Download Your Free Performing Artists & Directors Expense Checklist Below
The easiest way to lower your taxes is to not miss any deductions on your tax return. For this reason, it’s well worth the effort to adopt a system by which you can conveniently track expenses, and maintain receipts for business expenditures. A good system won’t only keep you focused on tracking those valuable business deductions, but it will also provide a necessary paper trail in the event of the dreaded IRS audit.
Whether you are operating as a W-2 wage earning employee, or an independent contractor who receives a 1099-misc wages form, the IRS allows the deduction for many unreimbursed expenses, which can lower the amount of taxes you’ll have to pay, or can increase the amount of refunds you’ll receive.
According to the IRS Publication 583:
“You can deduct business expenses on your income tax return. These are the current operating costs of running your business. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business, trade, or profession. A necessary expense is one that is helpful and appropriate to your business, trade, or profession. An expense does not have to be indispensable to be considered necessary”.
I would strongly suggest mapping out a tax plan with your tax professional.
To help you record your business expenditures, you can download the Performing Artists & Directors Expense Checklist. Use this sheet to track your professional expenses and deductions.
It would be a good idea to map out a similar strategy to track your non-entertainment related deductible expenses as well, such as mortgage interest, rents, capital losses, pension payments, dividends, interest, charitable contributions, and other deductions.