As such, the following is a list of categories in which your expenses as an artist/business could qualify as deductible from your taxes. It’s important to note these expenses in general but just as important to speak to a tax professional to make sure they are deductible in your situation. Also, consider these as points of information and places to start research for your context as some of the following may not apply to you and vice versa (expenses that you encounter regularly in your business but not listed below).

IMPORTANT TIP

Keep all the receipts for anything you’re thinking of writing off on your taxes!

If you have the option, consider having your receipts emailed to you and then save them in a folder, Dropbox or Google Drive to access them digitally. If you don’t have a reliable scanner, take as detailed pictures as possible using a camera/phone (the iPhone, for example, has a decent scan feature in the Notes app) in case the physical copy degrades (receipt ink is the worst) or is lost.

Establishing a reliable record-keeping process for you is key and is even a defining factor in how the IRS determines you as a business: “Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.”

Deductibles to Consider

Office Supplies/Materials

Printing
Printing costs related to your artistic practice can be deductible. For example, as a writer, I tend to not use my home printer to make an entire copy of my manuscript that I want to mark up and instead send it to FedEx. -Reyes

Postcards, posters/flyers, business cards, signage, stationary… the list can go on and on. -Angela

Software + Apps

Quickbooks/ Accounting Software

Adobe Creative Suite + Social Media and/or Photo Apps

Have a subscription to Adobe Creative Cloud? How about a photo editing app on your phone? Have a Link Tree for your business Instagram? Any application that you use towards producing a finished product or marketing your work or services can be deducted as a business expense. -Angela

Microsoft Suite 
I used to get free Microsoft Office Suite from a job I had, but that expired recently and have to pay for the 365 subscription. I know there are some free alternatives, but I’m too used to Microsoft Word since all my years of files/writings are compatible in this format. -Reyes

Website, Domain + Web /Email hosting
I use Squarespace and have two domains for it that are important to my writing career in being found and contacted. –Reyes

Don’t forget website hosting fees! Paid a contractor to build or maintain your website? That counts too. –Angela

Supplies

Materials

Materials/supplies costs for artists might include purchases of a visual artist’s painting supplies, a musician’s sound equipment, or a dancer’s costumes. Conceptual artists might need to buy a 100-pack of plastic combs! If you’re legit using it to make your art, it belongs here. -Julia

Notebooks, pens, paper, special paper, highlighters, all the good stuff a writer needs. –Reyes

Laptop/Accessories
My laptop burnt out last year, and not many places take your wild scribblings in notebooks as a submission anymore. Buying a laptop to type and send my work is very important to my career, to say the least. -Reyes

Research & Experimental Costs

Books
As a writer, reading is integral to my growth as a creative and active member of my artistic community. Thus, buying the latest books and seeing what other writers are doing is key to making sure I’m at the top of my game and support fellow writers. -Reyes

Contract Services/ Contract Work

Legal Services
As an event organizer transitioning to virtual channels, I’ve had to consult a lawyer on usage rights and fair use. -Reyes

Accountant/ Tax filing

Pay someone to do your taxes? How about Turbo Tax? Save those receipts! -Angela

Artist Contract Work
As an event organizer in my writing practice, I’ve used grant money, paid to me as a sole proprietor, to pay other creatives to contribute to my public-facing events/projects/readings. -Reyes

Fees

Journals/Magazines/Contests/Juried Exhibitions/Shows
Though they are annoying, submission fees can be tax deductible in my case because it’s an integral part of being a contemporary writer and being known, read, and commissioned. -Reyes

Art Shows

Paid a fee to participate in an art market or exhibition? Counts as a business expense! -Angela

Professional Development

Continuing Education/Classes
Did you take a writing workshop to improve your craft? Pay for a ceramic class to learn a new technique? You can write education expenses off as long as it “maintains or improves skills needed in your present work.” -Reyes

Conferences
I go to conferences to network, connect, and discuss with other writers, publishers, and organizers. When I register for a conference, there’s often a registration fee which has been tax deductible in my case. -Reyes

Travel expenses

Mileage

As a former interior designer, I did a lot of driving– to client homes, architect meetings, furniture stores, (so many furniture stores!), etc. All those miles really add up over a year. Keep a travel log (in your phone or via a notebook) that lists miles driven each day and where and why you traveled. This applies to any business related travel. Travel to meetings, job sites, workshops or conferences, heck, even trips to Home Depot can count, etc. Then at the end of the year, add up the total miles and times by the IRS approved mileage rate for that year, and BINGO– a hefty tax deduction. -Angela

More Info: https://www.irs.gov/tax-professionals/standard-mileage-rates

Home Office/Studio

The IRS allows for individuals to deduct a home office as a business expense if it qualifies. The IRS states: “Your home office will qualify as your principal place of business if you meet the following requirements.

