Tax season. Cue a collective groan.

Are you set up to file your taxes or have you put it off to the very last minute?

With the dreaded filing deadline inching closer each 24-hour interval, it'south important to remember that nil helps more than than keeping all of your financial records organized throughout the yr. This includes knowing where all of your sources of income are generated and where your money is going—and so tin go a improve understanding of your net income.

Taxes are complicated and especially complicated for artists. You have a lot of different income sources and a lot of unlike expenses. Yous might be wondering what you can write off—what counts and what doesn't?

Don't worry, nosotros are here for yous.

Whether you are looking to save with common tax deductions for artists, want to know if you qualify for deductions, or simply desire fiscal insights you can use to strategize for success, take a look at the main categories of expenses that yous can track in Artwork Annal for your art business organisation.

Do yous qualify every bit an art business for deductions?

When it comes to deciding if you need to file taxes equally an artist, the IRS draws the line betwixt whether you define your do every bit a "hobby," or a "business organisation."

Quite simply, your art practice is defined equally a business if you lot take the intention to sell your work regularly for profit and a hobby is done without fiscal incentive. If you lot run your studio for profit, you tin deduct business expenses. Notwithstanding, if your fine art practice is a hobby, you practise not authorize to deduct your art expenses from a different income stream on your taxes. and if your practice is not for turn a profit, you lot cannot qualify your losses to kickoff another income.

How else can you determine if you lot qualify to deduct your expenses?

Ask yourself these questions as posed by the IRS:

Do y'all put time and effort into your art-making exercise with the intention of selling the works?

Do you rely on this income to consume and pay rent?

If you lose coin doing this activity, was it inside or beyond your control?

Take you lot fabricated profits in the past?

Have yous changed your practice in order to better profitability?

Do yous wait to meet profits in the future?

It'southward ok if you lot don't make a turn a profit every yr, only as a general guideline from the IRS, they want to come across a turn a profit three out of 5 years.

Know your business nomenclature

Do a little research and decide what type of business structure you want to become. Many artists cull to classify their business as a sole proprietorship because information technology'due south piece of cake to prepare and meets the needs of a basic studio do.

The process varies from state to state, and then head over to your local Clerk of Courts website, your state's Section of Acquirement site, and the IRS site to come across what steps are required next.

TIP: Start a divide business organization checking account with your banking company. That way, your business and personal expenses aren't all mixed in together when it comes time to exercise taxes. And, don't forget to save your business concern receipts!

If you are a sole proprietorship yous volition record all your sales as full general income and you will deduct your expenses.

Artwork Annal'due southExpense tracking characteristic makes accounting & tax time piece of cake for your art concern.

Take a expect at the list of common expenses that you tin can deduct as an artist.

Advert

Anything you lot spend money on promoting your work can be deducted. Ad expenses include print ads, concern cards, fliers, sponsorships, Facebook and digital ads, equally well as your website hosting and creation costs.

Concern Insurance

But what it sounds like. If you pay for business insurance, go along track of your payments and write them off come tax time.

Committee & Fees

Paying a gallery to bring in clients and giving them a pct of sales? Expense that. Also track any fees related to call-for-entry, applications, legal advice, outsourced bookkeeping, business consulting as well every bit model or contractor fees. What counts as a contractor? Anyone you pay in order to make your work. This includes fabricators, photographers, administration, etc.

Payment processing fees are likewise included in this department. If yous accept payment online through a platform like Paypal, Square, Stripe or Intuit you can expense the processing fees.

Legal & Professional Services

Our recommendation? Get a professional to assist you with your tax preparation—you can write off their fee!

Materials & Supplies

Brushes, clay, canvases, easels, glaze, tools… anything yous use to make your artwork should exist recorded as an expense.

Large Equipment counts equally a depreciable asset and is annihilation that you will utilise for your art business concern or studio for more than one year. Recollect computers, kilns, cameras and whatsoever larger expenses that are used over multiple years. You can write this off all in one or over many years.

These are substantial expenses. For these larger items, you lot can report the asset'southward depreciation as a deductible expense or yous tin claim a larger deduction in the beginning year.

Meals & Entertainment

If you take java with a client, take a collaborator out for lunch, or take a dinner with a business partner—these costs can all be deducted at 50% as long as the purpose of the meal or effect is to talk concern. Go on your receipts, snap a picture, upload them into Artwork Archive, and make note of the purpose of the meal.

