If only Pablo Picasso could see the value of his work in today’s dollars; he would be amazed. In a private 2013 sale, one of Picasso’s most famous and sensual paintings “La Rêve (The Dream)” sold for $155 million.
Like Picasso during his lifetime, you may be trying to find a fan following, or at the very least make a decent living and save some money. Equipped with relevant tax knowledge and tools you can do just that.
Whether you are in your “blue” period or your “rose” one, tax savings are a possibility for artists of any genre. If you are self-employed, you may deduct all expenses that are related to art activity that are ordinary and necessary to complete your work. Here are some tax saving tips that all artists can use this tax season:
If you have scheduled travel to leave your town, state or country to work on art or show your art, these costs are tax deductible. Some examples of such expenses are transportation costs, airfare, and lodging. You are even eligible to deduct the cost of meals up to 50 percent.
Local travel is also tax-deductible. If you need to drive to get supplies, teach or take an art class or visit an exhibit or gallery, you can deduct public transportation and car trips.
Back Taxes Could Hurt Your Business
If you owe money to the IRS, it is in your best interest to takes steps to resolve your tax debt immediately. Back taxes come with steep fines and strict penalties, so if you are an artist who has back taxes, seek the help of a professional. The tax resolution lawyers at U.S. Tax Shield are qualified to help you.
The cost of computer paper, desks and printer ink can add up fast. Supplies are anything you buy and use in your business during a fiscal year and they are all tax deductible.
As a professional artist, your main business objective is to make money from your artwork. Thus, your physical paintings are considered inventory. You are only able to deduct art creation costs like canvas and paint for the artwork you sell throughout the year and they are called “cost of goods.” You may only receive tax deductions on supplies for art that are sold.
Do you have a home art studio that you use exclusively for business? If so, you may be eligible to deduct home office expenses because of it. If you rent your place, you may even be able to deduct a portion of your rent each month. If your business and home locations are separate, you can deduct the rent and utilities paid on your business location.
Agents can be helpful in promoting your art, but they also come with a price tag. Luckily for artists, all agent fees are tax deductible.
Everything you spend to market you and your art is tax deductible. This even extends to advertising, art listings, videos and websites.
Education and Subscriptions
If you have purchased art lessons or receive business related subscriptions like magazines, you may write these expenses off in your taxes.
Dues and Fees
Artists who are members of professional art organizations, or pay fees to enter other art shows, may deduct these expenses from their taxes come April 1.