Last week we looked at an actor's legitimate tax deductions by going through his or her day and pointing out the allowable expenses usually incurred in the pursuit of work. We discussed the importance of keeping all your receipts and writing down each expense and the cost of any trip it entailed. We stopped at the point in the day just before an audition. But before we continue from there, let's point out a few more expenses in an actor's life that can be deducted.
Even if you have too much free time and spend it going to films or watching old television shows, some percentage of that is deductible—if you back it up with written documentation. It's virtually impossible to pursue a career as an actor without attending movies and plays and subscribing to cable or satellite TV. But auditors will demand written proof that you actually learned something from what you watched. So remember to take notes; write them down either on the play's program or in your daily diary.
Going to classes or rehearsals for a play or showcase often means going out with the rest of the class or cast and rehashing what you learned. This means that some of the cost of those meals and drinks can be deducted, because you're continuing your education with that group of fellow performers, and you wouldn't be in that situation in the first place if it weren't for the class or play in which you're participating. Be honest, though, and don't pretend that completely social situations—romantic dates or time spent with your friends, for example—are business meetings. Document (by keeping your receipts) and record your meetings with agents, casting people, directors, and so on. If you paid for the event, that's a deduction for you.
Now let's return to that audition. As mentioned in an earlier column, you can't write off the price of audition clothing if you can wear it normally on the street. You can, however, write off what you paid for costumes you may keep in your closet: the cop uniform, clown gear, doctor's or nurse's greens, or other specialized costumes.
And no, you can't write off normal haircuts and other beauty items. Sorry, but those expensive trips to the salon for hairstyling, dye jobs, and facials to stay young and attractive do not count as legitimate deductions. Don't get mad at me; I'm only the messenger. But be warned: Any preparer who lets you believe otherwise is setting you up for a big disappointment—and expense—if you get audited. What you can deduct is the cost of professional makeup you wear specifically for on-camera or stage auditions.
Most auditions require callbacks, sometimes multiple callbacks, before you get the job. Write down each trip in your day-to-day book; it cost you money to get there, including such things as parking fees and possibly child-care expenses.
Auditions also validate your other deductions by proving that you're actively pursuing your career for the sake of showing a profit, which is particularly important if you made little money last year. Even auditions for nonpaying showcases count, because, as we all know, the only purpose of doing a showcase is to get a paying gig.
Let's assume you aced the audition and got paid for the job, then paid an agent and/or manager a percentage of your gross income. You might think it unlikely that any actor would forget to include a write-off that could total up to 25 percent of his or her income, but trust me, it happens. Sometimes the obvious is overlooked.
Actors also need to remember to break their commissions down correctly. Did your manager also get a commission on that commercial work? Do you have different agents for different kinds of work? And what about different rates for different kinds of work? Was that print job a 20 percent commission or a 10 percent commission? Remember, when you get the 1099 at the end of the year, it won't tell you whether the amount listed is before or after the payment of commission. Better to be clear about it and write the info down at the time you get the check.
We'll finish our look at deductions in next week's column.