It’s that time of year where every theater professional starts googling “what deductions can actors take?” or “how to pay less taxes as an artist”…welcome to tax season!
Instead of Googling for hours about every single deduction you could take or texting questions to your friend who has a friend whose parent is an accountant, I’m going to give you a super simple rundown on how to make the most out of tax time (without the overwhelm or confusion).
You don’t need to focus on claiming every single deduction possible, you just need to focus on the big ones that will have the most impact (i.e., money back in your bank account).
First off, a big perk of owning your own business is the tax benefits you get access to (and yes, if you are an actor, you are running your own business, so take advantage of it)! In the eyes of the IRS, you are what’s called a “Sole Proprietor,” which means you run an unincorporated business by yourself.
One of these tax benefits reserved specifically for business owners is that you can personally take the standard deduction AND itemize deductions in your business — those who have 9-5 jobs or don’t own a business can only choose one or the other.
“But what the heck does that even mean?”
Don’t worry, I’ve got you.
First things first — let’s understand what a deduction is and how it affects your taxes.
What is a Tax Deduction?
This is an amount you can subtract from your overall income to lower the amount you owe in taxes (things like business expenses, charitable donations, insurance, etc.)
For example, if you made $50,000 of income in 2022 as an actor, and you claim $10,000 worth of deductions, that means you will only owe taxes on $40,000 worth of income rather than the full $50,000. If you are being taxed at 12%, this means you would be paying $4,800 in taxes instead of $6,000 by taking advantage of deductions.
The Standard Deduction is a specific dollar amount anyone can take to lower their taxable income (for 2023, that amount is $13,850).
Itemized Deductions are expenses + costs specifically related to your work that you can subtract from your taxable income item by item.
As a business owner, you get to utilize BOTH.
I’m now going to walk you through the biggest itemized deductions you can utilize this year to lower your tax bill:
Top 4 tax deductions for actors
Whether it’s a post-pandemic refresh, a quick haircut update, or a total rebrand, headshots are a routine and necessary expense for actors. Headshot sessions can cost anywhere between $300-$1,500, and actors will usually get them done every 1-2 years.
2. Classes and Coaching
Any type of continued education in your field or coaching to help improve your business is considered a necessary and deductible expense. Acting classes and audition coaching are obvious ones, but you can also deduct an online course that teaches you how to market yourself on social media, or a money coach that helps you separate your business and personal finances, or a class that increases your proficiency in one of those special skills on your resume.
3. Professional Fees
Any kind of fee associated with the business side of being an actor can be deducted. This included your agent and manager fees, the cost of hiring a CPA (certified personal accountant), SAG or AEA union dues and yearly subscriptions like Casting Networks or your website.
4. Self Tape Equipment
Depending on how advanced your self tape setup is, these equipment costs can add up! If you’re investing in a new collapsible backdrop, two box lights, A tripod and a wireless lavalier mic, that could amount to anywhere between $300-$800.
There are lots more small deductions you can take (50% of business meals, a portion of your phone bill, MTA rides to and from auditions, etc.), but this kind of bookkeeping can get tedious and overwhelming, and usually only has a small impact on the taxes you owe. Focusing on the big 4 will save you time while having maximum impact on money back in your bank account.
Final notes to navigate tax season with ease
1. Keep your receipts
Deductions only count if you can prove that they actually happened! Keep a folder on your desktop for PDFs and pictures of all your receipts, and keep it updated throughout the year. This will make filing your taxes much quicker when it comes time, because everything is already compiled for you.
2. Hire a CPA who works with small businesses or artists
This is a MUST. The tax code is confusing and constantly changing, so it behooves you to have a professional on your side. If you happen to get audited, your life will also be a lot easier (and less costly) with a CPA to help you navigate it. Also, don’t have your parent’s friend who is an accountant do your taxes for free — hire someone who understands your industry and has a stake in your return (because you’re paying them!).
Here’s to a tax season with less stress and more money in your bank accounts — happy deducting!
Looking to start your own business? Sign up or login to Casting Networks and kick off your acting career today!
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Brooke Tyler Benson, Money Coach + AEA Actor, is the founder of Not Starving Artists. She is bringing financial education and empowerment to creatives to create a new generation of wealthy artists living lives of luxury and purpose (no budgeting or bi-weekly paycheck required). After graduating with a BFA in Acting, it became her mission to destroy the “starving artist” trope once and for all. She is your financial cheerleader, bringing you accessible money education and coaching specifically for creative freelancers and small business owners.