How to Save Money on Taxes Next Year

Article Image
Photo Source: Pexels

It’s tax season, everyone’s favorite time of year that also causes existential evaluation of every financial choice you’ve ever made. Whether you’re feeling a monetary sting or feeling flush, every actor could stand a few money-saving tricks; allow our Backstage Experts to provide.

Make a budget and stick to it

“It’s a brutal lesson I learned while being a professional actor: Sometimes times are good and jobs are plentiful, and other times they aren’t. Non-theater life is like this too, but people often don’t have to face this reality the way actors do.

“I still know a good many actors who live paycheck to paycheck, and when money feels tight many think a budget isn’t necessary. After all, you already know where it all goes, right? Rent-groceries-classes. But budgeting is absolutely necessary, because it’s one of the few ways you can ensure money gets set aside for savings.” —Lauren Bowling, financial blogger and Backstage Expert

Save money to plan for financial uncertainty

“Since we don’t know what your income will be, percentages are our best friends.

  1. 15 to 25 percent for savings. This is for the future, not to be used this year except for emergencies.
  2. 15 to 30 percent for taxes (talk to your accountant—this is totally based on how you get paid). This stays in a separate account so you’re prepared for your quarterly or year-end tax bill. And, in some cases, will even create your own personal tax return!
  3. 5 to 15 percent for investing back in your business. Putting this aside from Day 1 prepares you for all the amazing business opportunities or expenses that pop up, like new headshots, updating a website, acting classes, or going to L.A. for pilot season.
  4. Now take your income and subtract what you got for 2a, 2b, and 2c.

Bailie Slevin, financial consultant and Backstage Expert

Be realistic about how you’ll make money

“Make up a reasonable budget for your living expenses and then look at your average income for the last two years. If the money you’ve made does not allow you to pay for the basics, how are you going to live? Actors don’t always like having ‘job-jobs,’ but the practical truth is you need to make money to support your acting. Some actors try to write scripts, but fewer scripts get made than there are actors to be in them. You may, however, catch lightning in a bottle on the Internet. Come up with a Web series idea, get together with some friends, and film it. The costs are low and, if you get enough views you might spark some interest from an outside source.” —Joan Sittenfield, talent manager, author, and Backstage Expert

Commit to building financial literacy

“When I came out to pursue my career, I felt like I was mentally prepared to work hard and to hustle, but I wasn’t prepared financially. I didn’t understand money and how to deal with the lack of stability in the career I had chosen. In the early years of my career, I got myself into a lot of financial trouble, and I’m really honest about that with my students. There was a point where I was almost $80,000 in credit card debt. And I used to cry a lot. I used to go to auditions not thinking about the role or thinking about the work, but thinking about what bills I would pay if I got the gig. It was just a really unempowered way to be pursuing my career. I had to fix it or I had to quit, it was one of those two choices. That led me on a journey of commitment to my own financial education. As I started to make progress, I began thinking, Gosh! Why wasn’t this taught in college or at the conservatory? And that’s what led me to start my company; that was 15 years ago.” —Miata Edoga, founder of Abundance Bound, dedicated to financial wellness for actors

Remember that the entertainment industry is capricious

Survival jobs are a fact of life, but there are all kinds. Overspending can force you into the kind of survival job that interferes with auditioning or taking an acting job. Remember your true goals! Keep a positive attitude about your talent and how it will one day afford you everything you want, but don't screw yourself in the meantime! Toys, gadgets, and expensive living situations for an actor are affordable not only according to your current financial state but to your future financial state as well. How secure are you about tomorrow? I've seen actors get a dream job and the first thing they do is go out and buy a crazy-expensive house. Not everyone is equipped to handle a first-time windfall of cash.” —Marci Phillips, executive director of ABC casting and Backstage Expert

Know how much money you need

“While you can always scale back from your priority point, what happens when your income falls short of your make or break number? While savings can cover occasional income shortfalls, a consistent pattern of earnings that fall short of your make-or-break number leaves you with two options: slash your essential expenses or find ways to earn more money. Better yet, do both. Your make-or-break number is a benchmark for the financial viability of your life. If you're not meeting it each month, the freedom to be creative and work in pursuit of your passion gets eaten away by your essential need for survival.” —Stefanie O’Connell, finance columnist, author, and Backstage Expert

Stop procrastinating when it comes to your money

“I’d say this is highly prevalent in the arts—but also everywhere else—is procrastination. ‘It’s ok that I have credit card debt now because as soon as I book my Broadway show I’m going to pay it off’ or, ‘It’s ok that my rent seems a little bit high now because I’m up for that commercial and that’s going to cover the entire year.’ That justification of overspending now because it’s eventually going to come gets people into trouble because when it does eventually come, they go, ‘Yay I just made $100,000. But I've spent $120,000.’” —Bailie Slevin

Ready to book a job? Check out Backstage’s casting calls!