If I am an actor, can I claim my expenses and incomes as a business on my personal income taxes?

Question

I have gone to auditions and meetings that have cost about $5000. Since I am just beginning, I have had no income to offset these expenses. Since I am in the business of acting, can I claim a business loss on my tax return? Or do those expenses not count for anything as far as taxes go?

I do currenly have another job which provides income. I just have not had any acting income to date.

Answer 1

If you are in the business of being an actor, you can deduct your business expenses. But there are some things to look out for.

First, all of your expenses incurred in getting yourself ready to start your business need to be accumulated as start-up expenses. These are not deducted immediately; the are capitalized and deducted over five years. (Depending on the amounts involved, you may be able to deduct up to $5,000 of start-up costs immediately.)

Once you have openned your doors for business (I would say, once you started going on auditions), your expenses are deductible.

Here is the tricky part: if you business continues to show losses year after year, the IRS will tell you that your business is not a business, it is just a hobby. Not only will you not be able to deduct your future losses, but you will have to go back to amend any other years that you have claimed these expenses. (Even with a hobby, the expenses are deductible to the extent of your income--with additinal limits caused by the rules for itemizing deductions.)

You will claim your business income and expense on Schedule C. If you have a loss, it will reduce your taxable income. In some situations, if the loss is large enough to wipe out your income, you may even end up with a loss that you can carryover to other years.

So, do you expect to make income from this venture in the relatively near future?

I admit that I have a bias, but I think you should consider consulting with a tax expert.

Here are some links to the details on schedule C and hobby loss rules.

Answer 2

Generally, if you had no income from the activity, you cannot deduct these expenses in this situation. Some of these expenses are 'start up expenses' such as getting your portfolio ready.

What you can do, is complete Sch C with these expenses, and they will be offset to ZERO with a note indicating that the allowable expenses are being carried forward until you can use the expenses against actual income. Right now, this is a 'hobby' until you can prove that there is a profit motive by getting some work. Hobby losses are not deductible against ordinary income, but they can be saved up to be used against future profits.

I strongly advise you to seek professional help on this situation before you get into deep doodoo.

Tax Advisor

Answer 3

If you use your car for business purposes, you may be able to deduct some of your operating expenses or take the standard mileage rate. The cost of commuting between home and your work is not deductible.


If you travel on business, either in-town or out-of-town, and your employer does not reimburse your expenses, you may deduct many of them on your income tax return.


If you entertain a business associate at a restaurant, you can deduct 50% of the business-related meal. Be sure to keep the receipts and a record of the business purpose.


Your professional library can also be a source of tax deductions. Books, magazines and journals related to your field can be deducted.


The uniform your company requires you to wear may also be a deduction. If the uniform is not suitable for everyday wear, the cost of the uniform and the upkeep may be deductible.


Education expenses related to your work may also be deductible. Courses designed to help maintain your skills in your present job are generally deductible. Plus, the mileage from work to school, usually one way only, is deductible.


If you are looking for a job in your same field, expenses such as employment agency fees and resume preparation are deductible. So are the miles driving to and from the interview. The expenses for an out-of-town interview are deductible if you are paying for them.



Out-of-town conventions can also be deducted if not paid for by your company, so save receipts for your lodging and meals. If the convention was in town, your mileage to and from the convention location may be deductible.
http://www.expresstaxrefund.com/faq/050/employee-business-expense/

Answer 4

If you have made any income over $600, then you are to do a tax return, and claim a loss on your schedule C form, since you are self employed.
If you made no income at all, then you dont even file.

Answer 5

You will need to file with Schedule C. You have have to carry losses to future years. For more detail. read IRS instruction for Schedule C http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

It is true that if you had made less than the sum of the standard deduction of your filing status and personal exemption, then you are not required to file. For example, if you are single and made less than $8450 you are not required to file a federal return. However, if you want to be able to deduct your losses incurred this year in the future when you made money, you will have to file and report your losses this year.

Keep in mind if you report more than 2-3 years of business losses, IRS can "reclassify" your business to hobby. Then will no longer be able to claim business losses.

Best wishes.

Answer 6

just get yourself a computer program to do it, it will give you any and all options for tax credits and breaks imaginable.

It takes a while, because it will ask you hundreds of questions, but thats money in your pocket, and it will help you organize your taxes neatly so you're less likely to have an error and get audited.

I have used both turbo tax and h and r block, and I prefer turbo tax, most people do, but there are no serious problems with h and r block, it just doesn't work quite as smoothly.

make sure you get one that helps you file a schedule c, they cost a little more, but they are WELL worth it, haven't done my taxes on my own since I started using them.