Tax Deductions for Actors
Personal finance is a complicated subject when it comes to actors and other self-employed professionals. A number of tax deductions are available to actors. Whether you are acting full time or part time, you can take a number of tax deductions to reduce the taxes owed at the end of the tax year. What are the tax deductions for actors you can take advantage of?
Travel Tax Deduction
You can deduct the mileage and wear and tear on your vehicle driving to auditions (including for parts you didn’t get) as a business expense. You are most likely going to be able to get the full deduction for this if you have a log detailing the trips you made. You are less likely to get the deduction approved in an audit if you simply state that you spent X amount on gas and tolls and half your time on the road is for work.
Have you travelled for your acting job? You can deduct the cost of lodging if you stayed overnight as a result of an audition or job interview as a job hunting expense. Meals while travelling for work are also deductible up to a per diem amount; you can deduct the cost of a reasonable meal but not a sit down meal for two at a fancy restaurant or alcohol. If you were there for a specific performance and weren’t reimbursed by the employer, you can deduct it as a business expense.
Dress It Up and Deduct It
You can take a tax deduction for business expenses such as makeup, costumes and props, as long as you aren’t using them for personal reasons. For example, you can write off costume makeup for a play but cannot write off the makeup you bought to show off at Halloween. You can write off wigs for a performance but not facial cream to generally enhance your appearance.
Goodwill and Good Tax Write-offs
Did you donate used items to a local high school drama club? Did you give boxes of clothes that no longer fit to Goodwill Industries? You can write that off as a charitable gift.
You cannot deduct the value of time you volunteered for charity. However, you can write off the use of your car and mileage for charitable purposes.
Advertising is a legitimate business expense that is a deductible business expense. Whether you had business cards printed or had a website created to promote your one man show, you can deduct the costs incurred to promote your career. One caveat is if you gave free gifts to your customers. In that case, you can only deduct $25 per customer.
Tax Deductions Too Many Actors Overlook
Do you have children? Do you pay for at least half of their living expenses? You can apply for the child care tax credit, even if you auditioned and didn’t get acting work. This is similar to the child care tax credit available to those who are unemployed paying for childcare while interviewing. The exception to this rule is that you cannot apply for the childcare tax credit if the childcare was paid for out of a dependent care reimbursement account or DCRA.
The Cost of Being a Pro
Are you self-employed? You can deduct half of your Social Security and Medicare taxes if you pay the whole tax bill each quarter.
Membership dues to professional organizations are tax deductible. For example, engineers can deduct their membership dues to engineering associations. Actors can deduct their union dues and similar professional organization memberships.
Job hunting expenses are tax deductible as long as they aren’t towards your first job. If you paid an employment agency fees to help find you a job, or a subscription to breakdown service like those offered by Casting Calls America (SacCasting.com, CastingCallsDenver.com, etc.), whether acting work or a side job to help pay the bills, you can deduct it off your taxes. Ditto for that agent’s fees.
Have you sought legal advice related to your acting career? Did you pay an attorney to collect from a client who was late to pay? Have you paid a CPA to do your taxes? All of these fees are legitimate business expenses and thus tax deductible. Do you need financial software like Quicken or Quickbooks to track your expenses and generate invoices? The IRS considers software for business purposes a tax-deductible business expense, as well.
For more information, be sure to consult an Enrolled Agent or Certified Public Accountant.
Have tips for fellow actors? Leave a video comment with your best deduction tip below (Note: Neither this article nor the comments below are not to be considered professional advice).