Tax Advice for Actors from an Actor
Who filed early and got her refund already? This girl!
Who will be empowered to get all the deductions allowed to them next year? This girl...and you, too.
Doing your taxes can be overwhelming, especially if you are unaware how to handle the different types of income on your yearly return. As a performing artist, I received a handful of W2s and 1099s from the various gigs I did this year. So where to go next?
The most concise resource for doing your taxes as a "creative" person with a multiple income situation is the book, "New Tax Guide for Writers, Artists, Performers & Other Creative People" by Peter Jason Riley. Riley breaks down common tax situations for the aforementioned off-the-beaten-path careers. Don't let the title fool you, actors are covered in length as well.
In the case of the typical actor, the income comes down to two types: W2 (pre-taxed) and 1099 (untaxed). In a W2 income situation, you are an employee, and your income is regularly taxed at each paycheck. Just put that baby through TurboTax and let it figure out how much you owe/how much you will get refunded depending on your situation. There isn't a lot of leg work that us, as actors, need to do.
1099s is where we need to be careful. Due to the fact that you are signed on as a contractor, not an employee, your tax is not witheld by your employer throughout the year. Instead you are expected to pay the self-income tax on your 1099-income at the end of the year, which is currently at 15.3%. To counteract that for the best refund possible, we can make deductions. Oh baby, can we deduct.
You can deduct anything that is a reasonable and necessary business expense. Things like post-office expenses, headshot costs, website fees, education, union dues, 50% of meals on job hunting (aka auditioning), traveling for work can all be deducted. Track your auditions through the year, and deduct not only your job-seeking mileage, but also the depreciation on your car. Do you use your new iPhone 50% of the time searching audition posts, and keeping up with important emails? Depreciate and deduct that, too.
This may seen complicated, but the hardest part is saving and going through your receipts. Collect them through the year, or print out your credit card statements and categorize the expenses. Run it through TurboTax and you'll be amazed at how your refund goes up.
It is worth mentioning the Qualifying Performing Artist credit. You must have worked for two or more employers in the year, recieve at least $200 from each employer, job related expenses are 10% of income, and adjusted gross income is less than $16,000.
Check out the IRS' recommendations for free online e-file programs. I used Turbo-Tax online for the second year in a row; and it really couldn't be easier.
(picture courtesy of amazon.com)