Office Supplies

Paper, pens, staplers, paper clips, folders, fine art for the walls, a mouse for your figurer—you lot get the point. Just don't forget online services such as spider web hosting, software subscriptions like Artwork Annal, an accounting service, or epitome services, and anything else necessary to keep your online presence and career running.

Cell telephone and internet costs can as well be recorded. If you lot use your prison cell phone and net for both business and personal use, you can separate up the monthly charges based on an estimate of how much you lot utilise for your art business.

With revenue enhancement season correct around the corner, Artwork Archive makes information technology easy to manage your business expenses.

Professional Development

Professional person memberships or any type of dues you pay to an art organization, online courses, conferences, books, workshops, or residency fees—anything that tin can be used to enhance your career can all be expensed!

Rent & Charter

Pretty straightforward! If y'all lease office space, studio infinite or fifty-fifty a storage space outside of your home, that monthly fee tin be expensed along with any utilities you have to pay along with it.

For those that have an fine art studio in your dwelling that is used exclusively for your art business organization or making art, you can deduct a portion of your monthly overall expenses for that infinite that volition exist calculated at the time of filing your taxes.

Repairs & Maintenance

Have an expense related to repairing or maintaining your equipment or office space? Proceed track of the repair costs and fees. For example, if y'all're a photographer and you transport your camera to the shop to get calibrated and cleaned, the maintenance cost should be recorded.

Taxes & Licenses

Business licenses are ofttimes required past the land. You tin can expense that!

Travel Costs

Going out of town to install a show? Traveling to a conference? Paying for airfare or hotel costs? Using a ride-sharing app to get to a gallery? Track and expense that.

Yous tin can also expense $0.58 per mile anytime you lot use your vehicle to bulldoze to a meeting, choice up supplies, go to an art fair, etc.

NOTE: Every bit always, we encourage you to consult with a tax professional person for help with your taxes and this should but act as a guide to go you started tracking the expenses for your art business.

At present that you know what to keep track of, the question is how?

These expenses add together upwards quickly! Just with the Expense Tracking feature in an art management tool similar Artwork Archive, you lot can keep track of them with ease.

Bought new pigment or business cards? Enter that every bit an expense in Artwork Annal.

Paid an invoice for a portrait model? That expense can be tied directly to a Contact.

Want a quick overview of your production, sales, and expenses over time? Just hit up the Insights feature!

Plus, with the click of a button, you tin get an expense report for whatsoever category of your business organization or for whatever time frame. And once expenses are recorded in Artwork Archive, you can easily export them to Quickbooks or any other bookkeeping software.

It'southward of import to know where your art business stands at any indicate financially, and then you are never caught off guard—taxation flavour or not.

Generate sales and expense reports in the click of a button in Artwork Archive.

Hands calculate your expenses and sales income in Artwork Archive to get your internet income.

You recorded your sales in Artwork Archive. You kept your receipts and uploaded them into the Expenses feature.

If you waited to the end of the year this time, good luck—we've been there. Information technology'southward less painful to regularly upload your expenses and tape your sales, then you lot aren't stuck with a week of admin tasks. The best time we notice is usually once at the cease of the month, only you tin find the all-time time that works for your schedule.

Program for the future

Ignorance is bliss … except when it comes to your finances. Brand sure you are setting bated a portion of your income to pay for your taxes and to invest in IRA if you have enough left over.

Y'all can only spend so long ignoring the money side of your fine art career before you observe yourself unfulfilled personally, professionally, and financially. The sooner you have the guesswork out of your financial situation, the sooner you tin can plan alee for how yous are going to sustain your livelihood. Plus, you'll exist able to ready physical goals for exactly how much y'all need to earn and save to comprehend your expenses.

Tie up the loose ends

If you are like most artists making a living from your artwork, you will probably have a few other income sources from your gallery or a side gig. If this is the instance, make sure y'all get a 1099-MISC from each different income source that you received over $600 annually and file this as along with your sales income.

Consult a professional for communication

In that location are many facets of the art earth, and each one has an practiced. If you accept any questions about filing you taxes, always consult a tax good. Information technology could end upward saving y'all money in the long run.

Before consulting an accountant, brand sure to have copies of your receipts, invoices, sales reports and expense reports from your Artwork Archive account. These documents will exist your commencement resource when assessing your revenue enhancement filing.

Ready to go started? Expense tracking is included on Professional and Principal plans on Artwork Archive.

Check out this tutorial on setting upward your expenses in Artwork Archive.