Author Topic: Tax Season!  (Read 9337 times)

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dallas10086

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Tax Season!
« on: Jan 15, 2011, 09:39 am »
Just out of curiosity....

How do you handle your taxes, whether you're full- or part-time freelancer or a resident?
How do you keep track of your deductible expenses?
Are you savvy enough to do them yourself, or do you hire someone?
What are some little known or surprising things you were *legally* able to deduct because of your job? (I'm sure counting the dog as a dependent is still a no-no.)

On_Headset

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Re: Tax Season!
« Reply #1 on: Jan 15, 2011, 04:29 pm »
To answer them in order:

1) I hire an accountant. I live in a major urban centre with a large theatre/dance community, and there are several firms who deal exclusively or primarily with arts expenses. (And all of these accountants are former dancers.)
2) I keep a pencil case in my messenger bag into which I stuff any receipt I plan on deducting. 2-3 times a week, I empty the pencil case and enter it all into a spreadsheet, then I put the receipts into monthly shoeboxes. When tax season comes around, I give the spreadsheet and the receipts to my accountant. It only takes 5-10 minutes a week in total, and it saves me a few hundred dollars.
3) I'm pretty good with paperwork and bureaucracy and accounting, but I've honestly found that hiring an accountant pays for itself. They find all sorts of deductions and credits and loopholes that I would never have found on my own, and so far, having used the same one for three years, these extra bonuses have more than paid for the cost of hiring the accountant in the first place.
4) I live in a jurisdiction where freelance and contract SMs can deduct almost anything which is even tangentially related to the arts, broadly stated, as a business expense. Subscribe to Stratford? Not only can you claim the subscription (it's industrial research, after all!), but you can often claim the transportation as well. Buy a book or rent a movie? More research! Go clothes-shopping? If it's stuff you'll wear to work, then it's equipment necessary to perform your job, so claim it. Have lunch with a friend? Well, if your friend so much as ASM'd a fringe show, that's now a business meeting--claim it! Your union dues and certification courses and professional memberships are almost all claimable...

Sometimes people overreach and get audited ("Now, I'd like to talk about your clothes budget." "Ah. Well, as a stage manager, I need to maintain a large assortment of all-black clothing in order to perform my job, and I consider it a professional expense." "You wear a $300 backless sequinned cocktail dress to your job as a stagehand?") but in general it's pretty much open season. The saving grace of this entire system is that so few SMs make enough money to pay income taxes in the first place that all of these credits and deductions rarely add up to very much.

Of course, a few years ago, the courts found that resident SMs (which includes SMs who are technically freelancers, but work primarily for one company) should be counted as employees rather than as contractors, which turned their world upside-down. (It is expected that employers will provide their employees with all necessary equipment and expenses, while freelancers are responsible for it themselves, so employees are allowed to make significantly fewer deductions.)

SMLois

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Re: Tax Season!
« Reply #2 on: Jan 16, 2011, 04:34 am »
I live in an odd world where I am both freelancer & employee, depending on the company. But luckily for me, my father is an accountant and has, thus far, done my taxes for me each year.

While I haven't gone forward with the spreadsheet system yet (it's something I talk about every year), I do keep all of my receipts in a collapsable folder, sorted by "type" of expense - office supplies, clothing, food, theatre tickets, etc.  I sort them every couple of weeks and make sure to write on the receipt why it is being kept. If I'm writing off a meal with someone, who was it and what did we talk about, etc.  I know too many people who have been audited to not make those efforts.

I've looked at the forms for doing it myself, but it's one more headache I don't want to deal with. When my father is no longer willing and/or able to do my taxes for me, I will hire an accountant.  They know what they are doing far better than I do.

nmno

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Re: Tax Season!
« Reply #3 on: Jan 16, 2011, 10:44 am »
I'm a freelancer and my grandmother does my taxes (she does them for my entire family) although the last couple years have been rather complicated and could probably have benefitted from a professional (worked in W2's from 4 different states & changed my residency in one year).  I give her a spreadsheet of my deductions (THIS will be the year that I stay on top of it and do it weekly!), she asks some questions of things I may have forgotten/overlooked.  I'm sure there are things we both miss but I figure it comes out in a wash.  Sometimes, I decide my *time* has a greater value, if that makes sense.

My surprising deduction: when working out of town, my ATM fees.

Equity/VITA has a list of deductions typical to people in the entertainment business (although it does skew heavily to the actor).  Really wish they would get VITA to do the seminars outside of NY.

LizzG

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Re: Tax Season!
« Reply #4 on: Jan 16, 2011, 01:44 pm »
A question along these lines - Does anyone have recommendations for a good (arts minded) accountant in NYC?

nmno

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Re: Tax Season!
« Reply #5 on: Jan 16, 2011, 05:48 pm »
A question along these lines - Does anyone have recommendations for a good (arts minded) accountant in NYC?

