Every independent contractor can agree that tax season is one of the most perplexing and stressful times of the year, regardless of whether they are filing for makeup artist tax deductions for the first time as a makeup artist or have been doing so for decades. It might be challenging to keep up with the constantly changing rules and regulations because no two tax files are the same. Not to mention, there’s always the worry that you’ll make a mistake and end yourself in legal trouble.
Here is the list of the top five things for makeup artists to be aware of before Tax Day. However, as always, you can seek the advice of our expert tax accountant to guarantee that your taxes are prepared accurately and in accordance with your best financial interests.
Here are the top 5 things makeup artists should keep in mind when it comes to artists tax deductions. These things will help you file artist taxes and teach you what to focus on when filing taxes and reduce tax liabilities.
So why are makeup artist tax deductions as a freelance makeup artist so much more difficult than they were when you had a 9-to-5 job? You are now considered an independent contractor, which explains why. When you have full-time employment, your employer will automatically withhold federal and state entertainer tax deductions from your pay check in advance. As a sole proprietor (also known as a self-employed person), you get paid in full before taxes from customers. As a result, you will eventually be required to pay federal, state, and local income taxes as well as make contributions to social security and Medicare.
You must yearly complete Schedule C, Schedule SE, and Form 1040 in order to record your income and pay those taxes. It’s crucial to keep in mind that you use Form 1040-ES to make quarterly tax payments. To keep track of when you must submit your payments, go to the IRS quarterly tax deadlines.
However, health insurance is not related to the industry, but every freelance person should keep this in mind.
You should be aware that you may deduct the cost of your health insurance from your taxes if you do not have access to a group makeup artist insurance plan. As an “above the line” deduction, health insurance can deduct before calculating your gross income. However, remember that even if you choose to pay your own health insurance premium, you could not be qualified for this deduction if you are eligible for health insurance through full-time employment or a spouse’s employer health plan.
Business Travel Expenses
Your gas and mileage are a further crucial deduction to be aware of. Since driving your automobile for business can sometimes regard as routine and unimportant, it’s a deduction that single owners frequently ignore. However, if you use your automobile for work-related activities, like going to a client’s location, the deduction of 57.5 cents per mile might amount to a sizable sum. Make careful you keep complete mileage logs for each job you perform during the year in order to claim this deduction. Purchasing mileage and business apps made especially for this purpose will make the process much simpler and less time-consuming while ensuring greater accuracy.
The same number of deductions that single proprietors fail to take advantage of are also taken in error, hurting you if you don’t file your taxes appropriately. You can deduct reasonable business expenses like mileage, but you cannot deduct any personal expenses. For instance, you can deduct the cost of a makeup item you buy for your kit but not the cost of your most recent skincare purchase. Similarly, if a room in your house is utilized for anything other than an office, you cannot deduct it from your taxes. You might be able to deduct the cost of a specialized studio space.
However, if you work from your home office or from the comfort of your living room, for example, you cannot choose to take a deduction for your workspace. As a lone proprietor, in particular, it can be challenging to distinguish between expenses that are acceptable and those that are not. Start by determining if the spending is entirely for business purposes or if you will also benefit personally. Consult your CPA if you have any questions to be sure your deductions are valid and to assist you in preventing an audit.
When you need to quickly grab a single item for work, managing a stack of receipts and expenses might be challenging. However, with a little willpower, you may create positive routines and behaviors to keep this crucial step under control!
To produce digital copies of your receipts for your records, there are solutions available such as phone apps, receipt scanners, and more. Mobile receipt uploading is a feature that QuickBooks, a well-known bookkeeping program, offers. Receipts that you have in your email can submit them on QuickBooks, and they will save in your QuickBooks account.
Another popular option is Genius Scan, which enables you to rapidly scan a document, give it a filename that will make it easier for you to locate it later, and send the PDF version of the document to yourself. Have an exclusive bank account for your artistic endeavors? You can sign up for notifications each time you use the card from any credit card company.
You’ll have a simple way to monitor your spending if you use that card only for company expenses!
If you are looking for an entertainment tax accountant, contact AS Tax & Accounting to get a certified expert who knows where to save and what to pay taxes on.
Frequently Asked Questions on Makeup Artist Tax Deductions
You can write off any durable materials you used to create your artwork on your tax return. Included in this are your tools, raw materials, any electricity used to produce your art, and your makeup. Usually, you use up these materials within a single year.
You must pay income taxes on all of your earnings as a makeup artist, both freelance and W-2.
Makeup. Tax deductible regulations for cosmetics are very tight. Similar to the wardrobe deduction, makeup that you use for stage or photo sessions are eligible to write off, but not if you used the same makeup outside of the workplace.