The
word tax
does not
seem to
be in
the
vocabulary
of
Entertainers.
Entertainers
tend to
be right
brained.
Right
brain is
said to
be more
intuitive,
random,
and
thoughtful.
Left
brain is
more
logical,
sequential,
analytical,
and
objective
of which
are the
traits
used for
administering
taxes.
The tax
administration
of
Entertainers
businesses,
are
often
last on
the list
of
interest.
The
rules
and
regulations
of
federal
and
state
taxation,
does not
interface
well
with the
creative
personality
of
performers.1
Many
Entertainers
are
vulnerable
when it
comes to
taxes
due to
avoiding
the
subject
all
together.
Entertainers
need to
develop
an
understanding
of the
mechanisms
of the
tax code
to
conquer
their
fears.
In so
doing
you will
pay less
in taxes
and you
will be
less
likely
to be a
victim
to
erroneous
tax
information.
Entertainers
face
challenges
when
trying
to
prepare
their
tax
returns.
Taxes
could be
withheld
in five
or six
different
states,
of which
you must
then
prepare
returns
for each
of those
states.
Complications
also
arise
when
working
overseas,
where
foreign
taxes
are
withheld.
Irregular
payments,
unusual
business-related
expenses,
and
supplemental
income
in the
form of
regular
jobs all
add up
to a
more
complicated
than
average
tax
return.
Many
Entertainers
find
themselves
acting
as an
employee
for some
jobs and
as an
independent
contractor
for
others.
You
should
always
be
certain
which it
is
because
the tax
treatment
of each
is very
different.
Entertainers
end up
with a
combination
of
income
types:
income
from
regular
wages
and
income
from
self-employment.
Many
working
performers
are
considered
self-employed
in
regard
to
filing
their
taxes.
Income
from
wages
involves
a
regular
paycheck
with all
appropriate
taxes,
social
security,
and
medicare
withheld.
Income
from
self-employment
may be
in the
form of
cash or
checks
with no
withholding.
The
business-related
expenses
are
deducted
differently
for each
type of
income,
and you
will
need to
complete
several
different
forms in
order to
do so.
For the
IRS, all
deductible
business
expenses
are
those
that are
incurred
in
connection
with
your
trade,
business,
or
profession,
must be
ordinary
and
necessary
and
lastly
must not
be
lavish
or
extravagant
under
the
circumstances.
Review
the
guidelines
below to
determine
the
correct
way to
deduct
your
expenses.
-
Regular
paycheck:
If
you
get
paid
regular
wages
with
all
taxes
withheld,
at
the
end
of
the
year,
your
employer
will
issue
you
a
form
W-2.
If
this
regular
paycheck
is
for
entertainment-related
work,
you
will
deduct
related
expenses
on a
Schedule
A,
under
Un-reimbursed
Employee
business
expenses,
or
on
Form
2106,
which
will
give
you
a
total
to
carry
to
the
schedule
A.
The
type
of
expenses
that
go
here
are:
1.
Apparel
consisting
of
uniforms
and
costumes
2.
Dry
cleaning
of
work
clothing
3.
Union
dues
4.
Education
i.e.
acting,
voice,
and
dance
lessons
5.
Photographs,
CD’s,
and
videos
for
self
promoted
marketing
-
Independent
contractor:
An
independent
contractor
is a
person
or
business
which
performs
services
for
another
person
or
entity
under
a
contract
between
them,
with
the
terms
such
as
responsibilities
and
pay.
The
difference
between
an
independent
contractor
and
an
employee
is
the
employee
works
regularly
for
the
employer.
The
contractor’s
relationship
has
become
imperative
since
a
contractor
pays
their
own
social
security
and
income
taxes.
Independent
contractors
get
paid
by
check
or
cash
with
no
tax
withholding.
This
means
that
you
are
responsible
for
all
of
the
Social
Security
and
Medicare
normally
paid
or
withheld
by
your
employer.
This
is
called
Self-Employment
Tax.
In
order
to
take
your
deductions,
you
will
need
to
complete
a
Schedule
C,
which
breaks
down
expenses
into
more
detail.
The
type
of
expenses
that
go
here
are:
6.
Transportation
expenses,
so
track
your
work-related
mileage,
and
keep
receipts
for
the
bus,
train,
subway,
and
plane
tickets
7.
Legal
and
professional
fees,
for
instance
commissions
to
agents,
attorney
fees,
and
tax
preparation
fees
8.
Advertising
for
self
promotion
and
marketing
materials
9.
Union
dues
go
here
if
the
membership
is
not
tied
to
any
one
job
10.
Special
insurance
required
for
work.
Do
NOT
include
health
insurance
here,
it
is
deducted
elsewhere
11.
Postage,
cell
phone
for
work,
fax,
copy
fees,
classes,
subscriptions,
and
anything
else
related
to
obtaining
a
job
12.
Supplies,
shoes,
costumes,
and
makeup
-
Combination
of
income
types:
You
are
better
off
subtracting
as
many
expenses
as
you
can
on
Schedule
C,
since
this
will
lower
your
Self
Employment
Tax.
If
an
expense
relates
to
both
type
of
income,
either
put
it
all
on C
or
break
it
down
and
put
a
percentage
on
the
C.
Many
Entertainers
take
advantage
of a
special
category
created
by the
Internal
Revenue
Service
called,
"Qualifying
Performing
Artist,"
which
has its
own set
of rules
and
regulations.
To
qualify
as a
Performing
Artist,
you have
provided
services
in the
performing
arts for
two or
more
employers,
receiving
at least
$200 or
more in
wages
from
each
employer,
your
work-related
expenses
are more
than 10%
of your
income
from
your
performing
artist
jobs,
and you
have
adjusted
gross
income
of
$16,000
or less
without
regard
to this
deduction.
Your
filing
status
cannot
be
married
filing
separately.
If you
are a
qualified
performing
artist
or other
professional,
and you
paid for
work-related
expenses
out of
your own
pocket,
then you
can
claim
those
expenses
as a tax
deduction.
Normally
work-related
expenses
are a
miscellaneous
itemized
tax
deduction,
subject
to the
2%
floor.
If you
qualify,
claiming
the
qualified
performing
artist
deduction
will
provide
a bigger
tax
break.
The tax
deduction
for
certain
job-related
expenses
is found
in
Internal
Revenue
Code
Section
62.
Qualified
Performing
Artist:
IRC
62(b).2
For more
information
please
refer to
your
professional
tax
preparer.
The
Federal
tax code
should
be
reviewed
with a
tax
professional.
Currently,
Stacey
L. Morin
works
for
Wilshire
Associates
Inc. in
their
Private
Equity
Division
as
Assistant
Controller
and
holds a
Masters
of
Business
Administration
in
Finance
from
California
State
University
Northridge
and
Bachelors
of
Business
Administration
in
Accounting
from
Eastern
Michigan
University.
Ms.
Morin is
a
Freelance
Business
Consultant
Writer
on the
side.
By
Stacey
L.
Morin,
MBA-Finance,
December
2007
1
Entertainers,
Artists,
and
Performers
are used
interchangeably
2
http://www.irs.gov/pub/irs-pdf/p529.pdf
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