Things Artists Should Know Before Filing Their Taxes

Like any other freelancer, an artist who has the intent to make a profit from their products or services is considered to be a business.  This means they are eligible to report earnings and losses and to deduct expenses.

1. Behave Like a Business

When artists report their income on Schedule C, they are agreeing with the IRS that they operate like a business, meaning they run the business to make profits.  However, people who make art without a profit are considered hobbyists and cannot deduct their expenses.

Keeping track of expenses can benefit artists.  These expenses can include things like studio rent or home studio space; art supplies, internet and phone bills, and more.  So, you can also include museum trips, research expenses, and travel expenses.  As an artist, you can even deduct travel expenses from visiting art fairs!

2. Use a Separate Bank Account for Your Art Activity

The IRS expects you to operate like a business, so you should refrain from mixing your personal and professional expenses under a single bank account or credit card.  This will also help you to calculate your taxes much more easily.  PS: Purchases you make on your business credit cards are a deductible business expense.

3. Find an Accountant Who is a Good Communicator

Finding a good accountant who helps with company income taxes for artists that won't leave you in the dark.  An accountant or tax advisor ensures that you don’t miss out on any deductions and also adhere to the tax code.

Agro Accounting is a trusted name in doing accounting for artists, freelancers, and small businesses.  You can contact us for tax preparation, accounting and business consulting, sales tax, bookkeeping, estimated tax calculations, tax relief options, and more.