Weekly smARTips: Tax Time (Part 2): How To Keep More of Your Money

Bridge the gap between making art and making a living,

… one tip at a time

artists how to keep more of your money 2

Your smARTip for the week:
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Tax Time (Part 2): How To Keep More of Your Money
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We’re staring down the tax tunnel (just 20 days more and yours truly needs to heed her own advice!) and I wanted to give you three more 3 foundational pointers from Peter Jason Riley’s smARTist presentation: – Watch Your Wallet! Strategic Tax Planning for the Visual Artist:

  1. Even if you aren’t making sales, yet, keep a record of anything you do that’s leading toward sales (i.e., website expenses, postcard mailing, mileage to local art council meetings, etc.) because it’s the effort the IRS counts, not just sale dollars.
  2. Your marketing efforts, of any kind, will validate your efforts as a legit business in the eyes of the IRS –so again, keep those receipts!!
  3. Two surprising facts (for me) in Peter’s presentation concerned what counts as taxable income (he has even more in the full presentation): fellowship awards and endowments!

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Your smARTist Move of the week
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Even if you have an accountant or bookkeeper taking care of your taxes for you, don’t be lulled to sleep.

There are elements to the tax law that might slip by these professionals, unless they specialize in dealing with artists.

It’s always a good idea for you to be fundamentally knowledgeable so you can at least ask the right questions.

And, if you are a do-it-yourselfer, then all the more reason for you to get information tailored to your work

I invite you to comment, below, and tell us all: do you have any tax tips that you have come across?

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P.S. Do you know…

— how to handle charity donations for your artwork?

— how to determine the value of your inventory at the end of a fiscal  year?

— A simple way to calculate your “home/studio” office deduction (so simple even I can do it!)

All of this important information will help you keep your hands IRS clean, so you can concentrate on making art.

Click here to add Peter’s presentation to Your Art Career Library!

4 Responses to “Weekly smARTips: Tax Time (Part 2): How To Keep More of Your Money”

  1. Excellent tips!
    I read a couple of tax related books for small business and lots of IRS tip sheets to figure out what was allowed and what was not when I first started working for myself. And it astounds me when I talk to artists (and not just newbies!) and they don’t know what they can deduct or on what they have to pay income taxes.
    I think the single biggest mistake an artist makes is if they are paid cash for artwork – there appears to be many that think if it is cash, therefore doesn’t count… and don’t get me started on collecting sales tax :-)

  2. One of the things I have been confused about forever is “inventory.” An IRS rep. explained it. What is our inventory is our raw goods that we put into our work…frames, glass, paper for printmaking or art, canvas, I guess ink & paint etc! It is not the completed work, because we don’t know what it will really bring. My accountant has had me do an inventory every year, but I have had to fudge it, because I couldn’t figure out how to measure it! Now that I know, I will have to phase it in, because other wise it will throw up a red flag! I keep an accurate account of when I get gas & what mileage the car is at, but then I write down any miles that a trip that is qualified is and add those up at the end of the year….another artist I know was penalized because she had gaps in her mileage!

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