Talking Deductions

		Talking Deductions
*In "ActorSpeak"* For most performers the work of preparing for and seeking work ends up taking all of our time and money. Essentially any cost you undertake to be ready to work and/or to pursue an audition is considered a "Job Search Activity" and is acceptable to the IRS (those general expenses are defined elsewhere on this website.) *That said, there can be conflicts in an audit when those expenses can be considered personal or otherwise regular expenses of people who are NOT in our business.* Being "ready" for when a paying opportunity comes along consumes a great deal of our expenses. Unfortunately the IRS doesn't take the same position and that becomes the biggest problem most actors have understanding what is deductible and what isn't. For example, everyone has to wear clothes and we all like to look our best. We all have a TV in our homes and are usually connected to cable or we go to and/or rent movies. Because the average person has these same expenses as a regular course of their lives, you are not allowed to write off those things without establishing a specific and direct connection to the industry. As a result clothing which can be worn on the street is not deductible even if you only wear that clothing to auditions. If you purchase specific costumes to audition in (or for a play) that's a different story. That might include a policeman's uniform, doctor/nurse scrubs, a clown outfit. But don't try to write off any clothing that can be work on the street. That includes that evening gown or tuxedo because, however unique they may be, they can be worn on the street in normal day to day (or perhaps evening) activities by anyone. *As any number of people color their hair and we all go to the gym to look our best, those are considered "normal" costs to the general public and therefore not deductible.* *Sure, if a producer tells you that if you color your hair or lose ten pounds, the costs can be written off. But we all know that if we don't already have the right hair color or we've have already lost the ten pounds BEFORE the audition, we probably will never even get the audition (unless we are already a star.) But because that hair color is your "normal" hair color, the costs of maintaining it can't be written off. Don't think you can deduct the new 50 inch TV just because you are an actor because everyone has a TV in their home. On the other hand if you can prove there was a need for a second TV because you have a roommate or the children watch their own programs when you need to be viewing other programming for your business, you may have an argument. But you will first have to validate the educational value of what you are watching by taking notes of the programs and indicating what you learned that was valuable to your career. But even if you take these steps, it will be an uphill battle to convince the IRS that the cost of a new 50" flatscreen was a "requirement."* Generally with the IRS there is little middle ground unless you follow the guidelines they demand to prove the legitimacy of your deductions (Can you prove you actually spent the money) AND the relationship of those deductions to our business as "Ordinary" and "Necessary" expenses. As you can see, on one side of our pages we will present the actual IRS language (*"In the Words of the IRS") that they use as a guide to make their decisions and, if necessary, on the other side of the page we will explain ("In ActorSpeak") what the IRS means in "English" and why the IRS has come to the conclusions it has. We don't pretend it makes you feel any better, but the purpose is to help you understand the basis of their decisions and as a result, better prepare yourself for being able to prove why a particular deduction is a valid business expense for you. Good luck! Back to Topics*		In the Words of the IRS: "Entertainers have been known to make a convincing argument about how much they have to spend to "stay on top" or keep current; nevertheless, most of these items typically overlap too much with personal expenses to constitute business deductions. " An ordinary expense* is one that is common and accepted in your field of trade, business, or profession.* A necessary expense* is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.* *Back to Topics*

Talking Deductions

In "ActorSpeak"

For most performers the work of preparing for and seeking work ends up taking all of our time and money. Essentially any cost you undertake to be ready to work and/or to pursue an audition is considered a "Job Search Activity" and is acceptable to the IRS (those general expenses are defined elsewhere on this website.)

That said, there can be conflicts in an audit when those expenses can be considered personal or otherwise regular expenses of people who are NOT in our business.

Being "ready" for when a paying opportunity comes along consumes a great deal of our expenses. Unfortunately the IRS doesn't take the same position and that becomes the biggest problem most actors have understanding what is deductible and what isn't.

For example, everyone has to wear clothes and we all like to look our best. We all have a TV in our homes and are usually connected to cable or we go to and/or rent movies. Because the average person has these same expenses as a regular course of their lives, you are not allowed to write off those things without establishing a specific and direct connection to the industry.

As a result clothing which can be worn on the street is not deductible even if you only wear that clothing to auditions. If you purchase specific costumes to audition in (or for a play) that's a different story. That might include a policeman's uniform, doctor/nurse scrubs, a clown outfit. But don't try to write off any clothing that can be work on the street. That includes that evening gown or tuxedo because, however unique they may be, they can be worn on the street in normal day to day (or perhaps evening) activities by anyone.

As any number of people color their hair and we all go to the gym to look our best, those are considered "normal" costs to the general public and therefore not deductible.

Sure, if a producer tells you that if you color your hair or lose ten pounds, the costs can be written off. But we all know that if we don't already have the right hair color or we've have already lost the ten pounds BEFORE the audition, we probably will never even get the audition (unless we are already a star.) But because that hair color is your "normal" hair color, the costs of maintaining it can't be written off.

Don't think you can deduct the new 50 inch TV just because you are an actor because everyone has a TV in their home. On the other hand if you can prove there was a need for a second TV because you have a roommate or the children watch their own programs when you need to be viewing other programming for your business, you may have an argument. But you will first have to validate the educational value of what you are watching by taking notes of the programs and indicating what you learned that was valuable to your career.

But even if you take these steps, it will be an uphill battle to convince the IRS that the cost of a new 50" flatscreen was a "requirement."

Generally with the IRS there is little middle ground unless you follow the guidelines they demand to prove the legitimacy of your deductions (Can you prove you actually spent the money) AND the relationship of those deductions to our business as "Ordinary" and "Necessary" expenses.

As you can see, on one side of our pages we will present the actual IRS language ("In the Words of the IRS") that they use as a guide to make their decisions and, if necessary, on the other side of the page we will explain ("In ActorSpeak") what the IRS means in "English" and why the IRS has come to the conclusions it has.

We don't pretend it makes you feel any better, but the purpose is to help you understand the basis of their decisions and as a result, better prepare yourself for being able to prove why a particular deduction is a valid business expense for you.

Good luck!

Back to Topics

In the Words of the IRS:

"Entertainers have been known to make a convincing argument about how much they have to spend to "stay on top" or keep current; nevertheless, most of these items typically overlap too much with personal expenses to constitute business deductions. "

An ordinary expense is one that is common and accepted in your field of trade, business, or profession.

A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.

Back to Topics