If you are a performing artist, such as an actor, dancer or musician, you may receive Form W-2, Wage and Tax Statement, for income you earn as an employee.
Payments that you receive from someone who is not your employer (for example, payments for freelance work) may be considered income from self-employment and reportable on Schedule C, Profit or Loss from Business. If you are self-employed, you may receive Form 1099-MISC, Miscellaneous Income, showing amounts you were paid. If you are self-employed and your net earnings are $400 or more, you must file a tax return and pay self-employment tax on the income you report on Schedule C. In addition, you may need to make estimated payments to cover the amount of self-employment tax or income tax associated with the income you report on Schedule C.
Unreimbursed, work-related expenses may be claimed as miscellaneous itemized deductions on Schedule A, Itemized Deductions. If they are attributable to being self-employed, they may be deductible on Schedule C. You should keep receipts to substantiate your expenses. Examples of some of the work-related items you may be able to deduct include:
Taxpayers in the entertainment industry may incur expenses to maintain an image. These expenses are frequently related to their physical appearance, such as expenses for clothing, make up, hair care, and physical fitness. These expenses are generally found to be personal because the inherently personal nature of the expense and the personal benefit are considered to far outweigh any potential business benefit. No deduction is allowed for expenses for clothing, general make up, hair care, or physical fitness to maintain an image.
You may be able to reduce your taxes by deducting unreimbursed, work-related expenses. As an employee, you may qualify to deduct your work expenses as a dollar-for-dollar adjustment to income, instead of as 2% limited miscellaneous itemized deductions, like most other types of employees. To qualify, you must meet all of the following requirements: