Art Taxes

I did my art business-related taxes on my own this year. It wasn’t as bad as I thought it might be. The key is to keep good records throughout the year. Here’s a quick list of some things I’ve learned when filling out a Schedule C. For every art transaction you make, into your coffers or out, record the following:

  • Category of expense – i.e. travel, supplies, marketing, merchandise
  • Gross profit (or expenditure)
  • After-sales-tax profit (this is what you record as profit – sales tax is a transaction directly between buyer and state or locale; you’re just the facilitator)
  • Any commission fees
  • Any miscellaneous fees (Paypal fees are included in this category, as is convention attendance and art show hanging fees)
  • E-Marketing (website etc.)
  • Paper Marketing (business cards, flyers, etc.)
  • Travel expenses (airfare/hotel are in the “travel” section and mileage/parking are in the “automobile” section)
  • Shipping/postage fees
  • Where the sale was made (i.e. at a convention or on the internet)

Also, keep all your receipts. Paper, too. When the contents my hard drive were lost last December, I lost all my e-records for the year. I hadn’t backed up in a few months, so I had to reconstruct several months’ worth of profit and loss from Paypal records and paper receipts. KEEP THE PAPER.

You may not need all this info for every transaction, but it’s a great idea to make a habit of recording it all. That way you know exactly what you did on March 2nd of last year even though you can’t remember it for the life of you. Your wallet will thank you.

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