New Legislation Proposed to Save Actors Money While Filing Taxes

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Legislation that could give performing artists a special tax deduction has recently been introduced in response to the GOP’s 2018 Tax Cut and Jobs Act which, actor unions have protested, impacts professional artists unfairly. The proposition seeks to expand a deduction signed into law by former President Ronald Reagan—who, before heading to the Oval Office, was twice-elected as president of SAG prior to forming SAG-AFTRA, the nation’s union for screen talent.

The legislation titled the Performing Arts Parity Act was introduced earlier this month by Judy Chu, a Democrat from California, and Vern Buchanan, a Republican from Florida. If approved, their bill would update Reagan’s Qualified Performing Artist tax deduction, which permits artists to deduct work expenses from their annual taxes. The bill is co-sponsored by Rep. Elise Stefanik, a Republican from New York, and Rep. Chellie Pingree, a Democrat from Maine.

In 2018 when President Trump and the Republican-majority Congress pushed the new tax codes into law, they increased the standard deductible and minimized itemized deductions—pitching the reform as a win for the middle class. This modification, however, altered the way most professional artists have been filing taxes for years. Typically, actors have listed agent and manager fees, stage makeup—and even subscriptions to Backstage—as itemized work-related costs. Since the new tax code changed, actors have been paying more. The recent rise in tax fees for working actors is adding stress to a workforce which already struggles in an expensive economy.

Earlier this tax season, the secretary and treasurer of Actors’ Equity, Sandra Karas submitted testimony on the bill’s impacts to the House Ways and Means Committee (which, since the 2018 midterms, is now chaired by a Democrat). She also serves on the New York board of SAG-AFTRA, which has 160,000 members nationwide. Karas represented both unions in her testimony.

READ: The Actors’ Guide to Filing Taxes

“Unlike many other employee-classified workers, performing artists incur numerous regular expenses while they seek work,” stated Karas in her testimony. “Over the course of the year, these costs range from 20 to 30 percent of an actor’s gross income—sometimes even more.”

In her advocacy for union actors on screen and stage, Karas has been a vocal critic of the bill since its inception in 2017. In her submitted testimony, Karas—who is a tax attorney and runs the Volunteer Income Tax Assistance program for Equity—stated: “I process thousands of tax returns for actors, stage managers and performing artists in the entertainment industry…. Unfortunately, starting this year, these working Americans are now facing tax increases.”

Karas proposed an adjustment to the Qualified Performing Artist Tax Deduction which hadn’t been modified for inflation since 1986 when it was signed into law. Currently, the deduction limits the adjusted gross income to $16,000. The proposed legislation would lift the ceiling to $100,000 for single taxpayers and $200,000 for couples filing together. Karas’ lobbying must’ve struck a chord, because it’s precisely what Representatives Chu and Buchanan are proposing.

“Expenses like headshots, transportation, and more force professional artists to spend up to 30 percent of their gross incomes just to stay in business each year,” echoed Rep. Chu in a rare actor-competent policy statement by a federal politician. “For years, these expenses could be written off in their taxes, but that deduction was lost in the new tax law, requiring artists to spend thousands more. This is an untenable hit to working families that hurts our economy and communities. I am glad that Rep.

Buchanan and I could find a bipartisan solution to fix this problem and even the playing field for our country’s performing artists.”

READ: 5 Tax Tips Every Actor Should Know

“The overwhelming majority of performing artists are lower-income and middle-class Americans struggling to make ends meet,” added Rep. Buchanan. “Congresswoman Chu and I are fighting to update this 30-year-old law to deliver needed tax relief for performing artists in Southwest Florida and elsewhere.” Buchanan’s assertions are correct. In his office’s press release, he cites an article by the Sarasota Herald-Tribune reporting that performing artists in Buchanan’s district are often forced to hold second and third jobs—a practice well-known in the industry as side-hustling. Seventy-nine percent of Equity members earned less than $25,000 in 2016 and 2017 according to the union’s most recent theatrical season report. “The vast majority of members of Actors’ Equity and SAG-AFTRA are not celebrities,” Karas emphasized to Congress.

“Over the last few months, we’ve heard from countless actors and stage managers that their taxes have gone up significantly,” said Kate Shindle, President of Equity. “Tax fairness for performing artists ensures a healthy theater scene, which means a stronger local arts economy everywhere, and that means a growing economy that works for everyone.”

Gabrielle Carteris, President of SAG-AFTRA, agreed: “[Our] members work hard to entertain people around the globe while providing for their families. Any slight changes in their income could be detrimental and it is imperative that tax reform protects our community of performing artists as well as hardworking middle-class Americans.”

The bill represents a notable win for American actor unions—particularly Equity, which has been strategically building its influence on national politics with the recent installment of a special legal counsel and the Equity 2020 campaign.

If the House Ways and Means committee approves the legislation, it will go to the House of Representatives for a vote—moving it one step closer to being signed into law. 

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