• You use it exclusively and regularly for administrative or management activities of your trade or business.
• You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.”

There are other qualifying factors to consider: https://www.irs.gov/publications/p587#en_US_2020_publink1000226302

If your home office qualifies, then you’ll have two options as to how to claim it as a deduction on your taxes: simplified or actual expenses, outlined here: https://www.irs.gov/publications/p587#en_US_2020_publink1000226317

Again, all these deductions must be related to your business as an artist.

Tax Filing Assistance

If you are using any tax filing help, make sure to call ahead and ask if any of the preparers on call have experience working with and/or are able to work with artists and their unique needs as a business. Tax specialists have areas of expertise (such as investments, retirement, real estate, etc.), and it’s important for you to know if your tax preparer can assist you and your art practice in the best way possible.

Free*

https://www.bakerripley.org/services/baker-ripley-tax-center

http://www.beyondcareers.org/current-events/

http://www.stcl.edu/academics/legal-clinics/

https://www.uhd.edu/academics/business/acci/vita/Pages/default.aspx

https://www.mamhouston.org/taxes

*Each service has different income levels to qualify.

Free/Paid*

Keep in mind that if you use a paid service, ask how much they will charge you to file (they may charge you as a small business, for example); do not assume you will be charged the lowest amount as an individual.

https://www.hrblock.com/

https://www.jacksonhewitt.com/file-taxes-options-products/get-a-tax-pro-at-home/

https://turbotax.intuit.com

*Some places offer free services up to certain income levels and/or prerequisites.

The post Fresh Arts Tax Cheat Sheet for Artists appeared first on Arts District Houston.

Watch live at Noon on Thursday, May 28: https://www.facebook.com/fresharts/videos/576251579955260/

Related Resources

About the presenter: Julia Barbosa Landois

Julia Barbosa Landois is a visual artist and performer with over a decade of experience working in the arts as an educator, exhibitions coordinator, and art-handler. She holds a BFA in Painting with a minor in Women and Gender Studies from the University of Texas at San Antonio and an MFA in Sculpture/New Media from the University of Pennsylvania. Her work has been featured in galleries, museums, and performance festivals in the USA, Latin America, and Europe, and her awards include residencies at the Santa Fe Art Institute, Lademoen Kunstnerverksteder (Norway), and Künstlerhaus Bethanien (Germany). Landois was a 2018-2019 Studio Resident at the Lawndale Art Center and received a grant from the National Association of Latino Arts & Cultures in 2019 to co-create MantecaHTX, the nation’s first online directory of Latinx creatives. Her passion for empowering local artists is why she enjoys writing grants to help Fresh Arts do its vital work in the Houston creative community.

Subscribe to the Fresh Arts Resource Newsletter to receive monthly opportunity alerts:

http://bit.ly/ArtistResourceNewsletter.

The post Facebook Live Chat: Project Pivoting in Uncertain Times appeared first on Arts District Houston.

Fresh Arts recognizes artists as innovators. In a time of uncertain income streams for so many in the creative community and other sectors, artists are being forced to pause or adapt their creative practice, learn new digital skills or rely on their other talents and skills to generate income. 

To amplify the efforts of local artists and inspire the creative economy, Fresh Arts hosted a Facebook Live conversation with three local creatives to discuss how they are staying resilient and adapting during this time. 

Nick Gaitan

Musician Nick Gaitan, a musician and self-described “hustler”, is no stranger to juggling gigs and evolving as an artist. Nick has played in Houston’s beloved Los Skarnales, while also fronting the Gulf Coast-centric Umbrella Man, while also holding down the low end for Billy Joe Shaver and Nikki Hill.

Nick is continuing work through Virtual concerts (see Discovery Green) and is accepting virtual tips via his social media. Gigs aside, Nick is also available for autowork, handywork, plumbing, music lessons and tutoring.

• Follow him: @nicholas_gaitan
• https://www.facebook.com/NickGaitanMusic/

View his March 26, 2020 Virtual Concert with Discovery Green here.

• Virtual Tip at Venmo: @Nick-Gaitan
• Zelle: nick.gaitan@gmail.com
• Paypal: paypal.me/NickGaitan713
• Square App: nick.gaitan@gmail.com
• Cash App: $nickgaitan

Edgar Medina

Edgar Medina is a local Houston artist that specializes in abstract and mixed media paintings on canvas. He has been exploring his artistic passion for over ten years and has showcased his work at art fairs around the country. Edgar’s art gallery and studio is located in the Montrose community where his work is always on display.

Edgar is available for commissions of 6″x6″ works of art for $100 through his Send Some Joy campaign. While his studio is closed to the public, he is hosting virtual exhibitions of his work.

• Follow him @EdgarMedinaStudio
• RSVP to his show: “The Sun Will Rise Virtual Art Show” (ongoing through the month of April 2020)
• www.medinaedgar.com/

Dominique Røyem

Dominique Røyem is the Music Director of the Fort Bend Symphony Orchestra.  An active guest conductor, she has worked with ensembles such as the Ukrainian State Orchestra, Plevin Philharmonic, Galveston Symphony, Moores Opera Center, Sugarland Opera, HBU Opera Theatre, and the Houston Civic Orchestra. She has a Doctorate in Orchestral Conducting from the University of Houston Moores School of Music and currently lectures at the Women’s Institute of Houston and serves on the National Board of the Conductors Guild.

Dominque is currently posting music explainer videos on YouTube. Supporters can view content and contribute to her Patreon page.

• Support Dominique’s Patreon page
• Follow her @dominiqueroyem
• www.dominiqueroyem.com

In response to the COVID 19 pandemic and its impact on our creative community, Fresh Arts has launched a virtual workshop and conversation series as part of a storytelling and resource sharing initiative to amplify access to the information artists need most.

Have resources to share, stories to tell, artists you’d like to see featured, or have topics you’d like covered?

Subscribe to Fresh Arts Resource Newsletter to receive updates: 

http://bit.ly/ArtistResourceNewsletter

The post How Local Artists are Adapting Income Streams During the COVID-19 Crisis appeared first on Arts District Houston.

1. Know the Guidelines

As with your project narrative, the first step to crafting an effective budget is to familiarize yourself with the grant guidelines. Some awards are relatively unrestrictive while others may have very specific guidelines for use of funds. For example, the funder may stipulate that money may not be used for travel or the purchase of equipment. Some grants require matching funds from other sources, which means they will not fund the entire budget for the project and want you to list your other funding sources (both pending and secured). Other grants require applicants to have non-profit status or to be fiscally sponsored by a 501(c)(3) public organization. Make sure you’re clear on the funder’s expectations before you begin crunching the numbers.

2. Research, Research, Research

Research is essential to composing the most accurate budget possible for your project and projecting how likely it is that you will receive funding from a particular source. Start with the granting institution to whom you will apply. Do they award set amounts, or do grants occur within a wide range? How many projects did they fund in the last cycle and how much was each project awarded? Read about these other projects. Does your project have a similar scope and budget as the ones this organization has funded in the past?

Next, spend some time researching all of your expenses. Your budget won’t be set in stone – grant administrators know that unexpected changes may come up during the course of the grant period – but they do want to know that you are both professional enough to accurately estimate costs and responsible enough to spend the money wisely.

Expense categories may include:

• Your artist fee – Don’t forget to pay yourself for all of your time and hard work! *See more
• information about calculating this fee below.
• Collaborators – Others should be paid for their labor, too. *See below.
• Fabrication – Do you need to have something constructed, programmed, or composed? Get a
• quote and add it to the budget.
• Travel and/or meals, for you and your collaborators
• Supplies
• Rented equipment
• Marketing – project website fees, paid ads, printed matter, postcard postage, etc.
• Shipping – transport costs for your art, musical instruments, etc.
• Documentation – photo, video, and/or sound recording of your final event, exhibition, or performance, for your own portfolio and possibly for the granting agency

Need more help on developing a Project Budget?

In the meantime, our friends at Creative Capital have complied a downloadable overview with tips and examples.

• Performing Arts Sample Project Budget (Theater, Dance, etc.)
• Visual Arts Sample Project Budget (Painting, Sculpture, etc.)
• Moving Image Sample Project Budget (Video art, Filmmaking, Documentary, etc.)
• Literature Sample Project Budget (Screenplays, Novels, Poetry, etc.)
• Emerging Fields Sample Project Budget (Tech, Multimedia, Digital Media, etc.)

More Resources

BalanceCareers: Easy Steps to Create a Project Budget

More samples and articles coming soon!

The post Tips for Crafting an Effective Project Budget appeared first on Arts District Houston.

You work hard for your money and should keep as much of it as you can for yourself.  If you want to be financially successful, you should know how to manage money, use credit effectively, build wealth, and make good financial decisions throughout your life.

Below are a few online resources that we’ve found that provide additional insight into financial management.

Creative Capital: Financial Literacy Cheat Sheet for Artists

Because being deeply invested in money management often feels uncreative, many artists get comfortable with keeping their understanding of their financial health and future as vague as possible, a kind of “if I don’t see it, it doesn’t exist” approach. Luckily our friends at Creative Capital have compiled a Financial Literacy Cheat Sheet which includes:

• Artistic and Personal Finances,
• Paying Yourself,
• Federal Taxes, and
• Business Deductions for Taxes,
• Read more on their website: https://creative-capital.org/2017/01/19/financial-literacy-a-cheat-sheet-for-artists/

UH Financial Literacy 101 Resources

The University of Houston has a list of free and low-cost financial resources that are applicable to students and artists alike.

• https://guides.lib.uh.edu/c.php?g=433246&p=2953200

My Money.gov

MyMoney.gov is the U.S. government’s website dedicated to teaching the basics about financial education. Whether you are buying a home, balancing your checkbook, or investing in your education, these  resources will help you maximize your financial decisions. Throughout the site, you will find important information from 20 federal agencies and bureaus designed to help you make smart financial choices.

• Learn more at: https://www.mymoney.gov/

360 Degrees of Financial Literacy

360 Degrees of Financial Literacy is a free program of the nation’s certified public accountants to help Americans understand their personal finances through every stage of life. The website contains articles addressing such topics as “Freshman Finance 101: Money Management Skills for College Students” and “College students and credit cards: What you don’t know can hurt you.”

• Learn more at: https://www.360financialliteracy.org

FDIC Consumer Privacy

This page from the FDIC provides links to information about consumer financial rights, privacy choices, and privacy legislation as well as answers to financial privacy questions.

• More info at: https://www.fdic.gov/consumers/privacy/

The post Financial Literacy tools appeared first on Arts District Houston.

Financial Goals

Since many artists are self-employed, they must develop long-range plans, including a retirement plan. When you sell a work, put some of the income away in a safe place, such as a retirement account, bonds, or savings plan. It is never too early to start saving!

Download this worksheet from GYST to get started on your financial goal planning:

• Financial Goals Worksheet

BUDGET FORMS

Download these helpful Budget Forms (courtesy of GYST) to keep you organized.

Income Budget Form

Personal Budget Worksheet

Family/Individual Balance Sheet

Expense Budget Form

Debt Management Plan

EXPENSE WORKSHEETS

Expense checklist for actors PDF Version

 12 month expense worksheet for actors Excel Worksheet Version

Expense checklist for actors Excel Worksheet Version

Income Worksheets for Visual Artists coming soon!

INCOME WORKSHEETS

Income worksheet for actors PDF Version
Income worksheet for actors Excel Worksheet Version
 

Income Worksheets for Visual Artists coming soon!

Recommended Articles:

Below are a few articles from our friends at NYFA:

Building a Project Budget
Step-by-step tips for project budget building.

How to Budget as an Artist
Three steps to start taking control of your finances.

The post Budgeting and Income/ Expense Worksheets appeared first on Arts District Houston.

