Taxes for Artists: Does It Have to Be This Dreadful?

Sunlight Tax

Here’s the confusion: You keep hearing that the IRS requires you to keep receipts and documentation for all of your business expenses. So why is your accountant annoyed when you try to hand her your receipts?

Tax season can be super stressful. Most people, despite their intentions, don’t get their tax documents organized until a few weeks before the tax deadline, so your tax accountant has a drinking-out-of-a-firehose situation from about March 1-April 15. A lot of inexperienced taxpayers with freelance income don’t realize that they have a fairly big job to do before they can get their taxes done - that is, they need to do their bookkeeping. They need to tally up their receipts and income, and put it into some basic expense categories. Here’s a beautiful chart to help you with that. If that’s intimidating to you, hiring a bookkeeper is a great idea. Your bookkeeper can help you put things in the right categories, teach you how to maintain your own books, answer your questions and set you up with a system that works well for you. A good bookkeeper is worth the money.

Keeping your books is a requirement if you run a business. And if you’re a freelancer of any kind, though you might not have realized it, you are running a business. 

So, showing your accountant your receipts says that you haven’t done your bookkeeping, that you probably don’t realize that you have a sizeable job ahead of you, and that you probably need some coaching about the basic tax rules.

This is totally understandable. You’re just a bespoke latex dog-costume designer, not an accountant! This might even be your first year freelancing. But your accountant is facing an immovable deadline with an obscene flood of work. So if she’s not keeping up with her loving-kindness meditation, she might get grumpy with you. As a person who was new at my arts practice once, and as a tax accountant, I’m advocating for understanding in both directions here.

My tip for the new year: Develop a practice of good bookkeeping this year and/or hire a bookkeeper. Your 2021-self, and your tax accountant will thank you.

DISCLAIMER: True tax advice is a two-way conversation, and your accountant needs to hear your full situation to apply the rules correctly in your case. This post is meant for general information only. Please don’t act on this alone.

Hannah Cole is an artist, speaker, and tax professional empowering thousands of creative people with workshops, online courses and Money Bootcamp. She is the founder of Sunlight Tax. Follow her on Instagram @hannah.cole.painter and check out her website Sunlight Tax at www.sunlighttax.com.