Tax Basics

Tax Write-Offs for Artists

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Courtesy of the Houston Chronicle. The career of a professional artist can be a battle to succeed. Making a living is tough and utilizing IRS tax deductions at the end of the year can allow an artist to keep more of what she makes. Tax write-offs are similar to those used by other self-employed workers across the country; they include costs such as office space and equipment deductions...read more. - Art Supplies and Materials- Art Studio Space- Education Expenses- Travel and Promotion .
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VIDEO: IRS, Small Business / Self-Employed, VIRTUAL Small Business Tax Workshop

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Video Workshop courtesy of IRS.gov.  Includes 9 tax lessons for Small Business or Self-Employed.
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VIDEO: Bookkeeping & Taxes for Artists

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Steven Goldglit, Managing Partner of Goldglit & Company, speaks to students at the New York Academy of Artabout taxes, bookkeeping and good habits on accounting for artists.Taxes & Bookkeeping for Artists - Steven Goldglit from New York Academy of Art on Vimeo.
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Taxation of the Visual and Performing Artist: An Insight into Federal Income Tax

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By Michele Stanton, Courtesy of TALA.As artists are typically not accountants, TALA has prepared this step-by-step guide to assist artists in completing their own income tax returns. This guide also includes answers to frequently asked questions and examples of completed returns. A special thanks to CPA and TALA Volunteer, Michele Stanton. (Published 2012)
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Expense and Income Worksheets for Actors, Directors, & Performers

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Courtesy of ArtsTaxInfo.com Expense checklist for actors PDF Version Expense checklist for actors Excel Worksheet Version  Income worksheet for actors PDF Version Income worksheet for actors Excel Worksheet Version  12 month expense worksheet for actors Excel Worksheet Version Read the full article at  www.artstaxinfo.com/actors.shtml
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Understanding Taxes | Expense and Income Worksheets for Visual Artists

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Courtesy Peter Jason Riley, CPA of Riley Associates P.C -----  Artists and taxes don’t seem to mix very well. Taxes and administrating the business of art are often last on the list of concerns for the visual artist. The artistic temperament simply does not interface well with the exacting rule-filled world of federal and state taxation. Artists tend to avoid the whole matter and consequently leave themselves vulnerable to bad advice. The secret to overcoming this phobia is to develop an understanding of the mechanisms of the tax code and some simple, effective ways of complying with this onerous task. I often use the analogy that you may not need to know how to fix your car but it is helpful to know how it basically works. In so doing you will pay less in taxes and you will be less likely to fall prey to erroneous tax information and disreputable or ill-informed advisors. . . EXPENSES Expense checklist for visual artists PDF Version Expense checklist for visual artists Excel Worksheet Version 12 month expense worksheet for visual artists Excel Worksheet Version  INCOME Income worksheet for visual artists PDF Version Income worksheet for visual artists Excel Worksheet Version . . . Continue reading at www.artstaxinfo.com/artists.shtml (Image credit: Mark Wagner)
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IRS: Business Use of Home