Need more guidance? Fresh Arts partners with Texas Accountants and Lawyers for the Arts (TALA) every February to provide a FREE tax workshop. Need even more help? Fresh Arts will be developing a Tax Toolkit for Artists early next year … stay tuned for more info!

Subscribe to our Arts Resource Newsletter to stay up-to-date on this topic and more.

Below is an overview of common Tax terms sourced by Void Academy. Just to be clear, we’re not CPAs or tax professionals. This article is meant to help demystify the process and should not be considered legal or financial advice. We always recommend you consult the IRS website and talk to a professional tax advisor before you file.

HOBBY VS. BUSINESS

Is your art a business or a hobby?

If you made “significant” profit from your art and you intend on making even more money the following year, then you can qualify your activities as a business. You do not need to be a registered LLC or other kind of corporation to be a business — you simply need to be making a profit off your work. (source)

You can check out the leading questions the IRS provides for this decision here.

STANDARD DEDUCTION VS. ITEMIZED DEDUCTION

Some of the most common deductions are expenses on your business, medical expenses, property taxes, and charitable donations. Though the number you come up with in deductions will not lower your tax rate (the percentage you pay each year), it will lower your taxable income. In other words, it will lower the amount of money the IRS will ask you to pay taxes on.

Standard Deduction: The standard deduction is for folks who either did not keep records of their expenses throughout the year or know that they will probably not have itemized expenses that are larger in sum than the standard amount. The standard amount is set each year by the IRS and is based on one’s filing status. It is the dollar amount that you can automatically write down as a deduction when you are filing your taxes. To figure out what your standard deduction is for this tax season, you can use this IRS provided online tool.

When to use an Itemized Deduction: According to the IRS you should only do itemized deductions when you know that it will be a larger number than the standard.

If you feel that your deductions for a tax year will be larger than the standard deduction provided by the IRS, then you should use the 1040 form add-on called Schedule A to list out your expenses item by item. Anything that you use to make something that you later sell can be listed as a deduction on this subform.

Related Article: Tax Deductible Expenses for Artists https://www.freelancetaxation.com/deductions-artists

CROWDFUNDING AND TAXES

Did you host a crowdfunding campaign to raise funds for an art project? If so, unless you are crowdfunding on behalf of a 501(c)(3) non-profit (see Fiscal Sponsorship), all the money you make through crowdfunding is considered to be income and should be filed under “Other Income” in Line 21 of your 1040 form.

Example: If you make over $20,000 on Kickstarter, Patreon, GoFund Me or any other crowdfunding platform, they are required to send you a 1099 form which details the amount of transactions and the amount of money you made in an official manner. Even if you made less than $20k and do not receive a 1099, you still need to report the income you made on your tax return.

Here’s a tip about crowdfunding and taxes: when you run a crowdfunding campaign, you should create a budget that allows you to pay yourself for your time and all other expenses involved in the project. When crowdfunding, you are usually asking for the exact amount of money you need to make a work of art happen. When you document your crowdfunding income for tax purposes, you will also need to document your expenses for the project, which should be equal. This essentially means that the money that went towards your campaign will be deducted from your annual income by the IRS and won’t cause you to pay taxes on it.

The post Tax Basics for Artists appeared first on Arts District Houston.

We’re always on the look out for more resources to share! Send your recommendations to resources@fresharts.org and we will gladly add them to this list.

Texas Accountants and Lawyers for the Arts (TALA)

TALA provides Texas artists and arts organizations with legal and accounting assistance to enable them to maximize their potential, shape our cultural landscape, and contribute to the creative economy.

Free legal and accounting services are offered to individual artists and arts related nonprofit organizations from all creative disciplines, including visual arts, musical performance, film and video, writing, acting, dancing, and performing arts.  As small TALA membership fee is required.

http://talarts.org/

United Way- Free Tax Preparation

United Way of Greater Houston supports free tax preparation through Baker Ripley’s Neighborhood Tax Centers, a key component of United Way THRIVE. In the last ten years, they’ve helped 118,000 families claim $468.5 million in refunds. Take advantage of this service to avoid costly preparation fees and keep more of the money you earned this year. 

