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[STATUS] TAX SEASON 2019
6 years ago
Hello,
It's currently tax season, the time of year when I drop off the face of the internet for four months because I'm working 60+ hours per week at FirstJob.
This is your yearly reminder to file and your yearly notification that I will be on hiatus until April 16th (The 15th is a government holiday this year.) I still try to check in on FA on my phone, but will not be able to answer notes or do art.
If you made more than $400 (after expenses) in income from art, you must file a 1040 and you will owe Self Employment Tax. SE tax is calculated separately from income tax and cannot be eliminated with deductions or non-refundable credits. Your parents cannot claim your income on their return. You must file it yourself. If that income was in cash and you think it is untraceable, know that the amount that you earned can be calculated from the amount that you spent and the amounts that are in your bank account, and the burden of proof is on you once they've come up with something.
If you sold at a convention and paid sales that, first, that is not the same thing as income tax, and second, the government definitely knows you made that money, so please report it. Don't play dice with the IRS.
If you made retail sales within your state, you may owe sales tax to your state.
If you made retail sales outside of your state, you may owe sales tax to that state, but the convention probably took care of it.
If you made sales online, the buyer is supposed to pay use tax. You do not owe sales tax.
If you paid a contract worker more than $600 during the year to do labor associated with your business, you must issue a 1099MISC. If that person gets hit with an audit, you will be penalized for not issuing the appropriate document.
You cannot deduct the entire cost of a new computer for art. You must estimate business use percentage based on real numbers, like the number of hours per day that you work verses the total time that you use the computer. Also, you should probably capitalize it, but the de minimis threshold for Section 169 bonus is currently 100% up to $5000, so it probably won't make a different.
You can deduct the entire cost of a new tablet or art supplies, because they can't be used for any purpose except to make art. (Assuming you produce enough commissions that you could feasibly argue in court that your art is profit motivated.)
The standard mileage for 2018 is 54.5 cents. If you take this deduction, you cannot also deduct gas. Only the owner of the car may take the deduction. You cannot deduct commuter miles.
The simplified home office deduction is still $5/sqft up to 300 sqft.
Spotify, Netflix, or other entertainment is not a deductible business expense even if you use it while working.
As of 2018, entertainment expenses are no longer deductible, even if they were for client meetings.
The health insurance mandate is still in effect for 2018 returns due April 2019.
Extensions are an extension of time to file, not extension of time to pay. You must pay in the amount you think you owe, even if you don't file.
Artists! Make sure you pick up the new QBI deduction! You get a 20% deduction on all income from a trade or business (that is not the trade or business of being an employee) if you made less than $157k.
(This is verifiable general information, not tax advice. None of the above should be used for the purpose of tax evasion. Applies only to United States.)
It's currently tax season, the time of year when I drop off the face of the internet for four months because I'm working 60+ hours per week at FirstJob.
This is your yearly reminder to file and your yearly notification that I will be on hiatus until April 16th (The 15th is a government holiday this year.) I still try to check in on FA on my phone, but will not be able to answer notes or do art.
If you made more than $400 (after expenses) in income from art, you must file a 1040 and you will owe Self Employment Tax. SE tax is calculated separately from income tax and cannot be eliminated with deductions or non-refundable credits. Your parents cannot claim your income on their return. You must file it yourself. If that income was in cash and you think it is untraceable, know that the amount that you earned can be calculated from the amount that you spent and the amounts that are in your bank account, and the burden of proof is on you once they've come up with something.
If you sold at a convention and paid sales that, first, that is not the same thing as income tax, and second, the government definitely knows you made that money, so please report it. Don't play dice with the IRS.
If you made retail sales within your state, you may owe sales tax to your state.
If you made retail sales outside of your state, you may owe sales tax to that state, but the convention probably took care of it.
If you made sales online, the buyer is supposed to pay use tax. You do not owe sales tax.
If you paid a contract worker more than $600 during the year to do labor associated with your business, you must issue a 1099MISC. If that person gets hit with an audit, you will be penalized for not issuing the appropriate document.
You cannot deduct the entire cost of a new computer for art. You must estimate business use percentage based on real numbers, like the number of hours per day that you work verses the total time that you use the computer. Also, you should probably capitalize it, but the de minimis threshold for Section 169 bonus is currently 100% up to $5000, so it probably won't make a different.
You can deduct the entire cost of a new tablet or art supplies, because they can't be used for any purpose except to make art. (Assuming you produce enough commissions that you could feasibly argue in court that your art is profit motivated.)
The standard mileage for 2018 is 54.5 cents. If you take this deduction, you cannot also deduct gas. Only the owner of the car may take the deduction. You cannot deduct commuter miles.
The simplified home office deduction is still $5/sqft up to 300 sqft.
Spotify, Netflix, or other entertainment is not a deductible business expense even if you use it while working.
As of 2018, entertainment expenses are no longer deductible, even if they were for client meetings.
The health insurance mandate is still in effect for 2018 returns due April 2019.
Extensions are an extension of time to file, not extension of time to pay. You must pay in the amount you think you owe, even if you don't file.
Artists! Make sure you pick up the new QBI deduction! You get a 20% deduction on all income from a trade or business (that is not the trade or business of being an employee) if you made less than $157k.
(This is verifiable general information, not tax advice. None of the above should be used for the purpose of tax evasion. Applies only to United States.)
SilvaWolf
~silvawolf
Good info as usual, try not to work too hard!
