AKRON, Ohio — After starting his own business during the pandemic, a man with a passion for music now is preparing for a big change to the way small business owners accept payment.
Music is an art Jeff Klemm said is part of who he is. He started his first band at age 14. By the time he was 20, his band released an extended play.
What You Need To Know
- Jeff Klemm started his first band at 14. By the time he was 20, his band released an EP
- He now performs in a band called Maid Myriad, works on solo projects and operates his own business
- Klemm, like many business owners, use third-party settlement organization tools like Venmo and Paypal for transactions
- By 2023, people will receive a 1099-K form to make sure digital transactions are taxed appropriately
“I think music is a language, and so many people may not know how to speak it, but they can hear it and connect with it, which I think is so wonderful,” he said.
These days, he continues to perform in a band called Maid Myriad, work on solo projects and run his own business, called Mr. Jeff.
His business focuses on teaching music to children. Klemm is a former music teacher and worked at Shaw JCC of Akron for three years. His decision to start the business is in part with the COVID-19 pandemic happening and the birth of his child.
“It was really just a way to connect with the kids when they were home. Not able to go do anything, and it's hard enough for adults to navigate everything that's going on,” he said. “I mean, imagine the kids. So, I just wanted to be like that fun smiley face for the kiddos during the pandemic.”
Tax laws are changing and will soon impact a common tool business owners, like Klemm, use for transactions.
“It’s really the convenience of being able to just pop on your phone and pay someone for something,” he said.
The tools are third-party settlement organizations like Venmo and Paypal.
In 2021, a new tax reporting requirement was signed into law. The new requirement is part of the American Rescue Plan Act. By 2023, people using these organizations will receive a 1099-K form to make sure their digital transactions on these apps are taxed appropriately.
“Now anything over $600 is going to be taxed and some people who are sort of trying to dodge the tax are now not going to be able to do that,” he said.
Klemm said he remains hopeful.
“I called my tax advisor just to ensure that accepting payments via this way was legal and everything was fine and she said 'oh yeah…you claim it, as long as you’re keeping good records then everything is good,'” Klemm said. “So as long as you keep the good record of everything you’re doing, just like any small business should, then you’re good.”
Klemm suggests people consult with a tax professional on the changes.
For more information on Klemm’s music and/or business, click here.
