Between Robert Muller’s congressional hearing and the president’s most recent slew of racist tweets, it’s been a rough couple of weeks for those keeping up with the U.S. political sphere. Luckily, there’s a small spot of good news for actors concerned about the upcoming tax season.
In an editorial published in The Hill, Representative Judy Chu, a Democrat from California, and Representative Vern Buchanan, a Republican from Florida, sounded the alarm around tax season for the actor demographic: performers are simply paying too much. The reason, the congress members claimed, goes back to the GOP’s 2018 tax overhaul, which unfairly targets the working lifestyles of performing artists. In early June, Rep. Chu and Rep. Buchanan introduced a bill to the House Ways and Means Committee to make taxes fairer for performing artists.
Since 1986 when former U.S. president, movie star, and head of SAG-AFTRA Ronald Reagan used his national pulpit to address the labor concerns of American performers, up until last year, actors were able to deduct itemized, work-related expenses. The bipartisan-supported Qualified Performing Artist tax law covered manager and agent fees, equipment like makeup, and even subscriptions to trade publications like Backstage. It was designed to even the playing field for workers in an industry that demands unconventional hours and singular but necessary expenses.
“Consider the actors and stage managers who work in live-professional theater across America,” Rep. Chu and Rep. Buchanan wrote. “Even while working, theater professionals constantly travel to auditions for new roles to sustain employment. And once they find work, they are on the hook for another set of expenses, with agents’ and managers’ fees topping the list. In any given year, working-class professional artists can spend between 20 and 30 percent of their gross income just to stay in the business.”
READ: The Actors’ Guide to Filing Taxes
In 2018, with a Republican-controlled government, Congress pushed a new tax code into law, and called it a boon for the middle class. By increasing a standardized deduction, Republicans claimed most Americans would have more money returned with less paperwork to file. However, to give higher standardized deductions, itemized deductions would be lowered. Actors’ Equity, the nation’s union for stage actors and stage managers, immediately spotted the potential burden on middle-class actors.
Equity’s secretary-treasurer, Sandra Karas—who is also a tax attorney—was the union’s chief critic of the law and has lobbied for changes since. During this year’s tax season, Karas submitted testimony to the House Ways and Means Committee arguing for the Qualified Performing Artist tax deduction to be expanded.
Currently, the deduction is only applicable to those making less than $16,000—a rate made obsolete by year-over-year inflation. Karas proposed raising the ceiling to $100,000 for single taxpayers and $200,000 for couples.
“Despite their disproportionate influence and contributions to local communities and economies, the struggle of Americans in the arts has been recognized for years,” the congress members wrote in The Hill. “This legislation also includes an automatic Consumer Price Index For All Urban Consumers (CPI-U) increase to ensure that the deduction remains relevant as the cost of living increases.”
READ: 5 Tips to Make Tax Season Easier for Actors
If it passes through committee stages, the bill will be introduced to the floor for a full vote from Congress.
“There’s no question that the entertainment industry is one of our most vital economic engines, creating and retaining jobs, not just in Los Angeles and New York, but also in small and medium-sized cities across the country,” said Rep. Chu and Rep. Buchanan.
“Protecting performing artists and their families from undue financial burden is a bipartisan cause,” they continued. “We will fight for its swift passage to get it to the president’s desk for signing.”
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