Tax Talk for Artists and Freelancers November 30th

This looks really useful! A lot of people in particular do not know the entangled world of sales tax!

November 30th, 6-8 PM

ArtWorks Creative Enterprise is pleased to host a talk by Rus Garofalo of Brass Taxes, here to take some of the uncertainty out of preparing for tax time.

"Brass Taxes helps freelancers, artists, and other nice people with their taxes.

This talk about taxes is to help people avoid 90% of the problems we see come in our door at Brass Taxes. Artists and freelancers have work lives that are more complicated and it can be hard to find the right answers to questions about taxes."

www.brasstaxes.com

This event is FREE and open to the public.

https://www.facebook.com/events/403612823181867/

Fascinating Article About Artists and Tax Revenue

The New York Times published an interesting article about how the Internal Revenue Service views artists and write offs and is called:

Tax Court Ruling is Seen as a Victory for Artists

Written by Randy Kennedy.

It starts:

"If you say you are an artist, but you make little money from selling your art, can your work be considered a profession in the eyes of the Internal Revenue Service?"

http://www.nytimes.com/2014/10/07/arts/design/tax-court-ruling-is-seen-as-a-victory-for-artists.html

Although we are not in the fine art world for the most part, many of us dabble and do gallery shows, etc.

I do not know any freelancer with a business plan, but they still make a living and that can vary wildly from year to year. You can kind of plan but there are a LOT of variables.

The upshot of the ruling is that you can make very little money and still be considered a professional artist.

Good Tax Advice for Illustrators

Scott Bakal wrote this great post about dealing with taxes and the inevitable letters of doom all of us get at some time or another.

It starts: "I received this letter a few weeks ago. Having a minor heart event and scraping myself up off the pavement after blacking out, I tried to wrap my head around what went wrong. I owe the IRS $36K"

http://www.drawger.com/scottbakal/?section=articles&article_id=14392

He has a lot of good advice for keeping records. It really is essential that you keep records of everything.

A couple additional notes:

• It is also good to get a tax ID for your business so you do not have to give out your SS# to every client.
• One thing not covered in the article is sales tax. You really need to look at the laws in whatever state you live in and they are always changing. In Ohio, some types of graphic design are also sales taxable as well as any art you sell to someone in the state. With so many artists showing and selling work at art and craft shows, a vendor's license is essential.
• The state you live in has information on doing business there. It is a good place to start when you are freelancing so that you are filing all the correct paperwork.
• Here is the website about doing business in Ohio: http://business.ohio.gov/ 
• Get an accountant that knows what he/she is doing.

 If anyone has any additional notes, I will update this post.

Darcy from Flaming Medusa Studios gave me this additional information from her husband David Van Horn. He is a CPA and does accounting etc for small businesses.

You can email him at dave@churdles.com or call him at (513) 429-5058.

Some more notes about doing business in Ohio:

"There are many taxes a small business must pay.  Those without employees must pay, depending on their legal structure, taxes on their earning to various government entities (Federal, State, City and sometimes even townships in Ohio). 

Once you add employees the burden really takes off.  In addition to the earnings tax for profit from the company you will be responsible for:

- Trust taxes for employee withholding's (Federal/state/local withholding, Social Security, Medicare)

- Also you will be responsible for the matching portion of Social Security and Medicare, State Unemployment taxes, Federal Unemployment taxes and any Workers Compensation premiums due.

The due dates vary and depending on the amount of payroll could be as frequent as weekly or as long as quarterly. 

Ohio also has a unique "privilege" tax called the Ohio Commercial Activities Tax.  This only applies to companies with over $150,000/year in revenues.  This tax replaced the Personal Property tax that Ohio used to charge."

Thanks Dave! I hope to do a future post about sales tax.