Wednesday, March 18, 2015

Get Your Coins: Taxes and Keeping it Organized

FULL DISCLAIMER:   I am NOT an accountant. These are simply things that have helped me and other colleagues to prepare for tax season. 

Taxes…Why is it important for us to keep track of our finances?  It’s easy for the creative types to dislike and/or avoid the details that get in the way of our creative process. I would like to call myself a highly organized person, but I am really just a clumsy, messy person under the guise of  order. I have been burned before as a result of my lack of organization! 

So, why is it important to keep track of our finances as artists?  We are private, small business owners! You happen to be the CEO of Your Awesome Voice, Inc. That means that we get to make our own schedules and do what we love. But, this also means we have to be diligent about keeping record of our expenses so that we don’t get screwed out of our hard earned coins come tax time! That Chanel Lipstick in “La Sensuelle” that makes you feel like a rock-star and helps you to nail ALL your auditions, is an investment you can’t make when your nickels are reduced to pennies.  

Many companies and organizations that hire you for Your Awesome Voice, Inc. are non-profit. As a result, you are usually asked to fill out a W-9 Form and you receive a check from the organization that has not been taxed. However, this does not mean you will not be asked to pay taxes on that money in the future!!! So, to keep as much money in your pocket as you can, here are some tips:

1. Save your receipts!
Saving your receipts from your gigs helps greatly in write-offs when it comes to doing your taxes. I usually separate receipts into categories (travel, food, etc) that are placed into bags and then are placed in a dated manila folder that is also dated with the name of the gig along with any copies of forms I was asked to sign (contracts, tax forms, accident reports, etc.) so that the information is all in one place. 
A few things that you might be able to write-off (this list is not inclusive):
  • food and meals purchased
  • gifts purchased for your colleagues (chocolates, thank you notes, flowers, etc.) 
  • any purchases used solely for the gig
  • travel expenses
*Note: If you were given a travel stipend or per diem for food, those expenses are not write-offs.  

2. Track your mileage for auditions and gigs.
If you drive, rent cars, fly, or do any traveling for your auditions, keep track of it! You’re able to write a number of these things off as a business expense. 

3. Keep receipts for any purchases related to your business.
That $20 receipt for tabs and highlighters for your scores counts as a business purchase. That Traviata score you had to replace that you meticulously tabbed and highlighted after your water bottle decided to open itself in your bag? Yeah, that counts, too.  

4. Save all records of forms and contracts.  

I have all of this stuff “saved." Now what?  

Organize it. Organize it.  Organize it. 
It’s very easy to "save" a receipt and then forget what its purpose is and as a result it becomes a bookmark in that one book you bought for that thing that you don’t read anymore. I have found that keeping either an envelope marked clearly with the name of the gig or a plastic sandwich bag works wonders when you are on the go! Concerning mileage tracking, I’ve seen those cute little black books they sell at Office Depot, but this girl needs another book to go in her giant bag like she needs another person telling her to audition for American Idol. I simply write the mileage in my planner on the date that I traveled. That means I also have the name of the gig as well as the date so I can transfer that information to my envelope during my great office purge every month.  

I know this sounds like a hassle, but it makes your accountant smile when you come in around tax time. It also allows you to be more concerned with staying a super Sexi Soprano at Your Awesome Voice, Inc. #stayfamous