Tax season is upon us, which can be a source of stress for people in any field. For playwrights, who are often hired as independent contractors, or whose income can come from a variety of places, it can be especially complicated. In this article, four professional playwrights share their advice for tax season as a professional writer. (We love this helpful advice, and just add the disclaimer that we are a playwright support organization, not a tax organization; always check with your tax consultant before filing.)
Dominic Orlando (Affiliated Writer):
My advice is simple: get an accountant. It’s worth it. It saves you time and, ultimate, money, especially if you’re 100% freelance.
Carson Kreitzer (Core Writer):
Artists’ taxes are different, and often very complicated. From my accountant, I pass on these useful bits of advice:
Keep a spreadsheet of everything for which you’re supposed to get paid. Write it down when the check comes in. That way, you can easily look up whether or not you’ve been paid for something, and not wonder, “Hey, did that theater company ever send me that check or not?” Also, at tax time, you can use that spreadsheet to check against your sometimes mysterious 1099’s. I have had errors in 1099’s several times, and once got 1099’d and W-2’d for the same income. Make sure everything makes sense; don’t just trust that it must be true if it’s on a 1099.
And if most of your income is in 1099’s, pay quarterly. It just makes it much less of a painful ordeal to write that big check at tax time. You might even get something back!
Deborah Yarchun (Jerome Fellow):
If you can show income from your writing or you expect to in the next few years, you can declare yourself as a sole proprietor and save receipts for any expenses related to your writing. This includes theater tickets, submission expenses (mailing expenses, submission fees, paper for printing scripts), travel expenses, your coffee when you worked at coffee shops, and any meals you had while meeting with directors or actors or lit managers (you can deduct 50% of meals and coffee as a business expense). When you traveled for your playwriting, instead of deducting for meal expenses, it’s often better to take the standard per diem. You can look up what the per diem rate is for each city you visited at this link.
Steve Moulds (Jerome Fellow):
I’m someone who loves filing his own taxes. I know this is not for everyone, and there are definitely areas of the tax code that I haven’t ventured into because they don’t apply to me. That disclaimer aside, here are my three interrelated tax tips for playwrights:
- Even if you don’t do your own taxes, take the time to go through Form 1040, Schedule C (Profit or Loss from Business) and read the instructions yourself. We are each our own business, and Schedule C teaches you so much about what counts as a business expense, what doesn’t, and how much it all counts for. If you do this even once, you will carry that knowledge with you all year—and when an expense pops up that you can claim, your Spidey sense will kick into gear. Which leads to:
- Keep track of expenses throughout the year. It is easier to keep a running list than it is to do it all in one marathon session in April. And don’t just hold onto receipts—write what they’re for at the top of the receipt the second it enters your hands. That way you never have to ask yourself, “Who was I eating lunch with on May 13th?” Also, the IRS asks that you put your business expenses into different categories, some of which carry different rules, so it’s not like you can just add up all your receipts and put one number in one box on your 1040.
- Finally, don’t make numbers up. You may have an intuitive sense that you spent approximately $100 on photocopies, but the government would like actual figures, please. Perhaps your copy-machine estimate is stunningly close, but you’re much more likely to have spent something like $102.63 than an even $100. Conveniently round numbers are an invitation to audit you.