Our latest features will not only make your end of year tax process more fluid, but allow you to plan a bigger and better 2023—sending into new geographies and automating some manual processes.
All Gain, No Pain: Music Distribution Platform Soundrop Gets Tax Compliant With Trolley
Getting songs onto platforms like Spotify, Apple Music, and TikTok is difficult for independent artists to do by themselves. Working with a distributor makes this much easier, but not all digital distributors are created equal—they can leave artists on the hook with subscription payments or paying fees to receive their hard-earned royalties.
Soundrop is an artist-centric platform for independent musicians to monetize their talent without the headaches of royalty administration or licensing. Artists simply upload their music directly to Soundrop for a 99-cents-per-track flat fee. This secures their song license, automatically pays mechanical royalties to songwriters, and distributes to artist-designated platforms.
Artists can even split their royalty payments among contributors so all relevant parties receive their share every month without a headache or extra fee.
Our priority was to quickly onboard users and issue 1099s & 1042s in the 2021 tax year, a target we could not have met with in-house development. We were able to do this with Trolley.”
“We are focused on making music distribution and monetization accessible to artists who don’t have a traditional label or distribution deal,” says Morgan Levy, Director of Product at Soundrop. “A lot of our artists make a good living doing this.”
"We’ve really expanded our footprint and extended our reach into more countries. It frees up time which can be devoted to rolling out new features for our users. That’s my favorite part of Trolley."
On top of this, artists, especially those in countries where PayPal isn’t accepted, were asking for a direct deposit option. With these concerns in mind, Soundrop began the search for partners to improve and expand their artist payment options.
Soundrop was also looking for a tax solution to issue 1099 and 1042 forms to all their artists earning over a certain threshold. Imagine their delight when they discovered a solution that incorporated both payment options and a tax solution.
A Solution for Payouts & Taxes
“In certain regions, artists cannot be paid through PayPal. By adding Trolley, and with it, direct deposit, we’ve unlocked all new geographies. It’s really exciting to see,” Levy says.
To issue the correct tax forms, Soundrop needed artists to provide their tax information quickly so they didn’t miss receiving a monthly royalty payment. Trolley’s simple interface made that speed possible. “With the widget, the flow is very simple,” Levy explains. “Setup for payments and tax information is in one place. Most artists have a simple tax situation, so it’s easy for them to onboard or update their information.”
Critical to saving Soundrop time is Trolley’s Invoices feature. Rather than sending individual transfers based on tax category, Invoices allows Soundrop to make consolidated payments that clearly break down the tax reportable and non-reportable portions. Because Soundrop felt strongly about keeping payment fees as low as possible for their artists, “the ability to make a single payment built from multiple transactions reduces the cost of doing business. It’s been really big for us,” Levy shares.
“Using Trolley for payouts has significantly cut down the manual processing time required of our accounting teams. We estimate we’re saving each person on our team of four at least a day’s work per payment run.”
Partnering with Trolley paved the way for Soundrop to streamline their tax compliance processes. “All artists, whether they’re located in the USA or overseas, who earn above certain thresholds require an appropriate tax form. This means all of our artist base needs a form on file,” Levy shared. “It was important that we can collect and remit tax forms easily.”
“We chose Trolley because they had those abilities, could tie payments directly to their tax purposes for a smoother end-of-year process, and were open to feature requests.”
For example, when Soundrop started with Trolley, they had to review every submitted tax form that raised any kind of flag, which was not sustainable for their team. Soundrop requested the ability to set different approval settings and automatically bypass certain warnings.
“That new feature was delivered very quickly, which saved our trust & safety team hours of manual labor,” Levy notes. “Our priority was to quickly onboard users and issue 1099s & 1042s in the 2021 tax year, a target we could not have met with in-house development. We were able to do this with Trolley.”
Because their teams are always looking to grow monetization opportunities for their artists, Trolley will be an important factor in scaling as Soundrop encounters more and bigger payouts. But one thing Soundrop knows for sure: Trolley will be crucial to reaching musicians in every corner of the globe. Levy sums it up: “As our artists’ earnings continue to grow, Trolley allows us to easily and reliably deliver larger, more frequent payouts.”
“We’ve already recommended Trolley, and some of our [Downtown Music Group] sister companies are onboarding now. We’ve been really happy with the collaboration and support from the Trolley team.”
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