Thursday, April 15, 2010

Death and Texas

That heading only makes sense if this post had something to do with Texas. It doesn't. I just thought it was a funny turn of phrase. It's probably better suited for when I miss a connection and am stranded overnight in Houston, but when is that ever gonna happen?

Actors and taxes. I hear really funny things that make me very, very glad I have a reputable CPA doing my taxes.

I recall one actor backstage explaining how, if you're an actor, everything is deductible. Everything. Meals, clothes, haircuts, makeup -- everything. As it happens, little of that is actually deductible.

Meals? When it's business and with someone else, only half is deductible. Otherwise, when you're on your own, you can only deduct meals when you're staying overnight away from home due to work.

Clothes? Almost never. Even if you buy an article of clothing for a specific role or audition, if it's otherwise wearable in everyday life, you can't deduct it. Neon orange hazmat suit? Probably deductible. Blue button down you wear only at auditions and bookings? Not.

Haircuts? Again, almost never. If you have to get a certain haircut for a certain role, yes. Otherwise, no. Makeup? Unless it's weird zombie makeup or something and not everyday stuff, no. Same goes for gym memberships and plastic surgery and tooth whitening. No, no and no.

But people deduct stuff like this all the time. As it happens, most actors make so little money they're not an obvious target for the IRS, so a potential audit is not that big a concern.

Someone else was surprised that I owed money to the IRS, which I do every quarter. She was under the impression that your deductions should offset any taxes owed. Or that actors make so little they shouldn't owe anything at all. Weird. (I guess that might be true if I only did acting and it was an average or worse year.)

And I still don't understand why people -- actors and others -- get refunds from the IRS. Generally, if you're getting a refund, it means you didn't calculate your withholding correctly. Things should even out at the end of the tax year, so that little is owed by either the taxpayer or the government. I guess some people use it as a de facto savings account, but the IRS doesn't pay interest, so it's not a very good deal, unless you can't trust yourself to save otherwise.

So those are my tax day thoughts.

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