Essential tax advice for US actors
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Many actors are considered self-employed when it comes to filing their taxes. When filing your regular year-end 1040 income tax file, you will also be required to file a 'Schedule C' and state all the 1099s you received throughout the year. There are many unique deductions actors are allowed to take advantage of - these should be reported on the 8829 form for home office deduction. Further to this, you will liable to self-employment tax in addition to federal income tax. Paying estimated quarterly taxes may be necessary on Form 1040-ES for some, but even if this isn't mandatory (your tax liability does not exceed $1,000), it can be a great way to budget throughout the year.
What can I deduct?
Deductions can be linked to any costs incurred as a direct result of your work. For actors, this might include but is not limited to travel and transportation, equipment such as microphones for voiceovers, costumes, home office expenses, legal and professional fees and agency fees. The IRS states the cost can be deducted provided it is 'reasonable and necessary' and you have evidence to show the costs were in direct connection with your trade, business, or profession.
Using a car
Actors may often be required to travel far and wide to get to auditions, performances or rehearsals. Because of this, the IRS allows you to deduct the cost of travel in one of 2 ways: either 53.5 cents a mile of all trips you have recorded the distance and purpose of OR determining the cost of the vehicle (over 5 years). The latter is extremely labor intensive as you are required to keep track of gas slips, insurance, and repair costs in order to calculate the car's expense to yourself.
Travel and meals
Deductible expenses are applicable to 'overnight' travel, defined by the IRS as traveling to a destination that would be unrealistic or inconvenient to get back home from without staying overnight. 50% of the cost of meals on your trips are also allowed to be deducted as well as a separate deduction for meals that fall under the 'reasonable and necessary' umbrella, relating to your work in your day to day life. An example of this might be a business meal with potential directors or agents to discuss your work prospects.
Home office
While actors 'working' from a home office has been up for debate for many years, it is liable as a deduction on your tax form. You may be using the space as a rehearsal room, recording room or storage space for scripts so you can able to deduct the maintenance cost of running the space such as utilities, mortgage, and repairs. The IRS rules state that the space used cannot be multi-purpose e.g. your living room unless the workspace is cornered off as a clear 'office' environment.
Unique deductions
Actors are notoriously creative so the IRS has a few creative deductions for you to include themselves. You are able to deduct within reason the cost of CDs, stage makeup, and costumes. Attending concerts for 'research purposes' can also be included but you need to be honest with how your attendance will benefit your work prospects and think twice before trying to justify all of your extracurricular activities.