Organizing Tax Returns? Top Tips for Artists!

Tax time isn’t fun for most people, but it’s especially hard on artists who have a diverse range of income from freelance jobs, gigs, commissions and part time jobs. Sandra Karas, leader of our tax and financial planning workshop, was kind enough to give us some quick tips.

Alex Teplitzky: Preparing taxes is especially difficult for artists. Can you give us 3 quick tips artists need to know before preparing their returns?

Sandra Karas: Organize! Organize! Organize! Those are the best 3 tips for any artistic professional, especially those who are self-employed or are independent contractors. If you don’t organize your records, who will? And if you don’t, you’ll lose valuable deductions on your individual and business tax returns.
Keep careful records of your expenditures and the receipts that prove that you spent the money. Conduct yourself as a consummate business professional, so that your website, promotional efforts, business bank account and other indications of your standing in the community are unimpeachable.

Alex: You probably know about the relatively recent tax court ruling regarding artist taxes. Can you tell us some important take aways from the ruling, and how you see this helping artists?

Sandra: The Crile case was noteworthy because it recognized that artistic professionals can toil for years without making a profit, provided they can also prove that they have credibility in their respective fields, maintain regular contacts with those in their industry circles, keep clean business records, and conduct themselves as business professionals who are embedded in their artistic communities. Susan Crile won her case because she was a recognized artist who had garnered excellent reviews from noted publications and reviewers for her work individually and for her body of work as a whole. She also had adequate support for the other tests of business professionals.

All business professionals, especially those in the arts, should avail themselves of any opportunity to become better educated about matters relating to their financial affairs, including the most advantageous filing of their tax returns. Smart, savvy artists simply do better than those who leave their fates for others to decide. Taking control of your income and expenditures can be empowering and can make an artist more successful – or at the very least, someone who can retain more of her/his money at tax time.