Starving: Making a living off of your art is hard. It’s called being a “Starving Artist” for good reason. Because of the meager pay most full time artists receive, they are not usually in debt to the IRS. But did you know you can turn the tables and have the IRS pay you? Get the facts. Learn how you can use the IRS rules to your advantage.
Art Business: Business and Art clash. But if you want to save money, get organized and look at the facts. If you classify your art as a business, you can deduct the cost of your art supplies and business expenses.
Create a Business log: The IRS is going to try to counter you at every turn. But it will be hard for them to refute the fact that your art is indeed your business when you have a detailed Business log. Keep track of everything. When you make business purchases, keep the receipts and record the date of the transaction. Then record the amount and how it relates to your Art.
Filing Your Return: Here’s where to report artist income/deductions
1040 or 1040-EZ
For reporting your income
Schedule C “Business Profit or Loss”
All the miscellaneous income you receive should be reported on this form.
The Catch: The IRS will try to classify your Art as a “hobby” instead of as a business. And they can actually do this if you don’t watch out, so pay attention. If you lose money in your art business for 2 years in a row, the IRS will consider your business a hobby instead. And then you’ll have to pay back the money they paid you in deductions! You’ll be a starving artist in debt to the IRS, and you know that can’t go well. Hopefully that will give you some incentive to succeed in the art world.
Now You Have The Smoking Gun…Use it!