Year-End Tax Planning for Voice Over Talent

by | Business, Career Advice, General

Oh my! Time for year-end tax planning, again. Yes, this voice over talent does it annually.  BUT…April 15th is so far away, many may be thinking. Tax planning by the first week in December has become as much a tradition in my life as celebrating the holidays.

What prompted me to write about this is a couple of articles I found online, which address some of the things I’ll discuss here, but not all.

First, is a general list I found online:  Actors Hub of Tax deductions for acting expenses. This list is pretty good, but be mindful that the suggestions are coming from the UK, and include deductions applicable to film and on-camera acting. But voice over talent may find the list useful. I repeat, this list is what could be permissible in the UK, and may not translate within the United States tax laws.

Honorable mention goes to my friend Dave Courvosier,  who wrote this article on VoiceoverXtra . Dave covers a lot of general year-end planning in that article, and makes a lot of sense, so check it out.

Ease up on your Tax Liability

This post will focus on some moves you can make right now to ease your tax burden and save yourself some time and hard-earned money in the process.

First, if you’re a full-time voice actor, I trust you typically itemize your expenses on your taxes, along with filing  Schedules C and E. And that you keep tidy records of all income and expenses for your business in accounting software.  And your voice over company business is accounted for separately from general household. If you don’t do these things, you should. If you don’t, it will definitely take longer to compile your data, and you may be challenged to get it all together in time before year’s end. And you have a good CPA on your business management team, right? If not, get one, especially if you own real estate and stocks, vehicles or have anything complicated. They are worth it!

If you need to create your accounting records in a software solution, consider starting it fresh and new for 2015.

My big goal each year is to have a pretty clear picture, in advance what the tax situation will be when we file April 15.

What you can do now

I’ll  send this year’s data, let my CPA crunch the figures and let him advise me what I can do before this year is over to avoid paying more income tax than I legally am obligated to do.

1) Estimate gross household income by year’s end (pretty easy to figure at this point by looking at any receivables and adding them to gross earnings) list gross income by individual household member.

2) List any interest income from banks, CD’s etc.

3) Schedule C- Attach a Profit & Loss Statement for your voiceover business- Separate from your Family household’s.

4) Schedule C: it’s the heart of your business return where you’ll itemize business expenses.  What is deductible is right here from the horse’s lips, the IRS .Be sure to include the pro rata percentage amount of  “rent”  or mortgage payment for your studio space. For me, the studio and office comprise 18% of our total living space. In addition I’ll consider 18% of all shared household expenses with respect to Gas & Electric, trash, phone, internet, TV, and cleaning. If you own your home, take that percentage of property taxes as well.  If you drive to your studio or someone else’s, be sure to list total mileage!

5) Schedule E: This schedule is where you list your Capital Assets, such as computers, microphones, preamps, sound booth etc. that cost $500 or more. These go on to a depreciation schedule. List date purchased and cost. If you happen to sell some of that  equipment, you’ll need  list date sold or disposed of  for the cash basis.

Additional Moves

After all this, if you pay estimated taxes, list how much you paid each to State and Federal, and  your CPA may tell you to send another payment into the State before year’s end.

If you own stocks, is it time to sell some and take a loss for under-performers?

If you have an IRA, you may be also able to offset some tax liability by making a contribution.

This information is by no means meant to be comprehensive. Always remember, your individual situation may vary. Please talk to a professional. And please plan!

 

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