That dreaded “T” word. You know, that thing that you always put off until the last minute, and confuses you to no end? TAXES. Taxes can easily become the bane of existence to many inexperienced dancers and entertainers. What do I write off? What can’t I write off? 1099S? W-2’S? Do I claim a dependent? The list goes on and on.
Not to worry, your trusty Fly Gyal Industry Insider is here. I am going to give you some easy-to-follow guidelines for doing your taxes in a way that will help you keep as much of your hard earned money as you can.
1. Keep your receipts!
This doesn’t necessarily mean that you need to keep numerous shoeboxes full of old papers like a hoarder. It just means that you should at least keep an online bank statement of your spending and expenses so you can have a clear record to use when writing off business expenses. Everything from haircuts, clothes, gym memberships, travel expenses, even massages can be written off as business expenses when your business is your body!
2. Save 15%-20% of 1099 income over the year
When the majority of your work is 1099 or not taxed, you are expected to pay taxes on that income at the end of the year. get in the habit of saving a portion of this income so come tax time you have a fund devoted to paying whatever taxes you end up owing.
3. File early!
The earlier you file your taxes the less stress you will have when it gets down to the end of tax season. Also, when you file early your taxes normally get processed faster, so you can get your return sooner.
4. Use a service like Turbo Tax, or a personal tax accountant
Trying to go through the paper work of filing your taxes by yourself is a fate I wouldn’t wish on my worst enemy. I have used Turbo Tax with great results for the past several years to do my taxes and I recommend it to most people. If you are someone who is making a substantial income, it makes sense to hire a personal tax accountant that can ensure you keep as much of your money as possible.
Aside from the different sources of income we as entertainers have, filing taxes is pretty much as straight forward for us as it is for everybody else. You are recording your yearly income and then based on that number and a few other factors, the IRS tells you how much you owe in taxes, or how much you should get back in a refund.
The best advice I can give anyone who is new to taxes is just to relax, take it step by step, and be thorough. Don’t stress about it too much! If life gets really busy you can usually get an extension filing on your taxes for up to 6 months.
Here are a few important dates to remember:
January 30th, 2013: IRS begins accepting tax returns for processing
March 15th, 2013: Deadline for corporate tax returns
April 15th, 2013: Deadline for individual tax returns
All of this information and more regarding income taxes is available online at WWW.IRS.GOV
Photo Via Gold Silver Economy