Tax deductions for artists

For example, self-employed income would include payments received for artwork sold at an exclusive art show, on consignment at a studio, even at a local event such as a fair. The income may reported on a Form 1099-NEC, Non-Employee Compensation, on a Form 1099-K if you received credit card, debit card, or other types of payment through a payment processor, and cash and checks. If you are self-employed and your net earnings are $400 or more, you must pay self-employment tax on the income you report on Schedule C. In addition, you may need to make estimated payments to cover the amount of self-employment tax or income tax associated with the income you report on Schedule C.

You may be able to reduce your taxes by deducting unreimbursed, job-related expense from your self employment on Schedule C. You should keep receipts to substantiate these expenses. Examples of some of the items you may be able to deduct include:

• Subscriptions to trade journals related to your work
• Dues for trade associations or unions
• Continuing education
• Payments to galleries to show your work
• Shipping cost for your work when purchased by out-of-town buyers
• Insurance premiums for protection against liability or wrongful acts
• Specialized equipment or tools that are replaceable within one year
• Safety equipment such glasses, thermal aprons, special gloves, etc.
• Sales taxes paid by your customers
• State or local government regulatory fees, licenses, or flat rate occupational taxes, provided these fees are not paid for initial certification or licensing

You may be able to deduct work-related education courses or seminars if they meet certain requirements. Education typically meeting the requirements includes refresher courses, courses on current developments and vocational courses. Education that qualifies you for a new trade or business or that helps you to meet the minimum education requirements of your present trade or business may be eligible for the Lifetime Learning Credit. For example, an artist cannot deduct the expenses of going to general contractor school to become a contractor on their Schedule C, but the may use those expenses for an education credit. Additional expenses that may be deductible include:

• Business bad debts
• Car and truck expenses when getting from one work site to another
• Employee salaries or other forms of compensation such as bonuses or commissions
• Legal and professional fees, such as accounting or legal advice that are directly related to the operation of your business
• Rental expense for business use property such as trailer and equipment rentals
• Travel expenses for traveling away from your business home if you are required to be away from home for longer than an ordinary day's work - examples of deductible travel expenses include transportation by car, air, or bus, tolls and parking fees, lodging, and meals (with limitations)
• Advertising
• Tool and equipment repairs and maintenance
• Supplies and incidental materials
• Excise taxes and personal property taxes imposed on your business