The tax season is getting close, and as a model, it can be very confusing about what you can or cannot get a write-off for. What can be considered a business expense in your line of work?
Can you be considered a regular self-employed person and opt for tax write-offs? Can you deduct the cost of the items or other expenses related to your industry? Read on and find out which parts of your income get a return on tax.
Note: if you are a model that would like to have an app organize all your deductions for you, then try Bonsai Tax. Our software will organize your receipts from your bank/credit card statements, discover potential tax write-offs and maximize your deductions. The majority of users save, on average, $5,600 from their tax bill. Claim your 14-day free trial here.
Yes, models also get taxed. After all, they are providing a service, for which they get paid afterward. The job is within the realms of self-employment, so you will have a tax write to deal with.
Aside from paying regular taxes, models can also claim tax deductions. Similar to every other business, models can also incur business-related expenses that are required for them to perform their job.
If you have expenses that could not be avoided during your modeling career and that were considered necessary, then you may write them off. The condition is that they must be for work in particular and should not be used for personal reasons.
Since you are a professional working for yourself, you might claim your expenses by using the freelancer tax form Schedule SE, Form 1040 with the IRS. This form is used when handing self-employment taxes, so it is also what you need in order to get your tax rights.
As a model, you have various expenses that are considered tax-deductible. Here is what you may usually write off as a model.
As a model, you may feel like you are spending the majority of your time in a vehicle, moving from one place to another. You have castings to attend, bookings to respect, and these may not always be close to where you usually conduct your business.
If you travel a lot for your work as a model, then you should know that these business-related travel expenses are tax-deductible. Make sure that you keep all the receipts for your transportation expenses, whether you are going by personal vehicle or Uber.
If your job takes you out of town and you have to deal with lodging and food expenses, then you may also consider claiming these expenses. Write-offs of this type may be claimed if you had to cover the costs yourself and your client did not cover them.
You can track your deductible miles with our free template.
Certain jobs may require a certain piece of clothing or a specific type of shoes. When the client provides them, then you don't have to worry about these expenses.
However, if you are required to wear certain pieces that the client does not offer, then you may get tax deductions for the clothing. If this is the case, make sure that you save the email where the piece is requested, and have the receipt on hand.
As a modeling professional, you'll probably have to spend a lot of your time on your phone, talking to your clients. When talking on your phone is necessary to conduct your business, you may claim the phone expenses from the IRS.
If you run a social media campaign or have to keep your website running in order to run your modeling business, then you should know these can also be deemed as tax write-offs.
A variety of things may be tax-deductible here. For instance, let's say you are a social media model influencer. If you have to pay for a photographer to take pictures of you to promote your account, those photos you take are considered to be influencer tax write offs.
If you have to take on modeling classes, you should know that they fall in the category of industry education expenses - therefore, they are tax-deductible. It's pretty much the same thing as receiving education or going to a business conference in order to train for your job.
A home office is a an often missed tax deductible expense. You should know that you can write-off your home office. You can claim the costs of Wi-Fi, insurance, rent, or bills for that particular side of the property, as long as you can prove it is exclusively used for business. There are two methods you can use to claim this tax write-off. The actual expense method and the Simplified method.
The Simplified method has you measure your designated office space you use as your "principal place of business" and "exclusively and regularly". Then you measure your office space and multiply it by the IRS's deduction rate i.e. in 2021, it was $5 a square foot with a maximum of 300 square foot. If you opt for the actual method, you'll need to track your expenses that were specific to your home office (use our free worksheet).
Read here for more information about claiming a home office reimbursement.
The modeling industry may also have a couple of red flags that the IRS may not grant you deductions for. In most cases, it depends on whether the expense is for personal use as well or not. You don't want to receive any penalties if you are audited by the IRS. Here are some things that fall in the grey area and may not get a tax return.
Yes, some pieces of shoes can be tax-deductible - but not all of them. As long as your purpose for buying them is related to your industry needs, you may try to claim the money. However, if you cannot prove that you actually need those items, then the IRS will see it as personal purchase.
You may think that getting a facial or a wax is necessary for your job, but these are also done on a regular basis - for personal purposes. You're going to have a hard time getting a tax return for these types of services.
Models would probably buy hair and makeup products on a daily basis anyway. It's going to be hard to convince the IRS that you wouldn't have spent that money on hair and makeup if you weren't a model. Under certain circumstances, haircuts are deductible expenses.
Plastic surgery can be written off from a model's taxes, but only if it is a medical necessity. For example, if a certain part of your face or body gets injured and your job depends on plastic surgery and your recovery, then you may deduct those expenses.
However, if plastic surgery is not necessary and is not a medical recommendation, it may not be deducted from your taxes. Procedures such as liposuction, facelifts, breast implants, and other surgeries aiming to enhance your appearance cannot be written off for tax.
As a modeling professional, you get income - which means you'll have to handle tax fees. Some expenses such as work phones or classes may be claimed, whereas other costs such as makeup products may not. It all depends on whether the services can be used for personal purposes or not.
This article is not meant to provide tax advice. We always recommend you contact a proper tax accountant or CPA for any tax-related tips/ advice on what purchases count as a deduction.
