,000
Taxable income: $9,000

📊 Deductible Expenses

Common Event Expenses

Venues & Production:

✅ Venue rental
✅ Sound/lighting equipment
✅ DJ/talent fees
✅ Security services
✅ Insurance
✅ Decorations
✅ Equipment rental

Marketing & Promotion:

✅ Flyers/posters
✅ Facebook/Instagram ads
✅ Photography
✅ Videography
✅ SMS marketing (Clubly)
✅ Email marketing
✅ Website costs
✅ Graphic design

Fees & Services:

✅ Stripe processing fees
✅ Clubly platform fees (if you absorb them)
✅ Accounting/bookkeeping
✅ Legal fees
✅ Business licenses
✅ Permits

Office & Operations:

✅ Phone/internet
✅ Computer/laptop
✅ Software subscriptions
✅ Office supplies
✅ Mileage (business travel)
✅ Meals (with clients, 50%)

Staff & Labor:

✅ W-2 employee wages
✅ 1099 contractor payments
✅ Affiliate commissions
✅ Security staff
✅ Setup/cleanup crew

What You CAN'T Deduct

Personal Expenses:

❌ Personal clothing (unless costume/uniform)
❌ Personal meals (unless business meeting)
❌ Personal car (unless business use tracked)
❌ Home rent (unless home office)
❌ Entertainment (mostly eliminated)

📝 Record Keeping

What to Save

Financial Records:

✅ Bank statements
✅ Credit card statements
✅ Receipts (all business purchases)
✅ Invoices (sent & received)
✅ Contracts
✅ 1099-K forms
✅ Payment processor statements

Clubly Records:

Download from Dashboard:
- Event reports
- Payout history
- Fee breakdowns
- Ticket sales
- Attendee lists

How Long to Keep

IRS Requirements:

3 years: General records
6 years: If understated income
7 years: Bad debt deductions
Indefinitely: Tax returns (keep forever!)

Organization Tips

Digital Systems:

Tools:
- QuickBooks
- Wave (free)
- FreshBooks
- Google Sheets (simple)

Save:
- Scan all receipts
- Cloud backup
- Organized folders
- Monthly reconciliation

Physical Backup:

Keep physical copies:
- Important contracts
- Tax returns
- Major receipts
- Legal documents

🗓️ Quarterly Estimated Taxes

Who Needs to Pay?

If You Expect to Owe $1,000+:

Example:
Expect to earn: $40,000
Tax rate ~25%: $10,000 owed
- Current withholding: $0
= Owe: $10,000

Must pay quarterly!

Payment Dates

2025 Deadlines:

Q1: January 1 - March 31
Due: April 15, 2025

Q2: April 1 - May 31
Due: June 16, 2025

Q3: June 1 - August 31
Due: September 15, 2025

Q4: September 1 - December 31
Due: January 15, 2026

How Much to Pay

Safe Harbor Rule:

Pay either:
- 90% of current year's tax
- 100% of last year's tax
  (110% if high income)

Avoid underpayment penalties

Calculating:

Expected annual income: $40,000
Estimated tax rate: 25%
Total tax: $10,000
Per quarter: $2,500

How to Pay

IRS Direct Pay:

  • irs.gov/payments

  • Free

  • Direct from bank account

EFTPS:

  • eftps.gov

  • Electronic Federal Tax Payment System

  • Schedule in advance

Form 1040-ES:

  • Mail with check

  • Old-fashioned way

  • Paper vouchers

📑 Annual Tax Filing

Forms You'll Need

Sole Proprietor:

Form 1040: Personal tax return
Schedule C: Business profit/loss
Schedule SE: Self-employment tax
Form 1040-ES: Estimated payments

LLC (Single-Member):

Same as sole proprietor
Plus: State LLC filings

S-Corp:

Form 1120-S: Corporate return
K-1: Owner's share
W-2: Your salary
Form 940/941: Payroll taxes

Deadlines

Individual/Sole Prop:

April 15: Tax return due
October 15: Extended deadline (if filed extension)

S-Corp:

March 15: Corporate return due
September 15: Extended deadline

Tax Software

DIY Options:

- TurboTax Self-Employed: ~$120
- H&R Block Premium: ~$90
- TaxAct Self-Employed: ~$65
- FreeTaxUSA: ~$15 (budget option)

For Simple Returns:

  • IRS Free File (if income < $79k)

  • Cash App Taxes (free)

Hiring a Professional

When to Hire CPA:

  • First year in business

  • Earned > $50k

  • Multiple income sources

  • Want to maximize deductions

  • Save time and stress

Cost:

  • $300-$1,000 for most event hosts

  • Worth it for peace of mind

💡 Tax Strategies

Maximize Deductions

Track Everything:

Use apps:
- Expensify
- QuickBooks
- Wave
- Stride (mileage)

Save all receipts!
Small deductions add up.

