Last week I had the pleasure of sitting on a panel with other financial professionals to discuss “Money Strategies for Artists.” I read off a list of deductions that are fully deductible for artists in their particular industry. I thought I would share that list with you all as well. If you are an Actor, Dancer, Photographer, etc. you do not want to overlook these deductions:
Coaching & Lessons
Downloads, CDs, & Recordings
Out-Of-Town Business Trips
Rents - Rehearsal Hall
Professional Society Meetings
Parking Fees & Tolls
Audition Tapes, Videos & DVDs Airfare
Film & Processing
Resume’ and Portfolio
Website Development & Hosting
Communications & Wi-Fi access
Costumes - Wardrobe (special)
Keep in mind that any expenses that is ordinary or necessary in your line of work is deductible. In addition to the list above, here are a few tips to keep your expenses low while building a career using your craft.
Barter and trade – You have a talent that can potentially be a resource for someone else.
Work virtually – Cut cost by sharing office space with other artist that compliment your service.
Buy used equipment – You may want to start out small by purchasing used equipment at first.
Keep personal and business finances separate – I can’t stress this enough. Keeping your business finances separate from your personal finances will help you manage your business better. It will give you a better picture of how your business is performing. By combining the two, you are opening your personal finances up to liabilities related to your business.
Pay your Taxes - As you are making money set some aside for taxes. As a self-employed person, you are now responsible for “Self Employment taxes.” Self-employment taxes is basically double FICA. As an employee you are taxed at 7.65% for FICA, you employer has to match that 7.65% and send both “buckets” to the IRS/SSA. Being self-employed you are responsible for both the employee and employer portions for FICA, therefore your tax rate just DOUBLED.
If you are an artist or small business owner looking to maximize your deductions, please contact WATS CPA at 561-450-9287.