A verbal contract (formally called an oral contract) refers to an agreement between two parties that's made —you guessed it— verbally.
Formal contracts, like those between an employee and an employer, are typically written down. However, some professional transactions take place based on verbally agreed terms.
Freelancers are a good example of this. Often, freelancers will take on projects having agreed on the terms and payment via the phone, or an email. Unfortunately, sometimes clients don't pull through on their agreements, and hardworking freelancers can find themselves out of pocket and wondering whether a legal battle is worth all the hassle.
The main differences between written and oral contracts are that the former is signed and documented, whereas the latter is solely attributed to verbal communication.
Verbal contracts are a bit of a gray area for most people unfamiliar with contract law —which is most of us, right?— due to the fact that there's no physical evidence to support the claims made by the implemented parties.
For any contract (written or verbal) to be binding, there are four major elements which need to be in place. The crucial elements of a contract are as follows:
Therefore, an oral agreement has legal validity if all of these elements are present. However, verbal contracts can be difficult to enforce in a court of law. In the next section, we take a look at how oral agreements hold up in court.
Most business professionals are wary of entering into contracts orally because they can difficult to enforce in the face of the law.
If an oral contract is brought in front of a court of law, there is increased risk of one party (or both!) lying about the initial terms of the agreement. This is problematic for the court, as there's no unbiased way to conclude the case; often, this will result in the case being disregarded. Moreover, it can be difficult to outline contract defects if it's not in writing.
That being said, there are plenty of situations where enforceable contracts do not need to be written or spoken, they're simply implied. For instance, when you buy milk from a store, you give something in exchange for something else and enter into an implied contract, in this case - money is exchanged for goods.
There are some types of contracts which must be in writing.
The Statute of Frauds is a legal statute which states that certain kinds of contracts must be executed in writing and signed by the parties involved. The Statute of Frauds has been adopted in almost all U.S states, and requires a written contract for the following purposes:
Typically, a court of law won't enforce an oral agreement in any of these circumstances under the statute. Instead, a written document is required to make the contract enforceable.
Contract law is generally doesn't favor contracts agreed upon verbally. A verbal agreement is difficult to prove, and can be used by those intent on committing fraud. For that reason, it's always best to put any agreements in writing and ensure all parties have fully understood and consented to signing.
Verbal agreements can be proven with actions in the absence of physical documentation. Any oral promise to provide the sale of goods or perform a service that you agreed to counts as a valid contract. So, when facing a court of law, what evidence can you provide to enforce a verbal agreement?
Unfortunately, without solid proof, it may be difficult to convince a court of the legality of an oral contract. Without witnesses to testify to the oral agreement taking place or other forms of evidence, oral contracts won't stand up in court. Instead, it becomes a matter of "he-said-she-said" - which legal professionals definitely don't have time for!
If you were to enter into a verbal contract, it's recommended to follow up with an email or a letter confirming the offer, the terms of the agreement , and payment conditions. The more you can document the elements of a contract, the better your chances of legally enforcing a oral contract.
Another option is to make a recording of the conversation where the agreement is verbalized. This can be used to support your claims in the absence of a written agreement. However, it's always best to gain the permission of the other involved parties before hitting record.
Fundamentally, most verbal agreements are legally valid as long as they meet all the requirements for a contract. However, if you were to go to court over one party not fulfilling the terms of the contract, proving that the interaction took place can be extremely taxing.
So, ultimately, the question is: written or verbal agreements?
Any good lawyer, contract law firm, or legal professional would advise you to make sure you formalize any professional agreement with a written agreement. Written contracts provide a secure testament to the conditions that were agreed and signed by the two parties involved. If it comes to it, a physical contract is much easier to eviden in legal circumstances.
Freelancers, in particular, should be aware of the extra security that digital contracts may provide. Many people choose to stick to executing contracts verbally because they're not sure how to write a contract, or they think writing out the contract terms is too complicated or requires expensive legal advice. However, this is no longer the case.
Today, we have a world of resources available at our fingertips. The internet is a treasure trove of invaluable information, platforms, and software that simplifies our lives. Creating, signing, and sending contracts has never been easier. What's more, you don't have to rely on a hiring a lawyer to explain all that legal jargon anymore.
There are plenty of tools available online for freelancers to use for guidance when drafting digital contracts. Tools like Bonsai provide a range of customizable, vetted contract templates for all kinds of freelance professionals. No matter what industry you're operating in, Bonsai has a professional template to offer.
A written contract makes the agreement much easier to prove the terms of the agreement in case something were to go awry. The two parties involved can rest assured that they're legal rights are protected, and the terms of the contract are sufficiently documented. Plus, it provides both parties with peace of mind to focus on the tasks at hand.
Bonsai's product suite for freelancers allows users to make contracts from scratch, or using professional templates, and sign them using an online signature maker.
With Bonsai, you can streamline and automate all of the boring back-office tasks that come with being a freelancer. From creating proposals that clients can't say no to, to sealing the deal with a professional contract - Bonsai will revolutionize the way you do business as a freelancer.
Why not secure your business today and sign up for a free trial?