3 Easy Tax Tips for Actors

3 Easy Peasy Tax Tips for Actors

8/23/2018

HERE'S WHAT HAPPENED

When tax season for 2016 hit, my hubby yelled to me from the home office, "Baby! What tax deductions do you have for acting? Where are all of your check stubs?"

"Uhhhhh, what?"

"I need to log all of that into the computer."

I had all of my check stubs and tax documents from my agency, but I didn't have a clue about my deductions. Also, I assumed (wrongly) that taxes had already been taken out of every paycheck.

Wouldn't it be great if the only expectation on us as actors was to simply act? Unfortunately, that's not the case.

Actors have administrative responsibilities in addition to working on their craft that need to be addressed, such as taxes.

"In this world nothing can be said to be certain, except death and taxes."
-Benjamin Franklin

If you want acting to be more than a hobby, you need to start taking these other job-related responsibilities seriously. Other actors are taking them seriously and greatly increasing their chances of success. You can be that actor starting today.

In this blog post, I'll give you a few easy tax tips to follow that helped me receive over $2,000 in acting related tax write-offs. All you really need to do is get organized, and it's a lot easier than you think.

Disclosure: Please note that I am not a tax professional. I am simply sharing my personal experience. I encourage you to also consult with a certified tax professional.

YOU MUST PAY THE IRS

Remember that Benny Frank quote at the top of this post?

Too many creatives think they can slip through the cracks by ignoring the business side of acting, including taxes. It's possible that you get away with it for a few years, but it won't last!

Please know that if you aren't giving the IRS their cut of the money every single year, they will find out at some point. If you don't pay the IRS, you may be facing jail time for tax evasion, and your acting career will consist of you entertaining inmates.

I could say that I'm not trying to scare you, but I am because this is serious. If you're not convinced, then Google "MC Hammer taxes." They know. They always know.

I have actors tell me ten times a day, "You're good at the business part of acting. I need to start getting better at that." But then they don't take action because no one told them their next steps.

via GIPHY

Just do tha thang!!!!! This is your future, your career, and your money. I want you to feel in control of it. Please don't buy into the lie that you can get rich and outsource everything without understanding it yourself.

1. SAVE NON-UNION OR 1099 TAXES

You'll notice that your SAG-AFTRA/W2 checks already have taxes deducted, but you need to double check all of your paychecks.

If you're working non-union or 1099 jobs, the checks you get from your agency most likely do not have taxes taken out of them yet. You 100% need to set aside money into a savings account so you have it to pay the government come tax season! Learn exactly how much to save in my free YouTube course Actor Boss Taxes.

YouTube

This is serious business. The IRS is not going to give you a break because you "didn't know." You may not even need to pay what's in your tax savings account if you have enough write-offs. It could be a wash, but you need the money saved just in case so you're not short come tax season.

If you don't need to use those savings, sweet! Use that extra moola for extra payments on your debt or put it into your emergency savings. If you're not sure which, then be sure to get my free download Actor Boss Budget. Just don't be these guys. C'mon everybody, to the tune of Singing in the Rain!

"I'm siiiinging in a cell. Oh siiiinging in a cell."

via GIPHY

2. TRACK YOUR MILEAGE

Are you tracking mileage when you drive for acting jobs? Yo, most of my tax write-offs came from mileage. It adds up fast! Again, check with a tax pro to be safe.

Here's the safest way to log mileage in my opinion:

Use Google Maps to log directions.
Put in your starting point based on where you left from. Do not include additional stops along the way.
Put in the end point (shoot location, acting class).
Log the mileage from the shortest route listed on Google so you're less likely to raise red flags with the IRS for logging extra mileage.

Once you put this information into a spreadsheet, it will take you less than five minutes to do each time you log mileage. You can get my full system for logging mileage in the download at the end of this post.

via GIPHY

3. KEEP YOUR RECEIPTS

Are you logging your receipts? Most actors are unsure which receipts to track, so they get overwhelmed and don't track anything. I say track everything.

You need a separate spreadsheet to log any receipts of acting-related expenses. Basically, receipts should include an acting expenses that aren't mileage.

While this doesn't technically count as a receipt, you should still log the square footage of your home self-taping studio if that's all you're using it for. I log the square footage of my studio, but I do not include the closet space because I use it for additional storage that isn't acting related.

I log absolutely everything, then let my tax pro decide what I can or can't deduct. If you're using a diy tax site, then you can still keep track of every expense, but wait until tax season to research and decide which deductions to keep.

Please be wary of doing your own taxes on a diy tax site. I once heard someone say that you would not perform your own surgery because you're not a trained surgeon, so then why would you try to navigate your own taxes if you don't know tax law? Makes sense.

Tax laws also change all of the time, and they did specifically for actors in 2017 (TCJA)! They may be different again at the time you're reading this post. Do you know what I don't have time to do? Learn tax laws. Neither do you.

YouTube

BONUS TIPS

ALL YOU REALLY NEED TO DO IS REPORT YOUR INCOME
The only thing you must do to survive tax season is to report your income:

I kept all of my pay stubs. File your checks in a folder if you deposit them via mobile deposit. Keep a copy of your paycheck plus the deposit slip if you deposit it at the bank.
I honestly reported all of my income. A diy tax site will give you the step-by-step guide, and a tax pro will do it all for you. However, what you enter into the site or hand over to your tax pro needs to be the full and honest breakdown of your income.
I checked my account balance. After you log all of your tax information, you'll see a number. That dollar amount is going to either show you how much you owe the government or how much the government owes you.

YOUR TAX RETURN IS NOT A BONUS CHECK
If the government owes you money, they are not handing out free money. It's neither additional income nor a bonus check. What the government is saying is that they took too much money out of your paychecks, so they owe you back your money. It's not additional income. It doesn't even count as income, and and to prove it, the IRS is not going to charge you taxes on whatever money they give back to you because it's money you've already made.

DEDUCTIONS ARE TYPICALLY THE BIGGEST CONFUSION
You now know that all you really need to do is submit all of your income and tax document info into a tax site or to a tax pro, then pay if you owe anything. Once you've done that, you're technically done. Yay!

However, you'll get asked whether or not you have any deductions. This is what causes the most confusion for actors--whether or not they can deduct an expense. Your best weapon is organization. Organize all of your acting related pay and expenses, and you'll feel way more confident!

TAKE ACTION

Just tracking your mileage could make a huge difference in your tax return, but how great would it be to feel confident that you have all of your tax info together should the IRS ever ask for it?

See below to learn more about Actor Boss Taxes: 5-Step System and Spreadsheets. My tax advisor loved these. Make sure you get confidently organized this year, too.

...