If you haven’t done your taxes, you should be doing them now (unless you’ve filed for an extension). In either case, there are art-related expenses you may be able to deduct, and I want you to be aware of them.
(Please note that you MUST check with an expert tax attorney or accountant, and know that in order to make certain deductions, there are particular qualifications. Since being an artist is often considered a hobby business, there are specific guidelines you must follow.)
Here is a list of potential deductions to consider (again, check with your experts):
Magazine Subscriptions for Professional Enhancement
Yes, your subscription to PleinAir and/or Fine Art Connoisseur could be tax-deductible.
That means your attendance at our Plein Air Convention and other development events, including workshops, can potentially be deducted, including your travel costs, mileage, hotel, meals, and registration fees. Also, art-related travel — for meetings with galleries or clients or to other events related to your business — could be deductible as well.
Advertising and Marketing
If you’re advertising in Fine Art Connoisseur or PleinAir, in our PleinAir Today and Fine Art Today newsletters, or on our websites like OutdoorPainter.com or FineArtConnoisseur.com, you should be able to deduct that expense. And you should also check into deducting the cost of your website and its hosting and maintenance.
Training Materials: Videos and Books
If you’re buying marketing videos, such as my Art Marketing Boot Camp series, or if you’re buying videos on how to be a better painter, such as those we create at Streamline Art Video, those too should be tax-deductible, whether you’re using DVDs or downloads. Training books are also usually deductible.
Entry into Art Competitions
You’re entering contests to get noticed, so it’s a marketing expense. Your fees to enter events like our PleinAir Salon may be deductible. (Note that if you win the $15,000 prize, or other cash prizes for your art, you will have to pay taxes on that income.)
Your Studio and Materials
Anything related to your art business, such as a dedicated office or studio space in your home should be deductible — though be careful to make sure the area is dedicated to business, and know that this can be a red flag for audits. You may also be able to deduct supplies, such as brushes, paint, canvas, easels, frames, lighting, etc. You’ll need to check on large items like furniture or printers, which are considered capital expenditures and are often handled with a depreciation schedule.
Dues, Memberships, and Legal
I deduct my membership fees for the National Arts Club, Oil Painters of America, and the California Art Club, and for other professional memberships. You should be able to as well. You may also be able to deduct fees for copyrights, legal fees, etc.
I cannot advise you on the exact nature of what you can deduct, but these are some things to consider as you do your taxes. Again, there are professionals who specialize in taxes, and even taxes for artists. But you should look into all the deductions you may be able to take; it will be well worth your time.
PS: Tax time is always an eye-opener because it places financial reality right in our faces. Why didn’t I make more money? Why was I not more successful? Thankfully, April is early enough in the year that you can still make dramatic changes in your life, focus on your marketing, and increase your art sales for the year. I believe in you! If you’re not happy with your current status, start reading some of the art marketing posts on this blog, and make up your mind to make changes.
Just to avoid any confusion on the hobby vs business front, it’s also well worthwhile having a read of the IRS Publication Publication 535 “Business Expenses” https://www.irs.gov/pub/irs-pdf/p535.pdf For use in preparing 2014 Returns
In particular in relation to what the differences are between a hobby and a business. Bottom line you can’t claim business expenses for a hobby.
“In determining whether you are carrying on an activity for profit, several factors are taken into account. No one factor alone is decisive.
Among the factors to consider are whether:
* You carry on the activity in a businesslike manner,
* The time and effort you put into the activity indicate you intend to make it profitable,
* You depend on the income for your livelihood,
* Your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business),
* You change your methods of operation in an attempt to improve profitability,
* You (or your advisors) have the knowledge needed to carry on the activity as a successful business,
* You were successful in making a profit in similar activities in the past,
* The activity makes a profit in some years,
* You can expect to make a future profit from the appreciation of the assets used in the activity.”