Being an artist is a unique way to make a living. No two days are going to be the same and if you are choosing this kind of lifestyle for your needs to make money, this is a passion of yours. Being an artist is great, but you do need to make sure that you are paying your taxes right at the end of the year. The way that you pay your taxes, as well as the amount, is often going to depend on the type of work you do. If you work for a company who sends you a paycheck every few weeks, you would just file your taxes like you would for any other job. But if you find your own clients and don’t work for a particular business, you will be considered self-employed and have to file your taxes in this manner.
Learning how to file your taxes as a self-employed individual can be a learning experience for a lot of people. It is different, especially when you get the sticker shock of finding how much you owe in taxes, social security, and Medicaid taxes. If you are working as an artist and feel you qualify as a self-employed individual, make sure that you hire a tax professional in your area who can go over some of the changes you will experience while still finding you all of the deductions that work for your needs.
Self-Employed Taxes
Self-employed taxes are a bit different than you will find with other working situations. While those employed with a boss are able to get some of their taxes taken right out of their paychecks each months, self-employed individuals don’t have this luxury. There is the option of paying estimated taxes, but for your first year, most self-employed individuals won’t do this because they have no idea how much they will make nor do they understand what the estimated taxes are all about.
Without the help of estimated taxes, you are going to see a bit of sticker shock at the end of the year. You will notice that your taxes are higher than usual when paying in. This is because you haven’t paid anything in and you are also responsible for your own social security as well as Medicaid taxes and these can all add up pretty quickly. Luckily there are some deductions that can help out so look for these with your tax advisor. Your tax advisor can also go through and help you learn how to pay estimated taxes to help lower that tax bill in the future.
Finding Deductions
Even as an artist, you are going to be able to find a lot of deductions that you can qualify for. But many of these deductions aren’t ones that you may think of on your own. Using a tax professional with the right experience will make all of the difference because they will know about these deductions and work hard to ensure that you get each and every one that you deserve this tax season.
First, they will look and see what kind of expenses you are dealing with from the past year. If you spent a lot of money on supplies to do the work, such as paints, designs, easels and so on, you could get a deduction on some of these. You will need to keep some good records through the year in order to have proof of these purchases, but if you have some simple receipts, you are usually going to be fine.
In addition, if you worked out of a home office, you will be able to deduct a few of these expenses, such as the mortgage payment and utilities. Health insurance can be expensive, but self-employed individuals, such as artists, are allowed to deduct some of these expenses when they file their tax return. In addition, if you have children and need to send them to daycare so you can perform some of the work, you can get deductions for this expense as well. Your tax professional will be able to work with you to determine if there are other deductions for your situation to save you even more money than before.
Working With a Professional
If this is your first year working as an artist or a self-employed individual, you may find that it is really useful to hire a professional to help you out with all of the issues that could come up. Self-employment is wonderful, but if you don’t know all of the deductions that pertain to your situation and you are at a loss for how to file your taxes, you may find that your tax bill is higher than it needs to be. Your tax professional will be able to take a look at your income and deductions and find you the best results at the end of the year. Don’t try to do this on your own, hire a professional who is able to help you out every step of the way.
Hiring a tax professional can make all the difference when you are working as an artist. They will be able to save you a lot of money while giving you reassurance that your taxes are going to be done right the first time. Contact our offices to discuss your tax return and to find the right tax professional to help you get amazing results right away.
Larry Gurewitz