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The Top 10 Acting Deductions to Take
Finally, the most important rule is: For every expense that you believe pertains to your career, keep the detailed original receipt, as well as any documentation specifying how the payment was made.
1) Classes and Workshops
For most actors, classes are a large expense. If you pay in cash, always get a receipt. If you have one-on-one coaching sessions or write out checks to an individual, make sure you gather information to validate the coach's or teacher's experience.
This isn't just headshots and résumés anymore. It includes what you spend on demo reels, editing, online casting registries, submission websites, personal websites, and theater company dues.
Online casting is becoming more and more expensive as these businesses become a more important part of the process for actors. It's usually $100 or more per year for each website.
Great headshots aren't cheap, but all too often actors pay in cash and forget to ask for a receipt. Most performers investigate several photographers before they make their choice, so keep a list of your meetings as you do your investigation. Additionally, it's very rare that one trip to the photographer is all you need. You may have the initial meeting, then the session, and then pick up proofs. That's important mileage if you own a car. If you take public transportation, your list helps prove what percentage of your bus and subway expenses was for business.
For 2010, the IRS is allowing 50 cents per mile for business usage. If you drive 4,000 miles for business (auditions, classes, trips to buy supplies, photo sessions, and so on), that would be a $2,000 deduction by itself. If you are wise enough to keep a record of your business travel, it could easily be more than that in a major city. We had a client working in Florida who acquired more than 13,000 miles one year traveling up and down the state.
If you own a newer car, you should try to keep track of all the costs of operating the vehicle, as they may very well add up to more than the standard mileage allotment. All you need to do is write down the date and purpose of the trip and the address of where you went. You can always get the specific distance online at a later time.
Even if you use a monthly card for public transportation, the business percentage of its usage can be significant and, if proven, be deducted.
4) Agent and Manager Commissions
When working regularly, this is a major deduction, but you will be asked to prove the amounts and how the commissions were paid. It's surprising how often actors have no idea how much they pay out in this area.
5) Office Supplies
This is an area people have a tendency to forget about. Paper and toner cartridges aren't cheap, and those receipts also validate your mileage in getting to the store and back home.
6) Viewing Expenses
This is a large expense throughout the year for most performers, but the Internal Revenue Service considers this area entertainment and will always try to deny these costs. The IRS will demand that you be able to prove the educational value of the expense, so you should document in writing what you learned when you watched TV or attended the movies or the theater. It sounds silly to us, but it's a lost expense if you don't keep some records.
7) Out-of-Town Travel
For travel, you must keep records of your expenses. You must keep receipts to prove hotel and transportation costs. For out-of-town meals (generally overnight stays), there are per diem amounts allowed by the IRS that vary from city to city (they can be found at www.gsa.gov). These rates are usually greater than your actual meal charges. As you are allowed to choose between the per diem rate and your actual costs, consider checking out these rates prior to traveling to see if it's worth keeping your meal receipts during your trip. Be certain that the purpose of the trip or meeting was entirely, or at least primarily, business. Don't try to think you will fool an experienced auditor by sneaking personal trips into this category.
8) Business Meals
These can add up quickly, but don't try to write off every visit to a restaurant or meeting in the industry. You will be asked to prove the business purpose of the meeting, who was present, the date, and how much was spent. Don't count on using your credit card statement as a record. Keep the original restaurant receipt and write this information on the back of it immediately. The IRS loves this kind of contemporaneous record-keeping.
9) Cell Phone, Internet Fees, Website Hosting
First make sure you can prove all of the actual expenses, and then be able to justify the percentages of those costs that were specifically for business usage rather than personal usage. That means you should keep your actual bills and not just proof of your payments.
10) Union Dues, Props, Scripts, and Other Miscellaneous Expenses
As you go through your day, you spend money a little at a time. It all adds up, though. Five dollars each day is more than $1,500 in a year. Don't get greedy and fool yourself that you can estimate or guess what you spent during the year; the IRS will catch up with you. Get into the habit of keeping every business-related receipt and storing them in some kind of safe, consistent location. That documentation will allow you to remember your expenses at the end of the year and prove them in an audit.
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