Are you one of the many of actors who earn income from your acting? If so, congratulations! You’ve had the opportunity to enjoy the artistic side of an actors’ career throughout the year. But at tax time, it’s time to get down to the nitty gritty of numbers. Actors typically file their taxes as self-employed as long as they derive most of their money from their acting jobs in that tax year. So get ready to fill out a regular 1040 income tax form as a Schedule C, and identify yourself as your own business. Attach all 1099-MISC forms you receive to report your self-employment income. Being that your acting is considered a business, you are allowed to write off expenses that are directly related to acting, as long as they fall under the category of ordinary and necessary–and are not considered extravagant. And if you have W-2 employee income, your expenses will go on a Schedule A, but the kinds of write offs you’re allowed are the same.
During the year, actors can save their receipts, underline the purchases that pertain to their acting, and maybe even jot down notes on the back of the receipts to keep track of all they spend in pursuit of acting gigs. Doing so will help you take advantage of the many deductions available to reduce your taxable income. Here are examples of expenses actors can deduct to reduce the amount of taxes they owe.
Travel for Acting Purposes: If you need to travel any distance whether short or long in order to work as an actor, save all your transportation receipts. For long distances, this includes reasonable expenses for airline tickets, taxis, and hotel costs. Don’t forget to save your meal receipts when you travel because they can translate into a 50% deduction. As far as traveling locally, include your transportation costs for getting to acting classes, auditions, rehearsals, as well as shopping for acting supplies. If you drive a car, keep records of all your car expenses for gas, oil, car washes, repairs, and keep track of your mileage. If you use public transportation, keep track of all you spend. For those of you who choose not to keep detailed records, you can use the standard rate which requires you to only keep track of the amount of miles you drive in pursuit of acting; then you don’t need to list what you spent on your car. The standard mileage deduction to write off is 51 cents per mile.
Office Expenses and Supplies: Do you have a designated office in your home that you use strictly for acting purposes? The space might be used exclusively for rehearsing, desk work, or storage. If so, you may deduct the costs of maintaining this home office by using Form 8829. This can translate into worthwhile savings especially for renters. After all, being able to deduct a portion of your monthly rent can add up to a good chunk of change. Also, add any business supplies that you purchase which will be used within that year like printer ink, stamps, envelopes, and staples.
Depreciation: Any acting business items you purchase that last over one year can be deducted in small portions over a period of years. For example, actors who buy digital cameras, computers, sound equipment, cell phones, and even educational texts can list them as depreciating items–essentially spreading the deductions over several years. But small businesses also have a choice of deducting the whole cost of such items in one year as described in the Internal Revenue’s Code Section 179. You might want a tax professional to assist you with which of these two options best suits your needs.
Union Dues and Subscriptions: Include all union dues or organizations that pertain to acting. Likewise, any acting magazines or trade newspapers that inform your acting can be deducted.
Promotional Expenses: You know how all those expenses you incur in order to promote yourself add up? Well, make sure to save your receipts for tax purposes. Updating your headshots, making an actor reel, any Internet acting service costs including your Internet connection costs, and business cards/postcards fall into this category.
Agent Fees: For those of you who have an agent, make sure to deduct any costs you incur that are associated with your agent. So don’t forget to include commissions withheld by agents.
Make-Up, Hair, & Wardrobe: The rule of thumb is if it pertains to your acting only, then you can deduct it. That means, if you are required to get your hair styled by a professional for a specific role, or to wear make-up that you would otherwise never wear, then count them as deductions. But don’t list the blue jeans you frequently wear on your personal time just because you wear them to an audition here and there. If it’s considered suitable for street wear, then don’t count is as a write off. But do list the dry-cleaning costs for the outfit you wear at your headshot photo shoot as well as that cat costume you purchased for a role.
Education: This would include acting coaches, classes, or maybe a choreographer you need for a role.
Meals and Entertainment: You can deduct 50% of any business meal or entertainment costs in which you had a serious discussion pertaining to your acting business before, during, or soon after the event.
Home Telephone Expenses: While you can’t deduct a single phone in your home, you can deduct any phone-service costs pertaining to your acting business like specific long-distance phone calls, or a message service that you use for your career. However, go ahead and deduct the entire expenses of a second land line or a cell phone that you use for business purposes.
Research Materials or Services: It’s part of an actor’s job to know what’s happening in the industry whether it be watching your colleague in a theater project, visiting a local movie theater to catch the latest box-office hit, or subscribing to services like Netflix. These are considered deductible as long as the expenses are reasonable.
Professional and Legal Services: Attorneys, accountants, or other professionals that you hire for your acting-business count as deductible costs.
Insurance: Because actors are considered self-employed workers, they can deduct all of their health insurance premiums for tax purposes. Actors with home offices and who have homeowner’s insurance can also deduct a percentage of their insurance fees.
Let’s face it, as an actor, you’re in it for the long run. So be sure to manage your finances in such a way that it will empower you to exceed and succeed in your chosen field. And don’t sweat taxes all too much–because they ain’t goin’ anywhere!
