Filing taxes is a very daunting responsibility for a lot of people, including actors. At first, actors can try to not think about it and just do their routines every day. However, as the tax deadline gets closer, most of them also feel nervous about it, as there’s a lot to think about when it comes to taxes. But as an actor, there’s no need for you to feel intimidated or scared about it.
For actors, filing taxes may not be on top of their lists, and it is something unique, but there are also expenses that actors can claim that most people cannot. If you’re an actor in New York and wonder about how you can accomplish filing taxes smoothly and without any hassle, we’re here to help you. Today, we are giving you the best tips when it comes to filing actor taxes. These tips will ensure that as an actor, you’re ready to deal with your personal taxes.
Find a professional tax preparer that can help you.
Actors are one of the busiest people, and their schedules are always full. Therefore, finding time to prepare for tax filing can be challenging. If this is your case, then it is better to consider working with a professional tax preparer than trying to do everything on your own. This option may come with additional costs, but it will be more convenient.
However, when looking for a professional tax preparer, you need to be selective. It’s great if you can find a tax professional that specializes or an expert in your field, which is the entertainment industry. It’s because you can find many big, multi-office tax companies that do excellent work for people working in offices, but are not aware of the unique aspects of taxation when it comes to a working actor’s return.
You can ask your fellow actors, producer, director, or manager for recommendations. You can also search online by using phrases like “tax prep for actors.” Once you have a few names on your list, you can check their websites and other sources to know about their experience and professional recognition. If you see “EA” after a preparer’s name, it means that he or she is an enrolled agent and part of a list compiled by the Internal Revenue Service that denotes he or she passed an exhausting three-day exam, and their background has been assessed carefully.
It is also essential to look for the CPA designation. However, you need to do your research because a lot of CPAs work in internal corporate capacities and only do a bit of tax prep work.
Be sure about your professional standing.
To be able to file your taxes smoothly, you also need to ensure your professional standing. You are considered as a professional actor if you worked as an actor and have been compensated monetarily, even if you are still awaiting receipt of compensation. There is no minimum payment required to be considered a professional actor.
However, if working as an actor did not result in being paid in the form of money, but instead for exposure, contacts, and experience, then this means that you do not qualify as a professional actor.
Make sure to keep all your records and receipts.
Keeping all your records and receipts is one of the most important things you need to do. Make sure that you have copies of every single receipt you think can be counted toward a deduction. The IRS or state tax authority may ask for proof of your deductions. Therefore, you need a copy to send their way.
Some of the possible deductions for actors can include agent fees, business travel, promotional expenses, and union dues, among other things. You also need to ensure that you’re keeping track of your income. Using an income ledger may come in handy for this. It is a simple list of anyone who paid you money the whole year.
If your income meets the filing requirements, then you need to file a tax return. Even if you feel like you did not make a lot of money, if the income earned meets the filing requirements, then the IRS and state taxing agencies will require their share.
Be aware of the documents you need to have to file a tax return.
To file a tax return, you need to know all the documents that you need to present or submit. You will also need your Social Security number or tax ID number, dependent information of there’s any, and the forms that reflect your sources of income, such as W-2, 1099, 1040, etc., and deductions.
Look back on your previous year’s taxes.
If you made any estimated tax payments on your own, or any additional payments when you filed your return the previous year, then you need to make a list of the dates paid, the amounts, and the method of payment, because the amount could be deductible. You may also want to consider making any large planned purchases in December if you think you’ll owe taxes. For example, if you are thinking of purchasing a new computer soon, then doing it in December can help reduce the taxes owed.
Keep in mind that filing a tax return is not a choice that is up to the individual. The IRS has strict rules that need to be followed to determine whether a tax return needs to be filed. And if you meet the requirements to file a tax return, then you are required to do so, regardless of whether you think you made a lot of money or not.
These are some of the best tips we can give for New York actors when it comes to filing taxes. Doing your taxes as an actor can be complicated, but we hope this information will provide you with a great start.