For locations and a list of what to bring:

• Visit FreeTaxCenters.org
• Call our 2-1-1 Texas/United Way HELPLINE – just dial 2-1-1
• Download the 2019 Neighborhood Tax Centers flyer

For more information visit: https://www.unitedwayhouston.org/hidden-pages/tax

Baker-Ripley – Free Tax Preparation

Baker-Ripley (formerly Neighborhood Centers Inc.) sponsors free tax preparation by IRS-certified tax preparers each tax season. Families and individuals earning up to $58,000 can receive assistance on their returns. Free electronic filing is included, too. Eleven tax centers are available throughout Houston. Find the locations and hours online.

Baker-Ripley is a 110-year-old Houston nonprofit that provides a variety of programs and services for youth, families, and seniors. The organization has prepared more than 288,000 tax returns since it started this free service in 2009, saving families $200 on their return.

For more information visit: https://www.bakerripley.org/services/baker-ripley-tax-center

AARP Foundation Tax-Aide- FREE Tax Preparation

AARP Foundation Tax-Aide offers FREE tax preparation help to anyone and if you’re 50 and older, and can’t afford a tax preparation service, we were made especially for you. We understand that retirement or other life changes may mean your taxes are a little more complicated now. With the help of our team of IRS-certified volunteers we make it easy for you.

AARP Foundation Tax-Aide has more than 5,000 locations in neighborhood libraries, malls, banks, community centers and senior centers. There’s no fee and no sales pitch for other services and AARP membership is NOT required.

Several of Houston’s Public Libraries host AARP Tax Sessions each tax season.

Find a Tax-Aide location near you or visit: https://www.aarp.org/money/taxes/info-2004/about_aarp_taxaide.html

The post Local Financial Resources appeared first on Arts District Houston.

Are you looking for resources for COVID-19 related government loans and grants? Check out the resource page below.

Courtesy of USA.gov

Free Money from the Government?

In most instances, the federal government does not offer grants or “free money” to individuals to start a business or cover personal expenses, contrary to what you might see online or in the media. Websites or other publications claiming to offer “free money from the government” are often scams. Report them to the Federal Trade Commission. 

The government  does offer federal benefit programs designed to help individuals and families in need to become self-sufficient or to help lower their expenses. 

Government Grants

What is a grant from the government?

A grant is one of the ways the government funds ideas and projects to provide public services and stimulate the economy. Grants support critical recovery initiatives, innovative research, and many other programs listed in the Catalog of Federal Domestic Assistance (CFDA). Learn more about grants and types of grants.

Who can get a grant?

The federal government typically awards grants to state and local governments, universities, researchers, law enforcement, organizations, and institutions planning major projects that will benefit specific parts of the population or the community as a whole. 

Contrary to what you might see online or in the media, the federal government does not offer grants or “free money” to individuals to start a business, or cover personal expenses. However, the government offers federal benefit programs designed to help individuals and families in need become self-sufficient or lower their expenses.

Search and Apply for Government Grants

Use the federal government’s free, official website, Grants.gov rather than commercial sites that may charge a fee for grant information or application forms. Grants.gov centralizes information from more than 1,000 government grant programs to help states and organizations find and apply for grants.

• Eligibility – Most of the funding opportunities are for organizations, not individuals.
• How to apply – Get tips and tools to help you with the registration and application process. And learn how to write a successful grant proposal.
• Email notifications – Sign up to be notified by email about new grant opportunities.

“Free” Grants and Grant Scams

If you received information stating you qualify for a “free grant,” it is probably a scam. Get information from the Federal Trade Commission (FTC) to help you learn to recognize and avoid grant scams. If you have been a victim of a grant scam, you can file a complaint with the FTC. 

Contact your state consumer protection office if you have purchased a book or paid a fee to get grant information and are not satisfied.

Government Loans

What is a loan from the government?

Government loans serve a specific purpose such as paying for education, helping with housing or business needs, or responding to an emergency or crisis.

Loans are different than grants because recipients are required to repay loans, often with interest.

Examples of Government Loans

The federal government offers several types of loans, including:

• Student loans
• Housing loans, including disaster and home improvement loans
• Small Business loans

Search for Government Loans

Use the federal government’s free, official website, GovLoans.gov, rather than commercial sites that may charge a fee for information or application forms.

The post On Overview of Government Grants and Loans appeared first on Arts District Houston.