Luck - Preparation Meets Opportunity
by Kevin Urban
Happy St. Patty's Day! As I started to contemplate this newsletter and the day that it would be sent out, I began to think of all things green…bagels…. cookies…. shamrock shakes ,…. And then I thought of the "Luck of the Irish" and that brought me to my recent meeting with my accountant.
I was confident for my tax return meeting. Had all my paperwork, money set aside, etc. I was not going to have to pay the IRS. But, when my accountant told me that I would owe between $2,000 and $5,000, I definitely didn't feel the luck of the Irish on my side. My life flashed before my eyes…well at least the thought of a new MAC I now couldn't afford. I thought to myself what could I have done differently…how could this have happened….and most importantly, what can you do to prepare for next year?
Have an account strictly for taxes.
Always put 30% of 1099 income aside for the taxman. It's easy to see one lump some and think I'll just keep this and worry about taxes later. As actors, we tend to have a lot of 1099 income and we are responsible for the taxes associated with it.
Use Quicken or Quickbooks.
I used both last year for my personal taxes and for my business. I suggest starting with Quicken. Its great once you get it set up! By setting up tax categories in quicken and using mostly my debit card and credit card, I was able to download most of my expenses into quickens tax categories. (ie. staples goes into business expenses, classes go under classes, etc.) At the end of the year quicken added up all of my expenses. I added up all of my cash receipts, which I keep separately within their subdivided pockets (See the Tip of the Month below!) and added them to the Quicken totals. Very easy!
Organize Your Receipts.
Use a 13 pocket folder with the following categories. All of your receipts can be placed in here and added up at the end of the year. (I separate between cash and credit receipts because I use my debit card to purchase most things business related. I can import that.)
- Advertising- Headshots, resume paper, postage, postcards, business cards, website, etc.
- Office Supplies - Resume paper, printer ink, pens, staples, binders, sheet protectors, etc.
- Classes & Lessons -EVERYTHING!
- Scripts, Scores, Books, CD's, DVD's - EVERYTHING!
- Costumes & Make-Up - Tricky category but you are allowed some deductions.
- Union Dues & Agent Commissions - Yeah!
- Professional research - Movie tickets, Theatre tickets, Cable TV, Backstage, Variety, etc.
- Business Gifts & Meetings -Coffee with your friends at Starbucks where you discussed how fabulous your audition was, holiday gifts for your agent, etc.
- Transportation -Monthly metrocard and every cab ride to and from auditions.
- Equipment - Computer, cell phone, PDA, pitch pipe, software, etc.
- Phone - Cell phone, service, or god forbid beeper.
- Out of Town - You are allowed a certain amount of deductible per day!
Go Green…and download
I'm set up to receive my accounts online, as part of my commitment to green. NOTE: Make sure you download your statements each month. Some banks don't keep their statements available past a year.
