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A good percentage of the millennia are into freelancing because of the flexibility it gives as to planning one’s life with work. It makes it possible to work from the comfort of your home or even in a relaxation center. You do not have to rush out of your house to get your daily tasks done as a freelancer; all you have to do is plan your schedule efficiently.

As an independent contractor artist, you should know how the IRS views your artist's business. This is to make you understand your freelance artist taxes responsibilities as it pertains to the IRS, its standards, and expectations.

There is a tax code as it pertains to art from the IRS, so it will be a great mistake to compare how IRS sees other taxes with the way it considers the freelance artist taxes. The IRS has audited many artists because the tax professional they hired applied general tax laws to their business. It is best as an artist to ask your fellow artists, local organizations for Arts, non-profit organizations and so on for tax professionals that understand artist taxes.

It is essential to contact your state and country and, if possible, local government to understand the task conditions of the authorities ruling there. As a visual artist, you are considered self-employed; the implication of this is that both your individual and work/business task is viewed as the same with no legal separation.

1. Documents filed for freelance artist for taxes

As an artist, you file the following documents or forms:

  • Schedule C of Form 1040 for art income tax
  • You can also submit Form 8829 if you have a home office (studio)
  • Schedule SE for your self-employment tax and federal income tax
  • You will be required to pay your estimated freelance artist taxes quarterly using Form 1040-ES, especially when your federal tax liability is more than $1000 per year

2. Art practice: business or hobby?

IRS considers art practice as a hobby or business for tax deductions. Artists too, have financial losses when their overhead exceeds the profit they get from the sale of their artwork. Your artwork is considered a hobby if you occasionally earn income from it, and tax deductions are not allowed for this category.

You can only claim deductions on your freelance artist taxes if you market your work solely for profit and earn income as a business. These deductibles also have a limitation; they can only be deducted as long as they exceed 2% of the adjusted gross income. This is as at the time of writing this; these deductibles are considered miscellaneous and itemized under Schedule A.

Freelance Artist Taxes
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The following are the nine criteria outlined by the IRS to determine if your activity is a business or hobby:

  • Whether you expect to make a profit in the future from the assets used in its activity.
  • Whether your activity makes a profit and how much profit comes in.
  • Whether you have made a profit in a similar activity in the past.
  • Whether you are knowledgeable enough to carry on the business and make it successful.
  • Whether you improve your processes to improve profitability.
  • Whether your losses are normal during start-up or due to circumstances that are beyond your control.
  • Whether the income from the activity is what you depend on for your livelihood.
  • Whether you put in effort and time to make it more profitable.
  • Whether you structure your activity in a business-related way.

As long as you are making a profit or you made a profit for some time in the activity, it is considered a business, and such will not be accepted as a hobby by the IRS. You should start keeping track of your documents so that you can file and pay your freelance artist taxes as you make legal tax deductions.

Looking for something different? Check out our resources on freelance designer taxes and freelance writer taxes.


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