If you work in the United States, this article is for you... The dreaded date of April 15th - aka tax-filing deadline - always seems to approach faster than we’d like. *audible groan* And the reality is - there’s no way around it. Whether you own a dance studio or work as a freelance professional, taxes for dancers can be overwhelming. Somehow it always feels like you work so hard, only to see “half” of the money you sweated for - pun intended! - taken away on said dreaded date. However, there is some kind of financial relief with these two words: tax deductions (or write-offs).
Before we get into those magic words, let’s clarify the two basic types of tax documents. The first is a W2, which you will typically receive if you work as an ‘employee.’ This means that your taxes are automatically taken out of your paycheck each pay period.
The other basic tax document is a 1099. A 1099 is a document issued to “independent contractors,” or people who work for, but are not directly employed by, a company. It’s a very common way of payment for artists. Basically, it means that state and federal taxes are not automatically deducted from each paycheck, the way they are for traditional employees. In the case of a dancer, let’s say that you are hired for a specific project, and you are going to be paid $1,000 for your performance. After the performance, you will receive a check for the full $1,000, without having any taxes deducted.
Independent contractors who earn more than $600 through one company will be issued a 1099. So, if you work for two different companies, each paying $500, you won’t receive a 1099 from either of them (however, you are still legally required to report it to the IRS as self-employment income). But if you completed two jobs for the same company, each job paying $400, they should send you a 1099.
So, now that this is clear(er), let’s get into the positive side of things and what this article is really about: tax deductions for dancers.
A deduction lowers your overall taxable income, which in turn lowers the amount of taxes you may owe (or even get a return - oh yeah! - if you, for example, received more W2s than 1099s). Even if you are “just” a freelance performer, you are a small business owner - some of your expenses are the things you need to run your business. Here’s a list of common deductions that may apply to you.
Did you travel for a performance, audition, or workshop? Any travel expenses, such as plane or train tickets, hotel room or meals purchased on the road are deductible! Mileage is also a deduction: If you drive to an audition, or an unpaid gig, you can deduct 58 cents per mile driven (FYI: this does NOT apply to your mileage driving to a paid rehearsal or performance, or driving from your home to the studio you teach at).
Did you print any business cards, flyers to promote a show, resumes or headshots? You can also write off casting services such as DancePlug or Actors Access, and any sort of website maintenance, domain registration and web hosting fees.
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Perhaps you purchased costumes, shoes, or makeup to wear in a performance. Any sort of costume maintenance, such as dry cleaning or laundry costs, are deductible. Just make sure not to include anything that you wear on the street.
Did you revamp your production of the Nutcracker? Set materials and props are eligible for a tax write off. If you purchased any sort of equipment such as barres, pilates reformers or other workout equipment for your business, mark it down too!!
Got some new music for teaching? Had to buy backing tracks or sheet music for auditions? Write off!!
Oh you’ll love this type of tax deduction: classes! As dance is your primary method of work, this falls under the category of “Professional Development.” This includes any sort of workshops or seminars you attended, provided it’s related to your dance career. If you are a subscriber to our online tutorials, you can write off those costs too! Thanks DancePlug!
If your agent or manager’s fee came out of your paycheck, that can be written off. You can also deduct any dues that you paid to your union (i.e. SAG-AFTRA).
If you conduct business out of your home, a portion of your rent may be eligible for tax deduction. Make sure to get properly informed if you qualify. Any rented studio or theater space are tax deductible.
You are most likely using your phone and internet for business purposes. You can deduct that portion. It is recommended to get an itemized phone bill, highlight your business calls, sum them up, then calculate the percentage used for business. An easier, but less accurate, way to calculate would be to track your phone usage for a month, and multiply that number by 12! As for your internet usage, give your best estimate (maybe 25%?) but be prepared to defend that choice.
Did you give a gift to a colleague, boss, or other person you work with? You can write off up to $25 of the cost of the gift per person!
Some of your business related meals may be partially or fully deductible, depending on who was there and the purpose of the gathering. For instance, treating your dancers to a post-performance meal may be partially deductible, while a studio-wide Christmas party would be fully deductible.
Do you pay for your own health insurance? Being self-employed, you may be eligible to deduct up to 100% of your insurance premiums. It’s worth looking into!
One last thing - make sure you can provide PROOF that all the items you are writing off were for business purposes. Keep itemized bank statements or receipts, and use software like Quickbooks to stay organized.
Even though taxes aren’t a super fun way to spend your time, the above tips can make your final total a little less startling. Remember, taxes can be quite complicated, and the law changes. We are NOT experts and highly recommend you refer to the IRS website or consult a tax professional.