THE REALITIES of business sometimes get in the way of our artistic pursuits. Because we earn money from our work, reporting income to the government is something that has to be done. That’s why this is my busiest time of year for tax tip questions; but I’m afraid it’s also the worst time of year to try and implement tax strategies. The truth is that most of your real tax planning for 2010 should have been done long ago. Still, there are at least seven steps that you can use to improve your 2010 taxes – strategies that should help you keep more money in your pocket.
Some people have tax documents in a neat stack, ready to be organized. These aren’t usually artists like us! But hopefully you at least have a general idea where to locate 1099’s, W2’s and other documents so you can quickly hand them off to your tax professional or input them into your tax accounting software program. Since it’s too late to improve the numbers that are on those documents, it’s now a matter of arranging the puzzle of numbers in a way that decreases your tax bite most dramatically. (Once you use these seven tax tips don’t forget to seek out advance strategies to make your 2011 tax bite smaller.)
For now, let’s focus on arranging this year’s numbers as effectively as possible for your tax return. Before we start, I’d like to warn you that a true tax professional is invaluable! There’s nothing I can say here that will apply specifically to your situation. Consider hiring a company or individual that has direct experience working with other artists. They should have the most current information regarding the allowable deductions for your particular business.