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Courtesy of IRS.gov-----Topic 509 - Business Use of HomeWhether you are self-employed or are an employee, you may be able to deduct certain expenses for the part of your home you use for business.To deduct expenses for business use of the home, you must use part of your home as one of the following:Exclusively and regularly as your principal place of business for your trade or business;Exclusively and regularly as a place where you meet and deal with your patients, clients, or customers in the normal course of your trade or business;A separate structure used exclusively and regularly in connection with your trade or business that is not attached to your home;On a regular basis for storage of inventory or product samples used in your trade or business of selling products at retail or wholesale;For rental use; orAs a daycare facility.If the exclusive use requirement applies, you cannot deduct business expenses for any part of your home that you use both for personal and business purposes. For example, if you are an attorney and use the den of your home to write legal briefs and for personal purposes, you may not deduct any business use of your home expenses. Further, under the principal place of business test, you must determine that your home is the principal place of your trade or business after considering where you perform your most important business activities and where you spend most of your business activity time, in order to deduct expenses for the business use of your home. A portion of your home may qualify as your principal place of business if you use it for the administrative or management activities of your trade or business and have no other fixed location where you conduct substantial administrative or management activities for that trade or business. An employee may only deduct business use of the home expenses when he or she uses the business part of the home exclusively and regularly and for the employer's convenience.You also may take deductions for business storage purposes when the dwelling unit is the sole fixed location of the business or for regular use of a residence for the provision of daycare services; exclusive use is not required in these cases. For more information, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers).Deductible expenses for business use of your home include the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance, and repairs. In general, you may not deduct expenses for lawn care or for painting a room not used for business.Regular Method - Historically, taxpayers have computed the business use of home deduction by allocating the total expenses of the home to the percentage of the home floor space used for business. However, a qualified daycare provider who does not use his or her home exclusively for business purposes must figure the percentage based on the amount of time the applicable portion of the home is used for business. Self-employed taxpayers filing Form 1040, Schedule C (PDF), Profit or Loss From Business (Sole Proprietorship) first compute this deduction on Form 8829 (PDF), Expenses for Business Use of Your Home.Simplified Option - While taxpayers can still figure the deduction using the regular method, many taxpayers may find the optional safe harbor method less burdensome. Beginning in 2013, Revenue Procedure 2013-13 allows qualifying taxpayers to use a prescribed rate of $5 per square foot of the portion of the home used for business (up to a maximum of 300 square feet) to compute the business use of home deduction. Under this safe harbor method, depreciation is treated as zero and the taxpayer claims the deduction directly on Form 1040, Schedule C. Instead of using Form 8829, the taxpayer indicates the taxpayer’s election to use the safe harbor option by making two entries directly on the Schedule C for the square footage of the home and the square footage of the office. Deductions attributable to the home that are otherwise allowable without regard to business use (such as qualified residence interest, property taxes, and casualty losses) are allowed in full on Form 1040, Schedule A (PDF), Itemized Deductions. For more information, see Home Office Deduction and Simplified Option for Home Office Deduction.Regardless of the method used to compute the deduction, you may not deduct business expenses in excess of the gross income limitation. Under the regular method for computing the deduction, you may be able to carry forward some of these business expenses to the next year, subject to the gross income limitation for that year. There is no carryover provision under the safe harbor method, but you may elect into and out of the safe harbor method in any given year.In the Farming Business or an Employee - If you are in the farming business or are an employee, use the worksheet in Publication 587 to figure your deduction. As an employee, you must itemize your deductions on Form 1040, Schedule A (PDF) to claim expenses for the business use of your home. Farmers claim their expenses on Form 1040, Schedule F (PDF), Profit or Loss From Farming.Additional InformationPublication 587 has detailed information on rules for the business use of your home, including how to determine whether your home office qualifies as your principal place of business.. . . View the original document on IRS.gov
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Tax Tips for Artists

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Excerpt from "Taxation of the Visual Artist" by Michele M. Stanton, CPA, Texas and Accountants for the Arts (TALA).Primary records are the actual receipts, invoices, and bills the artist receives in the course of art related business or personal life. Canceled checks, bank statements, and deposit slips are also included.• Pay all business expenses by check or credit card and have a separate credit card for your business expenses. When an expense is paid by check, the dates paid and check number should be written on the invoice or bill. Do not make a check out to “Cash” to pay a business expense.• For minor expenses, such as parking, which are usually paid with cash, the information can be recorded in a journal, diary, calendar, or PDA.• There are two basic methods of accounting: cash and accrual. The cash method requires that all forms of income be included in gross income in the year in which you receive it. A cash basis taxpayer generally deducts expenses in the year in which they are paid. However, expenditures for items with a useful life of more than one year must be capitalized and deducted (depreciated) over time.  Download "Tax Tips for Artists" pdf below.   
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Tax Information for Nonprofits

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Assembled by Carter McNamara, MBA, PhD.  Courtesy of Free Management Library. Sections of This Topic Include: Do I Need Help to Get Started? Importance of Good Record Keeping Getting Tax-Exempt Status Federal, State, Sales, Payroll Taxes, etc. Preparing and Filing Form 990s (including about public disclosure) Donations and Taxes Unrelated Business Income Taxes (UBIT) Lobbying and Taxes Assessing Your Tax Management Practices Special Topic -- When Hiring, Need Independent Contractor or Employee?
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IRS: Free Tax Help Hotlines

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The IRS offers free assistance by computer, fax, telephone and in person. The IRS can help taxpayers get forms and publications and answer a wide range of tax questions. The IRS can also help find free tax preparation services for those who qualify . . . view more
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