It’s Crunch Time! (Part 1 of 3)
CMN’s 2017 Tax Filing Handbook Overview:
1-3. Get Set Up for a Painless Tax Filing & the Essential Forms and Documents to have
Have you ever promised yourself that this would be the year that you filed your taxes early?
How many times were you convinced that you would actually carry through – only to find yourself scrambling to get them submitted on Tax Day?
We’ve all been there a time, or two
The key to getting your taxes done early is to be organized and to have a plan in place to make things easier on yourself or your tax preparer.
This post will be a three-part series:
- Tax forms and other documentation that musicians and other artists commonly need to have their taxes filed
- Expenses musicians should keep track of throughout the year in order to take advantage of deductions that lower taxable income
- Tips on how to start NOW
(or the day after this year’s Tax Day, if you insist preparing to file taxes next January)( ← we probably don’t want that… )
I recently listened to an interview with entrepreneur Betsy Allen-Manning, on the podcast Entrepreneur on Fire (which is a REALLY good podcast for the entrepreneurial spirit out there… YES, if you’re an artist, you ARE an entrepreneur!).
During the interview, Allen-Manning emphasized,
“The fastest way to success is to get a TAN – Take Action Now!”
With that in mind, start today by gathering one or two of these forms, then a couple more items each day, until you have everything needed to begin.
I recommend keeping tax forms in an accordion file or in sheet protectors inside of a zip-up binder. Keep an electronic copy of this list on a cloud-based software app (I use Google Keep), so that you can add to it as you think of additional documentation specific to your tax situation.
Income Documentation – proof of your income from the previous year
- W2 –
- General wage/salary statement that you should receive from your employer by January 31st each year. (if you are SURE it isn’t missing from you burying them in the junk mails, EMAIL your employer RIGHT NOW to ask for it)
- 1099-MISC –
- Report of income from labor where you worked as an independent contractor.
- In general, you will receive 1099-MISC forms as opposed to filing them. However, you are required to file a 1099-MISC to send to an individual if you paid them at least $600 for space or equipment rental, prizes/awards, payments for services by someone who is not your employee, or payments to an attorney.
- Record of misc. income NOT on 1099-MISC –
- keep checks from all freelance services; if more than $600 total, look for 1099-MISC from the check issuer.
Payment Documentation – Record of payments that you made for which you receive some type of tax form
- 1098-E –
- Student Loan Interest Statement. A portion of the student loan interest you paid is tax deductible!
- 1098-T –
- Tuition Statement. The expenses you paid for college tuition may make you eligible for a taxable income reduction or a tax credit (← take advantage of this you guys!!!!)
- 1095-A –
- If you or any of your dependents had a Healthcare Marketplace plan, you should receive a Healthcare Marketplace Insurance Statement in the mail. You can also download the info on your account with www.healthcare.gov
- License Tag Renewal Notice –
- A portion of your vehicle registration fees may be tax deductible.
- The deduction varies from state to state, so check with your state’s Department of Revenue for more details.
- Receipts of expenses
- such as charitable contributions (especially instrument or supply donations)
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