Ask My Friends - Organizing Your Tax Portfolio

It is Ask My Friends again, and today is a great post. Something we should ALL pay attention too. I am the worst about this, and I think I could be missing out on saving money. Gary Castaneda and I worked together at Cedar Point several years ago, and he is one of the sweetest guys I know. He was asked back to teach workshops at Cedar Point, and one of his workshops when I was there was about Taxes. Gary has performed on cruise lines and toured the country with several productions (one of them Miss Saigon). With the year coming to an end soon, it is almost tax time and I thought it would be great to get tips on taxes so we as artist could save money. So I simply asked Gary to give us some tax tips.

"Doing taxes every year is about as much fun as having a colonoscopy. You can put it off as long as you can - but in the end you just have suck it up and get it where the sun doesn’t shine and move on to bigger and better things. Procrastination is a serious disease that can lead to the destruction of your economic health. I encourage you to face these tax fears & phobias head-on and get organized little by little. This is the key to make your April 15th Tax Day Deadline less painful so you can get out there and have more fun (or actually get a colonoscopy).

1. Invest in an Accordion File: This is a Tax-Time office supply staple. You can make fun decorative tabs where you can separate your receipts by category and include: Travel, Food, Make-up/Hair, Promotional Materials, Classes/Lessons, Equipment, Office Supplies, and Postage to name a few tab headings. Don’t go super-detailed or crazy. At the end of the year, add up the total, write it on an envelope and throw the receipts inside. This will prepare your line-item deductions for your tax preparer and they won’t kill you for handing them a shoebox full of random receipts.

2. Keep a Date Book/Journal: This is where you can list auditions attended, meetings with agents, casting directors, etc. You should be able to recall the circumstances for all your appointments to justify why you spent $40.00 to take out your vocal coach for drinks to get the inside scoop on an upcoming audition. You can also keep track of your mileage, out-of-town auditions & miscellaneous business expenses in this space as well. Furthermore, this “mini-scrapbook” is a great way to look back on your year to see your progress within your craft or to find out where you need more work.

3. Keep a File of Pay Stubs & Tax Forms from Employers: Most performers have several jobs within a year and keeping track of them is a task in itself. Hold on to all your Pay Stubs and use this as a checklist to ensure you have every tax form (W-2, 1099, etc.) from all your employers at the end of the year.

4. Find a Tax Preparer Experienced with the Arts: Theatre performers have special needs and it is essential to have a tax preparer you can trust and who can answer your questions in plain English. Asking friends for referrals or inquiring whom they employ to process their taxes is a great way to find a good candidate.

5. Safeguard your Information: Keep filed tax returns in a safe place for several years. It will help to have your last year’s tax return on hand to help with filing the following year’s paperwork (why invent the wheel twice). However, when you do decide to purge your mountain of paperwork (after the tax people say its okay) you should opt to shred the materials utilizing a paper shredder to safeguard your identity. It would really suck to find an identity bandit living it up in Mexico City on your dime.

Money is the easiest way to obtain the essential things in life: like food, shelter and tickets to see Patty Lupone in concert. Keeping it all straight and organized is one way to continue on the path of making it in a business where skins are tough, competition is high and the odds are never in your favor. However, keeping your eyes on some of the business essentials of money and finances will help extend your long and healthy performing arts careers. I wish you many “broken-legs” in your future!"