It’s tax season and before you get too deep into what you might owe for the privilege of having worked in the business of acting in 2007, don’t forget to take a good look at what it cost you not just to generate the work you did but, what you spent – or rather invested in support of your career.
I call it “Fiscal Fitness” and chapter 9 in The Business of Acting discusses how to organize your business life to take advantage of all of the write-offs and deductions you’re legally entitled to take. It’s true that you have to have earned money as an actor during the reporting year (and actually report it as income) in order to write-off related expenses. But it’s also true that the expenses you incur in the pursuit, development, education, training and growth of your career can be worth some money back into your pocket if you do it right and if you follow the legal rules.
Because you are your own business, you’re entitled to file a IRS Schedule C with your 1040 tax return form. This is where you get to list all of the items you spent money on during the year. Most actors know that the cost of photo sessions and photo reproductions are deductible. But you would be surprised to know that there are a large number of actors who either don’t know or don’t remember to deduct the costs of other key expenses, like the cost of your memberships to Web site services such as ActorsAccess.com and LACasting.com and the costs of those holiday cards you sent to your industry contacts (including postage).
Another often-overlooked deduction is the cost of parking when you go to an audition. Cash-strapped actors (even actors with lots of available cash) rarely will park in the rip-off garages of office buildings where the privilege of parking for the duration of an audition could easily set you back the cost of a week's worth of Starbuck’s lattes. Street parking is (usually) where it’s at, when you can find it (which is why it’s always a good idea to plan to arrive at your audition location at least 30 minutes early so you’ll have plenty of time to hunt down a place to park without stressing that you’ll be late).
The government wants to see receipts, but what can you do if you’re dropping quarters and other loose change into parking meters that won’t issue you a receipt? Always keep a pad of small notepaper in your car with either a pen that works or with a pencil that actually has a point. When you can’t get a receipt for what it cost you to park, write down all of the pertinent information on a piece of paper: Day, date, time, location, how much money you put in the meter, the meter number and what the audition you went on was for. When you get home, put the piece of paper into the file box you created (every year!) just for this purpose in the folder you’ve labeled “Parking Expenses.” At the beginning of the next year, when you begin to add up what your career cost you, total up the “receipts” you’ve generated and accumulated and viola! Now you have a legitimate deduction.
Of course, parking expenses incurred during the course of conducting your business during the year aren’t just limited to when you go to an audition. Parking for a class, parking when you have a meeting with your agent or manager, parking when you go to see the new George Clooney film to study his process of character development … It’s all money spent in the development of your career.
Often, even the mileage you drive to and from these career-related activities can be written off against a percentage against your earned income.
Check out chapter 9 in the book for a handy worksheet listing all of the deductions you may be entitled to. The chapter also offers up a perspective on other fiscal fitness matters that might prove helpful to you. You should also talk with any CPA or certified tax preparer, although one who specializes in the business of acting with clients who are actors or other creative types will ensure you get someone who “gets” the uniqueness of the acceptable write-offs for you that people in other industries wouldn’t get.
True, I’m not a CPA, but I am a “businessperson.” Besides, I’ve learned a lot over the years from my own CPA and financial guru, Christopher Debbini. At least I can pass some of that on to you. We’re entitled to write-offs that standard employees are not. The worse thing that you could do is to not take advantage of what might be due you in return for filing your return.
Consider all of your options as you consider how to tackle tax season 2008. Happy calculating!
Your comments and questions are welcome. You can post here or e-mail me directly at blemack@TheBusinessOfActing.com.
BL
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