Modeling & Tax Season: To Write Off or Not To Write Off?
I know that tax season for the year already passed but I felt it was still okay to post about the topic of taxes and modeling since I figure it’s never too early to get info that could help people out when it comes time to file next year (and maybe even give you a jump start on organizing your receipts and other paperwork).
I’ve written a few articles on the subject (if you use the search tool on my blog and type in “taxes,” the posts will come up–make sure you select the “Amodelsdiary.blogspot.com” option and not “Web”) but this particular post is a bit more specific.
I want to talk about write offs, also referred to as “deductions.” You may or may not have heard this term before but it is a popular one–namely, with business owners, entrepreneurs and independent contractors.
So what exactly is a write off as it relates to doing taxes? According to the site TurboTax:
“Well, a write-off is any legitimate expense that can be deducted from your taxable income on your tax return. For many, this is the trickiest part of filing their income tax, particularly because there is a fine line between which expenses are deductible and which ones are not.”
The reason I highlighted the last sentence in red is precisely the reason I wanted to write this blog post. In previous posts I’ve done, I mentioned that models in particular likely shouldn’t consider the expenses related to their modeling career as write offs because in the event of being audited by the IRS, they would need to have sufficient proof that the products and services they spent money on were solely related to their modeling endeavors (it can be difficult to convince an IRS agent that only models get their nails done or buy cute dresses and heels).
I wanted to dive a bit deeper into this concept and clarify any statements I’ve made in those other posts. Technically, you can write off certain expenses dealing with modeling. BUT it’s something that each model does at his/her own risk. I say that because it is critical to keep in mind that not only do you have to meticulously keep track of all receipts, records and other documentation dealing with those expenses, your income made from modeling also needs to justify the deductions.
A few examples of write offs that professional models include when it comes time to file taxes include but are not limited to:
- Makeup Products
- Skincare/Hair Care Products
- Body/Health & Wellness Treatments
- Gas/Mileage for Transportation
- Marketing Materials (business cards, website maintenance costs, casting services that cost money, etc.)
What’s the big deal about write offs? Being able to deduct certain expenses typically means the ability to reduce your taxable income. What does that mean? It means you tend to pay less in taxes to the government. In some cases, you might even get a refund instead of owing money. Who wouldn’t want a piece of that action?
So how can you do write offs for your taxes and stay in Uncle Sam’s good graces?
ONLY DO WRITE OFFS IF YOU ARE PROFESSIONALLY MODELING AKA “GETTING PAID”
If you’re an Instagram model, mostly post selfies or do a ton of various test shoots but do not earn an actual income from modeling, you might not want to take the chance of designating the items listed above as a tax write off.
However, if you’ve booked paid work throughout the year, traveled extensively for modeling assignments and basically are collecting checks from the work you book, then you have a solid professional standing that would allow for the items listed above to be considered a tax write off.
How much should your income be? There isn’t a magic number (the more money you earn, the better of course) but that leads me to the next point…
YOUR EXPENSES AREN’T MORE THAN YOUR EARNINGS FROM MODELING
One of the main ways Uncle Sam determines whether someone is operating as an entrepreneur/business or if they’re just doing something part-time for fun is whether or not they actually earn a profit or if they have more expenses than income.
For example, if you consider yourself a professional model and you’re doing write offs related to it, keep an eye on how much income you make compared to how much you’re spending on expenses for modeling. If you go on record too many years in a row with expenses that are more than the income you earn, the IRS will basically say, “That’s a hobby,” and won’t allow you to continue writing off those expenses.
I will say, however, that you are allowed to report a “loss” with modeling if you happen to have a low earning year. That’s okay because all businesses large and small, modeling as an independent contractor included, don’t always have a profitable year when it comes time to do taxes and declare income. But that’s why I stress that you need to keep close track of the numbers you’re spending and bringing in so that you can balance the two properly and avoid any penalties/fees.
YOU CAN PROVE YOU MODEL PROFESSIONALLY IN THE EVENT OF AN AUDIT
I don’t know what the odds are of getting audited by the IRS but in the event that you lose out and end up having the IRS examine your tax paperwork to make sure everything is on point, you better make sure you have sufficient evidence that the tax deductions you claimed are explicitly related to modeling as a professional career.
That doesn’t mean you need to be a supermodel for the feds to believe you but you should have plenty of ways to prove that you get paid for what you do and generate credible results. That includes pay check stubs, bank statements and other similar financial records, as well as actual evidence like tearsheets (hard copy and digital), a website, resume, contracts, model release forms–anything that shows the IRS that yes, you are a professional model who gets paid for your services.
If your presence online is non-existent or only contains social media profiles with some photoshoots but nothing more substantial like published work or photos from shows and assignments for clients or your agency, it could cast doubt and the feds might not consider your write offs as legitimate.
I am not–I repeat–am NOT a tax professional. I live and work in California and have a CPA who I’ve worked with for several years and I sit with her each tax season and meticulously go through everything so the information I’ve written about above is for general informative purposes based on my own experiences and research.
The details and exceptions will likely vary from state to state. If you are under the age of 18 in the US, your parents will be the ones responsible for this part of the process (lucky you!). It is your responsibility to make sure you understand what you’re doing if you file your own taxes or place your trust in a certified and reputable tax professional who has experience dealing with independent contractors and small businesses.
In case you’re curious about the things I write off for my own modeling career, here ya go: skincare items, makeup/cosmetics, salon appointments (waxing and manicure/pedicure services), wardrobe/shoes/accessories I specifically wear for shoots and castings, hair care services, casting website membership costs, business cards/comp card printing services, website maintenance costs, mileage for all the driving I do to castings and bookings and airfare/rental car/hotel costs related to work travels.
It’s a lot, right? Well, I have been doing this for a looong time and I have super OCD organized documentation (spreadsheets!) and receipts for everything I buy. Additionally, a Google search easily turns up plenty of proof that I do modeling at a professional level and earn income as a result.
Newbies just starting out may not be in a position to do tax write offs just yet but once you start earning money from paid bookings and keep at it consistently enough to see a profit, you will eventually be able to benefit from choosing which expenses can help you out in the long run come tax time where write offs are concerned.
If you have any specifics questions or concerns, you’d be better off asking a tax professional instead of me since I can only provide general info but hopefully this post will get you on the right track and thinking seriously about what it takes to get your taxes filed effectively if you are fortunate enough to earn a decent profit from modeling.
Source: Modeling 101 – A Model’s Diary