Home Office Deduction:

If you have dedicated space:
- Measure square footage
- Calculate percentage
- Deduct: Rent, utilities, internet

Example:
Home: 1,000 sq ft
Office: 100 sq ft (10%)
Rent: $2,000/mo
Deduction: $200/mo ($2,400/year)

Retirement Contributions

Solo 401(k):

Contribute up to:
$23,000 (2024) as employee
Plus: 25% of net earnings as employer
Total limit: $69,000

Benefits:
- Reduces taxable income
- Tax-deferred growth
- Save for future

SEP IRA:

Contribute up to:
25% of net earnings
Max: $69,000

Simpler than 401(k)
Good for high earners

Timing Income

Strategic Timing:

Good year (high income)?
- Accelerate expenses (pay early)
- Defer income (delay until Jan)

Bad year (low income)?
- Accelerate income (get paid now)
- Defer expenses (pay in new year)

🌍 State & Local Taxes

State Income Tax

Varies by State:

No income tax:
- Florida
- Texas
- Nevada
- Washington
- Others

Progressive tax:
- California (up to 13.3%)
- New York (up to 10.9%)
- Others

Your state requirements vary!

Sales Tax

Some States Require:

Collecting sales tax on tickets
Example: Texas

Check your state laws
May need to:
- Register for permit
- Collect from customers
- Remit to state
- File returns

Local Business Licenses

City/County May Require:

- Business license
- Event permits
- Vendor permits
- Zoning approval

Costs: $50-$500 typically
Check local requirements

🚨 Common Mistakes

Mistake #1: Not Keeping Records

Problem:

No receipts = No deductions
Leaving money on table
IRS audit problems

Solution:

  • Save everything

  • Use digital tools

  • Organize monthly

Mistake #2: Missing Quarterly Payments

Problem:

Penalties + interest
Can be 5-10% extra
Adds up fast

Solution:

  • Set calendar reminders

  • Automate payments

  • Pay safe harbor amount

Mistake #3: Mixing Personal & Business

Problem:

Hard to track expenses
Looks unprofessional
Audit red flag

Solution:

  • Separate bank account

  • Business credit card

  • Clean books

Mistake #4: Forgetting Self-Employment Tax

Problem:

Income tax: 25%
+ Self-employment tax: 15.3%
Total: 40.3%!

Many forget the 15.3%
Owe more than expected

Solution:

  • Plan for full amount

  • Set aside 30-40% of income

  • Pay quarterly

Mistake #5: DIY Complex Returns

Problem:

Missing deductions
Filing errors
Audit risk
Time wasted

Solution:

  • Hire CPA for first year

  • Learn what they do

  • Maybe DIY later with knowledge

🆘 Getting Help

Free Resources

IRS:

  • irs.gov

  • Publication 334 (Small Business Tax Guide)

  • Publication 463 (Travel, Gift & Car)

  • Publication 587 (Home Office)

SCORE:

  • score.org

  • Free mentorship

  • Tax workshops

  • Business advice

CPA (Certified Public Accountant):

Services:
- Tax preparation
- Planning & strategy
- Audit support
- Business advice

Cost: $300-$1,500/year
Worth it!

Bookkeeper:

Services:
- Monthly reconciliation
- Expense tracking
- Financial reports
- QuickBooks setup

Cost: $100-$500/month
Saves you time

Tax Attorney:

For:
- Legal issues
- IRS disputes
- Complex situations
- Asset protection

Cost: $200-$500/hour
Specialized help

📞 Contact Info

Clubly Support:

Stripe Support:

IRS:

  • 📱 1-800-829-1040

  • For: Tax questions, payment issues

🔄 Related Articles

❓ Common Questions

Do I have to pay taxes on ticket sales?

Yes. All income is taxable. You'll receive 1099-K if you earn $600+.

Can I deduct Clubly's platform fees?

If you absorb them (don't pass to customer), yes. If customer pays, no.

What if I don't receive a 1099-K?

You still must report all income. Don't wait for the form.

Are affiliate commissions I pay deductible?

Yes! Business expense. Reduces your taxable income.

Do I need an EIN?

Not required for sole proprietors, but recommended. Get free at irs.gov.

Should I form an LLC?

Depends on your situation. Provides liability protection. Consult CPA.

What tax rate should I expect?

Plan for 30-40% total (income + self-employment tax). Varies by bracket.

Stay Compliant: Don't mess with taxes. Keep good records, pay quarterly, and hire a pro if unsure. Penalties are not worth it!

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