Can I Claim Art Supplies as School Supplies on Taxes

Here's a list of business organisation expenses which can normally be claimed for tax purposes by an artist who is making a serious try to sell art and brand money.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

To be able to merits expenses and a self-employed status you must be conducting your business in a professional person way and with the intention of making a profit.

In other words you lot must be able to show it's not simply a hobby. The tax government volition non let y'all to make countless losses which fund your hobby as an amateur artist.

Also - yous do need to accept

• registered as cocky-employed to claim expenses
• produced accounts.

Allowable Business organization Expenses for Artists

Full general principles

The full general principal which applies to artists is you can claim items which yous need to make and sell fine art - for a profit.

Thus y'all can claim for items which are:

• directly and wholly related to making art
• generally accepted as normal and used by many artists when making art
• not disproportionately excessive or extravagant.

Below I've included notes about normal business concern expenses

Exercise delight annotate and suggest anything else you recall should be included.  I'll update this postal service with good suggestions - and requite credit and a link to your blog.

Tax in the Great britain

In the  NEXT tax year (2013-fourteen) in the U.k., HMRC are introducing a new scheme called Simpler Income Taxation for the Simplest Pocket-sized Businesses.  It greatly simplifies the methods of accounting to be used for very elementary small business - such as being an artist.

It defines payments as follows

allowable payments are expenses paid wholly and exclusively for the purposes of the trade, including for non-durable avails and payments of VAT (but excluding business organisation entertaining and purchase of property or other "investment" avails. It will no longer be necessary to summate and claim upper-case letter allowances.

I'll write more nigh this - simply it'south certainly a very attractive way of bookkeeping for tax for many artists.

Art Supplies

In general you can merits the materials used in making art.  All the same this is non an alibi to striking the art supplies shops and order all the things you've always wanted to own.  Expenditure needs to be proportionate to sales.

In broad terms you should only merits the price of stock used during the year to make art and achieve sales.

Fine art Competitions / Juried Exhibitions

You can claim:

• entry fees
• hanging fees
• commission on sales

Computers and printers (and other expensive part equipment)

These are a business expense - but how they that expense should be treated for tax purposes volition very much depend on what revenue enhancement regime yous take to live with.

In the UK, there has been a bulldoze to make life simpler for people.

Exhibitions

Rental of spaces for exhibitions is an allowable expense. The expectation will be that you make sales as a result so I wouldn't try this one likewise oft if your sales don't cover costs.

Framing

Framing is an interesting ane.  Frames are expensive - and you don't want to have too many lying effectually unused! I guess nearly artists have reused frames and swopped them round given how expensive they are.

My recommendation would be to

• avoid paying out for too many unused frames.
• prefer the practice of claiming the price of the frame when you make a sale.

If you take them for personal use then you should 'pay' for them and credit your business organisation with the income.  That then neutralises the expenditure in the accounts.

If selling direct, you can suit to accept a picture framed to the client's requirements and charge the full cost direct to the customer - which has a completely neutral effect on your accounts.

Framing for a solo exhibition at a gallery tin be an enormous cost. If having solo exhibitions periodically, it's probably worth investigating the practice of averaging costs across a period of years then you don't go all the income and expenses cropping up in ane yr.

Insurance

Insurance of art in an exhibition and in transit is a business expense.  You need tertiary party cover if you're teaching.  See Insurance for Art and Artists

Marketing Expenses

The cost of business concern cards, flyers, posters, advertisements etc are normal concern expenses.

Photography

Professional photography fees relating to photographing artwork for catalogues, books etc is a business expense.

Exist careful most cameras. If you have a camera which y'all only bought for reference photos and normal photography associated with putting piece of work online for sale and then this is a business concern expense. However if a photographic camera is used mainly for domestic/personal purposes and but occasionally for art so this probably brackets it in the "hobby" category and it's not eligible as an expense.

Lookout man the price of the camera. Expensive cameras probably need to be treated like expensive items of equipment and categorised every bit capital and hence claimed against tax over time based on whatever is the regime for capital allowances.

Postage, Shipping & Couriers

The expense of getting artwork to a client or to an exhibition is a concern expense.

Professional person Education

Continuing professional development is a normal concern expense. Information technology's worth checking with your local taxation people what is and is non allowed.  For example membership of a professional clan is normally allowed - with the emphasis on "professional person".

Studio

If you're renting a studio so the rent and any running costs are obvious business expenses.

However you tin can also merits if you are working from a home studio.  What you can claim depends on your local revenue enhancement regime and these represent variations on a theme

• You tin claim a reasonable corporeality for occupying a space for business organisation purposes. You demand to prorata things like utility bills if the studio is within the home.  You lot tin can't merits a rent if you don't pay one. Keep all the paperwork for your calculations in case you get an audit.
• Some taxation regimes insist that the room must exist dedicated as a studio. Nevertheless, if that'south the case do be careful that y'all're not causing any problems with planning permission - past having a commercial activeness within a domestic home - and/or creating a potential future problem with capital gains tax (if applicative) when you come to sell with respect to the part of your belongings which you utilize as a dedicated studio.
• The new Great britain tax regime for small-scale businesses means there will be NEW defined rules every bit to what will exist allowed as business concern expenses.

Use of domicile for business organisation purposes
9. Businesses that apply the habitation for business purposes tin can opt to use a standard deduction based on the amount of fourth dimension spent working at home.
10. This calculation is set out in section 94J and is as follows:
xi.Number of hours worked at home per month 10 applicable amount
12.The applicable amounts are equally follows:

• 25-l hours per month £10
• 51-100 hours per month £18
• 101 hours or more per month £26

13.Alternatively businesses tin choose to claim whatever commanded portion of bodily expenses.

Phone / Broadband

Having a separate line for concern calls and your broadband simplifies profoundly the issue of what the split up should be for domestic and business.  It also means you go to have a dedicated answerphone message which sounds rather more business-like.

All phone and broadband equipment (e.1000. phones / answering machine / modem) generally comes within the remit of equipment which can be written off in ane year - but this is something which can vary between tax regimes so do check before assuming information technology can become down as an expense equally opposed to an detail which needs to be depreciated.

Travel

Artists travel for a diversity of purposes and all journeys which are necessitated by art (business organisation) activeness are legitimate business organization expenses.

• plein air painting / collecting reference material
• marketing your fine art
• getting artwork to and from exhibitions / clients / galleries
• collecting art supplies

Check your local regime to see what'due south allowed. Normal public send expenses are allowed. There's ordinarily a mileage rate for cars.

Tax Tips for Artists

Following on from yesterday's postal service and the one last year, I've started a website calledTax Tips for Artists.  It's a work in progress at the moment.  Do permit me know if you lot know an article worth sharing with others.

williamsforgon.blogspot.com

Source: https://makingamark.blogspot.com/2014/01/artists-business-expenses-for-tax.html