The Artist’s Guide to Tax Deductions

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Tax season is upon us.

But before you start heading for the border to avoid combing through all of your receipts, take a look at some of the tax deductions you can claim as an independent artist. 

Depending on where you are in your visual career, you may be asking if your practice counts as a business (as recognized by the IRS) and not a hobby.   

If you are running your art practice like a business, even if you are operating at a loss, you can deduct that loss from other income you earn, such as wages and salaries from second jobs.

How do you know if you qualify?

If you conduct your art practice in a businesslike manner, put time and effort into your artwork to make it profitable, depend on income from your artwork for your livelihood, have been successful in making a profit during some years of your art business, you most likely qualify to take deductions. 

As a general rule of thumb, your business should be making a profit for at least three out of five years or you should be able to demonstrate that you are working actively toward making your business profitable.

Doing things like keeping accurate records of your show entries, gallery activity, business expenses and time you put into your artwork all work in your favor when trying to prove your credibility as a business. 

Once you have determined you qualify, don't miss out any of these common deductions. 

Materials & Supplies

Any hard materials you use to make your artwork can be deducted from your taxes. This includes your supplies, raw materials, electricity that might be used to create your work, and frames. These materials are generally things you use up within the year (think paint, clay, glaze, canvases, etc.)

You can also write off any office supplies you have purchased to run your art business such as paper, cards, postage etc.

Studio Expenses

If you have a studio outside of your home, the total rent and utilities are fully deductible business expenses. For those that have an art studio in your home that is used exclusively for your art business or making art, you can deduct a portion of your monthly overall expenses for that space. 

Advertising

Anything you spend money on promoting your work can be deducted. Advertising expenses include print ads, business cards, fliers, sponsorships, Facebook and digital ads, as well as your website hosting and creation costs. 

Vehicle Expenses

You can claim a portion of your auto expenses if you use your vehicle for your art business. Especially if you use your car or truck to transport your work to shows or fairs or to pick up materials, you can claim your vehicle in mileage or a percentage of your personal vehicle use. 

Fees

You can write off your processing fees from companies like Square, Etsy or Paypal as well as fees you paid to enter juried shows or fairs. 

Memberships

There are a lot of bonuses to having professional memberships. Plus, you can write them off as well as any museum memberships. 

Contract Fees

What counts as a contractor? Anyone you pay in order to make your work. This includes fabricators, photographers, assistants, etc. 

Large Equipment (Depreciable Assets)

Depreciable assets are anything that you will use for your art business or studio for more than one year. Think computers, kilns, cameras and any larger expenses that are used over multiple years. 

These are substantial expenses. For these larger items, you can report the asset’s depreciation as a deductible expense or you can claim a larger deduction in the first year.

Legal and Professional Expenses

Our recommendation? Get a professional to help you with your tax preparation—you can write off their fee!  

Repairs and Maintenance

Any expenses related to repairing or maintaining your equipment or office space would go into this category. For example, if you’re a photographer and you send your camera to the shop to get calibrated and cleaned, the maintenance cost should go in this category.

Travel

As an artist, you are probably traveling to shows frequently. Not only can you deduct the miles traveled, you can deduct transportation like Uber rides, airfare, and hotel costs.

Business Meals

In order to deduct the cost of a restaurant meal, you need to conduct or discuss business during that meeting or soon thereafter (say, you meet up with an artist to discuss an upcoming collaboration together). Keep in mind that you also can only deduct 50% of your meal costs.  

Cell Phone Costs

If you use your cell phone for both business and personal use you can split up the monthly charges based on an estimate of how much you use the phone for your art business.

Education and Conference Expenses

Have an art coach? Take a continuing education class? Attend any conferences this year? You can deduct all of these expenses as well as any books, magazine subscriptions, online courses or anything else related to furthering your education. 

Software Subscriptions

Software that helps you run your art business like Artwork Archive can be deducted from your taxes. If you pay for other subscriptions that have monthly or annual fees like an accounting service or image service, you can deduct those as well. 

Remember, the most important thing is that you are making sure you are reporting all of your income and not over-reporting your expenses. This helps if you have kept close tabs on your expenses throughout the year and stay organized. 

Use this as a jumping off point for your taxes, but always seek the advice and guidance from a tax professional. 

This post was reproduced with permission from Artwork Archive.