The Tax Factor was created to educate individuals and small-business owners about taxes. Let’s face it, nothing in life is guaranteed except death and taxes. Okay, maybe that sounded pretty depressing but the goal of this blog is to help you find the information to learn how to make taxes work for you. Taxes can be extremely complicated but knowing about deductions and credits can save you thousands of dollars per year.
Jan 24, 2013
Tax Organizer for Entertainers
KEY EXPENSES FOR ENTERTAINERS
Educational expenses are deductible under either of two
conditions: (1) Your employer requires the education in order for you to keep
your job or rate of pay; or (2) The education maintains or improves your skills
in the entertainment profession. The costs of courses that are taken to meet
the minimum requirements of a job, or that quality you for a new trade or
business are NOT deductible.
B & CPROMOTIONAL EXPENSES & SUPPLIES:
Generally, to be deductible, items must be ordinary and
necessary to your profession as an entertainer. Record separately from other
supplies, items costing over $100 and having a useful life of more than one
year. These items must be recovered differently on your tax return than other
recurring, everyday business expenses.
If you incur expenses while looking for a job in your
entertainment field, they may be deductible. You do not actually have to obtain
a new job in order to deduct the expenses. Out-of-town job seeking expenses are
deductible only if the main purpose of the trip is job search, not pursuing
Your auto expense is based on the number of qualified
business miles you drive. Expense for travel between business locations are
deductible; include them as business miles. Your trips between home and a
permanent work location or between one or more regular places of work are
COMMUTING and are NOT deductible.
Document business miles in a record book by the following:
(1) Give the date and business purpose of each trip; (2) Note the place to
which you traveled; (3) Record the number of business miles; (4) Record your
car’s odometer reading at both the beginning and the end of the year. Keep
receipts for all car operating expenses (i.e. gas, oil, repairs, insurance,
etc.) and of reimbursement, if any, you received for your expenses.
ETRAVEL – OUT-OF-TOWN:
Unreimbursed expenses of traveling away from “home”
overnight on job related trips are deductible. Your “home” is generally considered
to be the entire city or general area where your principal place of employment
is located. Out-of-town expenses include transportation, meals, lodging, tips
and miscellaneous items like laundry, valet etc.
Document away-from-home expenses by noting the date,
destination, and business purpose of your trip. Record business miles if you
drove to the out-of-town location. In addition, keep a detailed record of your
expenses – lodging, public transportation, meals, etc. Always list meals and
lodging separately in your records. Receipts must be retained for each lodging
expense. However, if any other business expense is less than $25, a receipt is
not necessary if you record all the information in a diary. You must keep track
of the full amount of meal and entertainment expenses even though only a
portion of the amount may be deductible.
The basic local telephone service costs of the first
telephone line provided in your home are not deductible. However, toll calls
from that line are deductible if the calls are business-related. The costs
(basic fee and toll calls) of a second line in your home are also deductible,
if the line is used exclusively for business.
Equipment purchases such as musical instruments or telephone
answering machines are shown differently on your tax return than are general
job-related supplies. Keep documentation for these items separate from everyday
expenses so that they may be easily identified when your return is prepared.