Tax Season Starts When?

You have just filed your taxes and you breathe that sigh of relief.  It’s over for another year.  Or is it?  The answer is NO, or at least it should be, because tax season is just about to begin.  That’s right.  The organization it takes to make the most of your taxes begins now.

As artists it is essential to understand that regardless of your current income, if you actually intend to make money from your craft, there are ways in which you must treat it like a business.  There are two critical concepts you must become familiar with to be fully prepared to do your tax return.  Without them, you are not running a business – you are engaged in a hobby – and should never expect that hobby to be financially profitable.  The first is you MUST be organized.  Organization means being sure you have all the documentation you need and that you have a place for everything and have everything in its place.  You might find that a computer-based program, such as Quicken or Quickbooks, is the answer to keeping all your records in order. If you are more comfortable with paper then be sure to get a paper organizer that is efficient and easy to use.  Actors have an enormous resource in a company called Holdon Log.  They provide both computer programs and carefully designed log books that allow actors to record everything from auditions and callbacks to expenses related to creating and maintaining your professional image.  Find tools that work for you and USE THEM throughout the year to keep the records you need to efficiently and effectively file your taxes.

The second important concept is to keep your business finances separate from your personal finances.  Have one bank account for each business you have and use this account to pay all your business expenses.  This is a professional way to conduct your business affairs and it is a good way to keep your records in order.  Again, remember that your acting, photography, writing, or any other creative career is a business and should be run out of a separate bank account.  If you do not have funds in your business account then loan your business some money and keep careful track.  The business can pay you back when times are better and in the end you will know that your business paid its own way.