How to File a Schedule C as a Part Time Artist
Whether you are a part-time or a full-time artist, you will need to report any earnings from your art. By keeping good records and operating in a businesslike manner, you can deduct your expenses and even receive a tax deduction for your losses (within limits). Better yet, if you establish good record-keeping skills now, it will be old hat by the time you become a full-time world famous artist. In addition, business habits such as investing in high-quality equipment will help you to become a better artist.
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Instructions
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Keep good records. Maintain receipts for all of the supplies that you use in your art including paint, canvas, notebooks, pens, clay and tools.
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Create a mileage log for any travel to shows or conferences. Travel expenses such as hotel rooms and meals are also deductible.
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Keep track of advertising expenses. This category also includes items such as business cards, displays and banners for shows.
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Take classes and attend seminars--they're deductible. Even books and magazines related to your art can be considered deductible.
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Invest in accounting software such as QuickBooks, or at the very least, keep a written journal to record all of your earnings and expenses.
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Consider a home office deduction if you have a dedicated home studio. This deduction can be a lot of work for not much gain, but it is worth estimating once.
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Record all information on the appropriate lines of the Schedule C (see Resources) and then transfer the total to your Form 1040.
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Tips & Warnings
If you hate doing your own taxes, hire a tax professional. While she counts up receipts, you can be at the studio creating more art to sell.
The IRS will consider your artistic endeavors to be a hobby instead of a business, if you do not manage to earn a profit for three out of the last five years. In that case, you will need to deduct expenses as part of your itemized deductions on Schedule A.
