One of the most important parts of running your acting business is maintaining good finances. And part of that is smartly preparing your taxes, and logging and tracking your expenses.
The IRS has a special category for professionals known as the "Qualified Performing Artist" (click here to learn more.) When basic qualifications are met, actors are able to deduct expenses that were made in support of their careers in excess of what is normally allowed by law. To claim a deduction, you must have excellent records, including the receipt which shows the date, and circumstances of the expense (think of "who, what, where, when and why" as a guide.) Here is a sample list of deductions actors, with good records, can take:
Marketing
Demo reels (production and duplication), business cards, postcards, headshots, website hosting. trade publications (Backstage, Ross Reports), casting websites.
Education
Classes, workshops or coaching sessions, dance or voice lessons, tickets to shows (movies or theater), musical theater CDs.
Utilities
Fees for cell phone, internet service, TV/cable service (be sure to calculate what percent of the time is used for the maintenance/research of your career, and only deduct that percentage.)
Local Travel
Subway/taxi/cab fare or mileage allowance for travel to and from anything related to your career.
Entertainment/Food
Food/drink purchased while discussing your career (you can only deduct 50% of $$ spent- the government assumes you are paying for both parties, and they will only allow you to deduct the food you buy for others, not your own.)
Other expenses
Agent/manager commission, union dues, office supplies, mailings/postage, out-of-town travel and food (100% deductable)
Another thing that is imperative to your record keeping is to keep a very detailed diary/calendar of your efforts. If you like the computer, use your Outlook or Calendar program. if you like paper, use a tool like the Actor's Ultimate Resource Guide (see info, right.) But- DO SOMETHING.
Though I always recommend using a tax professional, I have guided many actors through the logging and tracking of their expenses, and I would love to help you too! Contact me to set up your free consultation.
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Erin Cronican's career as a professional actor and career coach has spanned the last 25 years in New York City, Los Angeles and San Diego. She has appeared in major feature films and on television, and has done national tours of plays and musicals. She has worked in the advertising & marketing departments of major corporations, film production companies, theater magazines, and non-profit acting organizations. To learn more, check out http://www.theactorsenterprise.org.
3 COMMENTS - Click to READ:
Another neat little deduction is to assign a credit card strictly to your acting career - no personal expenses what-so-ever - because interest on business debt is tax deductible, whereas interest on personal debt is not.
I think that is a great suggestion-especially since we make so many investments for our careers (classes, headshots, etc)
Oh wow. I have read Miatas article at PerformerPages.com (good bookmark) on this credit card topic and it helped me instead of throwing it all on one card and the sectioning off in the Performer Track account. It's absolutely unreal how much we as performers spend without asking what Bryan at Performer Track says... "what have you done 4 me lately" to expenses like acting classes, online casting profiles, postcard mailings, my website,etc.,etc.
Cheers to tracking!
Arie
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