While some of these items may be totally deductible (your union dues and initiation, for example), others (such as your phone bill) are partially deductible depending on how much of the expense/use is business-related. Once again, what those portions may be depend on your facts and circumstances.
Also, certain items, such as television sets, typewriters, etc., may be wholly deductible in one year or they may have to be "capitalized" over a period of years - that is, a portion of the expense will be deductible each year, say, for seven years. ("Capitalizing" may ultimately prove more beneficial to you anyway.)
Also, for performers there are special rules involving "above the line" versus "below the line" deductions that are simply too complicated to go into here. Your CPA can explain this to you.
Finally, all deductions are applicable only to the extent that the cost exceeds any reimbursements, and certain expenses may only be 80 percent deductible.
- Admissions to plays and movies: Save your ticket stubs.
- Attorneys/legal fees: Only if the work pertains to your acting career.
- Auto expenses: First, you'll need to estimate how much you use your car for business purposes. An example: You're going out to make the rounds of studios. The drive to the first stop is not tax-deductible - that's part of your "normal commute." However, each stop after that is business use and therefore deductible, until the last stop. From the last stop to home is not deductible - again, it is part of your commute.
1. The mileage method: If you've got an older car, this is generally the best "tax break" way. Estimate the number of business miles you put on the car and multiply that figure times whatever the IRS is allowing for business miles that year. That's your deduction. (The IRS will not ask for receipts.)
2. The usage method: If you have a newer car, this may be more beneficial than using the mileage method. Along with your daily dairy, keep receipts for everything - gas receipts, repair bills, insurance payments, etc. Add those receipts together and, using your daily diary, estimate the percentage of business use you put on the car. Take that percentage of your bills - that's your deduction.
- Books: As long as they pertain to the industry. War and Peace, no; Your Film Acting Career, yes.
- Business gifts: AD gifts to agents, personal managers, etc., up to $25 per person per year.
- Business meals: This can be a picky area with the IRS. You'll need the receipt for the meal, a record of who was there, how that person or persons relate to your position in the industry, and, basically, what you talked about. Your daily diary can be worth its weight in gold here. If the meal was under $25, you don't have to have a receipt, but the IRS still will want to know why you deducted it. Be sure you can explain each and every deduction. (These expenses may only be 80 percent deductible.)
- Classes: Once established as an actor, classes that maintain or improve your skills as a professional actor are generally deductible.
- Commissions: paid to agents, personal managers, etc.
- Hairstyling/haircuts: As long as it's directly related to a role.
- Industry parties: Probably the most difficult area to get the IRS to approve as a deduction. Not only do you need to be able to prove that the party had a direct bearing on your position in the industry, but you will have to keep a guest list and be able to explain how those guests have a direct bearing on your career. A very touchy area.
- Magazine and trade publications: Daily Variety, Hollywood Reporter, Drama-Logue, etc., and any others as long as at least a portion of the publication pertains to the industry. If you buy these on the newsstands, get receipts and attach them to your daily dairy. If you don't, an auditor could disallow these deductions.
- Mailing expenses: Stamps, envelopes, labels, etc.
- Makeup.
- Office supplies: Typewriter, staples, writing paper, etc.
- Phonograph records.
- Plays.
- Publicity materials: Anything that publicizes you as an actor. Presentation tapes, Academy Players Directory listing, postcards, ads in the trades, etc.
- Resumes: Typing, printing, and/or photocopying.
- Resume shots: Session and printing costs.
- Tapes.
- Telephone and related: Your telephone bill, depending on how much it's used for business. Also answering devices and answering services.
- Television and related: The set itself, repairs, cable or pay TV, VCRs, videotapes, TV Guide, or other television magazines.
- Union dues/initiations.
- Wardrobe: See hairstyling.
- Wardrobe maintenance: See hairstyling.
