Art and Taxes

Art, taxesIf there is one topic everyone dislikes (except CPA’s) it’s taxes.  It is one of those necessary evils in life and most artists disdain them.  You have to keep all of these receipts, none of which are the same size, and it is often best if they are separated into categories.  Then you need to have recorded some place your income, mileage, and other expenses, which translates into being ‘organized’.  Seriously, all I want to do is create art!  If your paperwork is not in order, either you or your tax preparer are not going to be happy, and if you are doing it yourself, the last thing you want is a letter from the IRS (Internal Revenue Service).

Since we are creatives, we also tend to not be the most organized folks around (I do know some who are very organized).  We don’t like having to keep up with paperwork, and we may even procrastinate a bit, which makes the situation even worse.  So are there any solutions out there, to help us get organized and not take up all of our time?  Yes, many people have created programs and spreadsheets to help in this area, although some are costly or may be more than you really need.  Fortunately a couple of years ago I happened to come across an article on artists and taxes by Robert Reed, PhD, CFP, in the magazine, Professional Artist (formerly Art Calendar).  He has done a wonderful series of articles on artists and their business, and he also has a website, www.YourArtIsYourBusiness.com.  There you will find a spreadsheet program for Excel he wrote called ‘ArtBooks’, and it is fantastic.  It is designed for artists specifically, although you could change the categories and use it for any business.  It is has pages for income, expenses, mileage, home studio, etc. and has formulas already written into it.  It also gives you a nice profit and loss statement so you can see the shape your business is in.

I decided to try it out and set aside an afternoon to set it up.  I downloaded it, looked it over, and dug out my receipts to get started.  I was amazed at how quickly I was able to get everything in and organized!  I even found out on my profit and loss statement that I was actually making a profit!  I have used ArtBooks for three years now, and my profits have gone up each year.  One factor for this is I am finally organized and am able to spend more time creating as opposed to digging for receipts and really not knowing where the money is going.  I usually enter the information once a week so I am always up to date.  When tax time comes around, I just print out the pages and give them to my tax preparer, who also loves ArtBooks as it also saves her time.

P. S. You can also like Your Art Is Your Business on Facebook.  I did not receive any sort of payment for this article, I am just trying to help fellow artists!  Happy painting!

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