01-Apr-2009
As we approach the deadline for filing taxes (April 15, 2009), I want to remind you of a little known tax break for people employed in the performing arts. Even some tax preparers aren't aware of it. But, if you qualify, you can save yourself some tax dollars.
First, you must be a "Qualified Performing Artist." You are a QPA if you meet ALL of the following criteria:
1.You performed service in the performing arts for at least two employers during the past year. (The New Lincoln Theatre engaged you to play Vera Charles in "Mame" in April, 2008. The Petomaine Light Opera hired you to play Miss Hannigan in "Annie" in June, 2008.)
2. At least two of those employers paid you $200.00 or more. (The New Lincoln paid you $6000.00, while the Petomaine Light Opera paid you $5000.00.)
3. You had allowable business expenses which you can attribute to the performing arts of more than 10% of your gross income from the performing arts. (Your allowable business expenses totaled $2500.00, while 10% of your gross income from the performing arts was $1,100.00.)
4. You had adjusted gross income of less than $16,000.00 (before you deduct your allowable business expenses). In my example, your AGI as an actor was $11,000.00.
If you meet these qualifications, you can deduct any business expenses related to your performing arts career, even if you don't itemize. Many artists don't itemize, so they may be forfeiting deductions and paying too much tax. (These deductions may also help lower your state and city income taxes.)
This provision is NOT just limited to actors -- it applies equally to musicians, choreographers, directors, etc.
What business expenses qualify? Ordinary and necessary expenses connected to the performing arts.
Here are some examples:
Agent's commissions; union dues; photographer's fees (headshots); printing(resumes, business cards, scripts);business gifts; standard or actual mileage (if you use your car); business use of your home; depreciation on property you use for your performing arts career (a violinist can depreciate his violin, a playwright-his computer, a clown for children's birthday parties-his costume); travel and meal expenses (with certain limitations and adequate record keeping). You can even deduct tips given to porters, baggage carriers, bellhops, hotel maids, stewards or stewardesses on cruise ships; cab drivers; hotel servants in foreign countries.
To help with your record keeping, get a separate credit card for your performing arts career only. This way you can even put your tips on the credit card, so you can deduct them. And you'll have both the credit card receipts and statements to back up your deductions.
If you're married, you must file a joint return with your spouse, unless you've lived apart for the entire year. If you do file a joint return, you must figure the first 3 requirements separately for each of you. And you must total the combined AGI for both of you.
Make sure your tax preparer is getting these deductions for you. You're entitled to them.