Trudy Durant.  She/her office does the taxes for many Broadway and touring theatre professionals (she sends staff out to major cities to get the touring folks where they are).  She's not cheap, but she does get lots of money back for people.

TarytheA

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Re: Tax Season!
« Reply #6 on: Jan 17, 2011, 08:42 pm »
A question along these lines - Does anyone have recommendations for a good (arts minded) accountant in NYC?

Good question.  I'd like to ask the same about Washington DC!
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maximillionx

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Re: Tax Season!
« Reply #7 on: Jan 18, 2011, 01:29 pm »
I usually do my own with the help of my dad.  He's no accountant, but he's savvy enough to do them himself and has been for a while.  I figure in a few years when I'm less of a dependent, I'll hire an accountant.  But for now, just doing them on my own will do.

Bwoodbury

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Re: Tax Season!
« Reply #8 on: Jan 18, 2011, 01:45 pm »
I track all of my even potentially deductible expenses and donations (including donations of time to smaller companies--I prefer to ask for a tax write off, rather than accept substandard wages) and send them to my parent's accountant. They've been working with him for so long that I get a good rate and he keeps an eye on me.

nmno

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Re: Tax Season!
« Reply #9 on: Jan 20, 2011, 11:30 pm »
Related to the topic...  VITA is having a free seminar on deductions at the NY Equity Office on Monday

http://www.actorsequity.org/NewsMedia/news2011/jan7.TaxDeductions.asp

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RuthNY

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Re: Tax Season!
« Reply #10 on: Jan 28, 2011, 11:41 am »
Marc Bernstein at Actors Taxes

http://www.actorstaxes.com/
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bex

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Re: Tax Season!
« Reply #11 on: Nov 04, 2011, 12:39 am »
Here's a question:

Have any of you US-based SM's ever deducted a gym membership or other exercise/fitness equipment?

Here's my reasoning: As an ASM, I need to be able to move scenery and furniture but frankly, I am a tiny un-athletic girl and I frequently have trouble doing that. I would like to remedy that situation, but gym memberships are expensive even for people who aren't living on an intern salary.

I'm actually going to have a real accountant do my taxes this year, but I want to make sure I'm keeping up with any potential deductions now.

So- gym memberships? Workout DVDs? Home exercise equipment? Anybody ever successfully deducted something in that vein?

Feel free to tack on any other deductions a newly (mostly) financially independent SM should be aware of, oh wise SMs of the internet!
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MatthewShiner

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Re: Tax Season!
« Reply #12 on: Nov 04, 2011, 08:37 am »
I think that's border line.

I tried tod deduct my video game systems and video games as it is entertainment, and I work in the entertainment field, and that playing video games sharpened my timing skills.

It was told that would be pushing it.  I didnt want any red flags . .  .so i didn't deduct it.

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Anything posted here as in my own personal opinion, and does not necessarily reflect the opinion of my employer - whomever they be at a given moment in time.

RuthNY

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Re: Tax Season!
« Reply #13 on: Nov 04, 2011, 08:57 am »
Like Matthew, my tax adviser has always warned against this.  I wouldn't go there...

Here's a question:

Have any of you US-based SM's ever deducted a gym membership or other exercise/fitness equipment?

Here's my reasoning: As an ASM, I need to be able to move scenery and furniture but frankly, I am a tiny un-athletic girl and I frequently have trouble doing that. I would like to remedy that situation, but gym memberships are expensive even for people who aren't living on an intern salary.

I'm actually going to have a real accountant do my taxes this year, but I want to make sure I'm keeping up with any potential deductions now.

So- gym memberships? Workout DVDs? Home exercise equipment? Anybody ever successfully deducted something in that vein?

Feel free to tack on any other deductions a newly (mostly) financially independent SM should be aware of, oh wise SMs of the internet!
"Be fair with others, but then keep after them until they're fair with you."
--Alan Alda

nmno

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Re: Tax Season!
« Reply #14 on: Nov 04, 2011, 11:07 pm »
Here's a question:

Have any of you US-based SM's ever deducted a gym membership or other exercise/fitness equipment?

....

Feel free to tack on any other deductions a newly (mostly) financially independent SM should be aware of, oh wise SMs of the internet!

Equity/VITA will tell you that Gym memberships aren't deductible as a business expense.

Some sites that might be helpful:
http://www.stretcher.com/stories/00/000410g.cfm
http://www.actorsequity.org/members/WordPDF/WhatYouMayDeduct2010.pdf
http://www.actorsequity.org/docs/production/aea_sm_packet.pdf
 - Packet as a page from VITA about deductible business expenses.

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