Tax flavor. Cue a collective groan.

Are you set 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's of import to recall that naught helps more than keeping all of your financial records organized throughout the year. This includes knowing where all of your sources of income are generated and where your money is going—and so tin can get a improve understanding of your net income.

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

Don't worry, we are hither for you lot.

Whether you are looking to save with common tax deductions for artists, want to know if yous authorize for deductions, or simply want financial insights yous can employ to strategize for success, take a look at the principal categories of expenses that you lot tin track in Artwork Archive for your art business.

Practice you qualify as an art business for deductions?

When information technology comes to deciding if y'all demand to file taxes as an artist, the IRS draws the line betwixt whether you define your practise equally a "hobby," or a "business."

Quite simply, your art practice is defined as a business organization if you have the intention to sell your work regularly for profit and a hobby is done without financial incentive. If you lot run your studio for profit, you can deduct concern expenses. However, if your fine art exercise is a hobby, y'all practise non authorize to deduct your art expenses from a unlike income stream on your taxes. and if your practice is not for profit, you cannot authorize your losses to offset another income.

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

Ask yourself these questions as posed by the IRS:

Do you lot put time and endeavor into your art-making exercise with the intention of selling the works?

Exercise you lot rely on this income to consume and pay rent?

If you lose money doing this activity, was information technology within or beyond your control?

Accept you made profits in the past?

Have you inverse your practice in order to improve profitability?

Exercise y'all wait to meet profits in the future?

It's ok if you don't make a profit every twelvemonth, but every bit a full general guideline from the IRS, they desire to see a profit three out of five years.

Know your business classification

Do a little inquiry and decide what type of business structure you want to become. Many artists choose to classify their business equally a sole proprietorship because it's piece of cake to set and meets the needs of a basic studio practise.

The process varies from state to land, so head over to your local Clerk of Courts website, your land'due south Department of Revenue site, and the IRS site to come across what steps are required adjacent.

TIP: Start a dissever business checking account with your banking company. That mode, your business and personal expenses aren't all mixed in together when it comes time to practise taxes. And, don't forget to salvage your business receipts!

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

Artwork Archive'sExpense tracking feature makes bookkeeping & tax fourth dimension easy for your art business organization.

Accept a wait at the list of common expenses that you can deduct equally an artist.

Advertising

Anything you spend coin on promoting your work can be deducted. Ad expenses include print ads, business cards, fliers, sponsorships, Facebook and digital ads, as well as your website hosting and cosmos costs.

Business Insurance

Just what information technology sounds like. If you lot pay for business insurance, keep runway of your payments and write them off come tax time.

Committee & Fees

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

Payment processing fees are also included in this section. If you take payment online through a platform similar Paypal, Square, Stripe or Intuit y'all tin can expense the processing fees.

Legal & Professional person Services

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

Materials & Supplies

Brushes, clay, canvases, easels, glaze, tools… anything you lot use to make your artwork should be recorded equally an expense.

Big Equipment counts as a depreciable asset and is anything that y'all will use for your art business or studio for more than than 1 year. Think computers, kilns, cameras and any larger expenses that are used over multiple years. You can write this off all in ane or over many years.

These are substantial expenses. For these larger items, you tin report the asset'south depreciation as a deductible expense or you lot tin can merits a larger deduction in the beginning twelvemonth.

Meals & Amusement

If you have coffee with a customer, have a collaborator out for dejeuner, or have a dinner with a business concern partner—these costs tin can all be deducted at 50% every bit long equally the purpose of the meal or consequence is to talk business organisation. Keep your receipts, snap a picture, upload them into Artwork Archive, and brand note of the purpose of the repast.

Office Supplies

Paper, pens, staplers, paper clips, folders, art for the walls, a mouse for your computer—you become the point. Only don't forget online services such as web hosting, software subscriptions like Artwork Archive, an accounting service, or image services, and annihilation else necessary to proceed your online presence and career running.

Prison cell phone and internet costs can likewise be recorded. If you use your prison cell telephone and net for both concern and personal utilise, you can split up the monthly charges based on an estimate of how much you use for your fine art business.

With tax season right around the corner, Artwork Archive makes it like shooting fish in a barrel to manage your business expenses.

Professional Development

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

Rent & Lease

Pretty straightforward! If you lease office space, studio infinite or even a storage space outside of your home, that monthly fee can be expensed along with any utilities y'all take to pay along with information technology.

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

Repairs & Maintenance

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

Taxes & Licenses

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

Travel Costs

Going out of boondocks 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.

You can also expense $0.58 per mile anytime yous use your vehicle to bulldoze to a coming together, choice up supplies, go to an art off-white, etc.

Note: Every bit always, we encourage you to consult with a tax professional for help with your taxes and this should simply act equally a guide to get you started tracking the expenses for your fine art business.

Now that y'all know what to keep track of, the question is how?

These expenses add up quickly! But with the Expense Tracking feature in an art management tool similar Artwork Annal, you tin can keep track of them with ease.

Bought new paint or business organisation cards? Enter that every bit an expense in Artwork Archive.

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

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

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

Information technology'south of import to know where your art business stands at any indicate financially, and then y'all are never caught off guard—tax flavor or not.

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

Easily calculate your expenses and sales income in Artwork Annal to get your net income.

Y'all recorded your sales in Artwork Annal. You kept your receipts and uploaded them into the Expenses feature.

If you waited to the cease of the yr this time, good luck—we've been in that location. It'southward less painful to regularly upload your expenses and record your sales, and then you aren't stuck with a week of admin tasks. The all-time time we find is usually one time at the end of the month, merely you can detect the all-time time that works for your schedule.

Program for the future

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

You can but spend so long ignoring the money side of your fine art career before y'all find yourself unfulfilled personally, professionally, and financially. The sooner you accept the guesswork out of your financial situation, the sooner you can plan alee for how you are going to sustain your livelihood. Plus, you'll be able to set physical goals for exactly how much you demand to earn and save to cover your expenses.

Tie up the loose ends

If you are like most artists making a living from your artwork, you volition probably accept a few other income sources from your gallery or a side gig. If this is the case, brand sure you lot get a 1099-MISC from each different income source that you received over $600 annually and file this as forth with your sales income.

Consult a professional for advice

In that location are many facets of the art world, and each one has an adept. If you have any questions about filing yous taxes, e'er consult a tax practiced. It could end upward saving you lot money in the long run.

Before consulting an accountant, brand certain to have copies of your receipts, invoices, sales reports and expense reports from your Artwork Annal account. These documents will be your first resource when assessing your revenue enhancement filing.

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

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