Itemized vs. Business Deductions: Ending the Confusion

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If you’re a creative entrepreneur, you may be confused about itemizing vs business deductions, and whether to itemize or take the standard deduction when you’re filing your taxes. 

Today, I’m diving into the details of business deductions and itemizing as a creative, the differences between the two, and exactly how to know if you should be itemizing. I’m also sharing the civic side of taxes and some of the built-in biases that exist within our tax system.    

Also mentioned in today’s episode: 

• Schedule C and who gets to file it 3:09

• What are business deductions 6:25

• The standard deduction for 2022 12:09

• What are itemized deductions 14:25

• The difference between itemized deductions and business deductions 22:05

• The equity issues behind itemized and standard deductions 23:36

• Why the tax code favors home ownership 29:10

• Exactly how to know if you itemize 32:40

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Links:

https://www.sunlighttax.com/deductionsguide

Mileage: The Best Tax Deduction You're Missing

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Today, I’m talking about one of the best tax deductions you should be taking as a creative entrepreneur and one that often gets missed: the mileage deduction. 

In this episode, I explain why you should track business mileage for your taxes and how to get the most out of this tax deduction. I’m also sharing some easy, actionable steps for you to get started with keeping track of your mileage today. 

You can get a 20% discount on MileIQ using this code: HCOL124A This is an affiliate link, but I want you to know that I use MileIQ in my own business, because I think it’s the best one. 

Also mentioned in today’s episode:

• The two different ways you can take mileage deduction 3:04

• Why mileage can be such an awesome tax deduction for entrepreneurs 5:55

• How to make keeping track of your mileage easy 6:39

• Keeping track of your mileage in 2022 8:58

• Actionable tips for getting started with mileage today 10:05

If you enjoyed this episode, please rate, review, and share it! 

Links:

Visual Guide to Tax Deductions

10 things I've learned doing artists' taxes

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Links:

https://www.sunlighttax.com/deductionsguide

Money Management for Creative Professionals

Nerissa Street of Ten Thousand Women Ten Thousand Stages Podcast interviews art-centric tax expert Hannah Cole about her influences as an artist and as a tax expert for creative freelancers. This interview is available as both a podcast and a video, so you can choose the medium that you prefer.

Hannah Cole and Nerissa Street of Ten Thousand Women Ten Thousand Stages podcast

What do creative people need to know about the differences in tax laws between gig workers and employees? How much should you be saving in self-employment tax? How has the landscape changed in the current economy?

Hannah had two messages growing up: "Do what makes you happy!" and "Art won't make any money." How did that and her other experiences as an artist help her translate design needs into practical commercial benefit? They also talk about the stimulus bills and payments, deductions, and what you can look forward to in July if you have children.

Who benefits from the latest tax legislation? What has changed with business meal deductions this year?

You can either listen to the hour-long podcast here, or view it below via YouTube:

Startist Interview: Profit Motive, Marketing, and Tax Tips for Artists

Is your art a business or a hobby?

Hannah talks with Laura Griffin and Nikki May of Startist Society about her roots as an artist and about establishing a profit motive for your art business. She chats about empowerment for artists and how she got started in accounting after some bad experiences she had as an artist.

What should you use to track expenses? How and what expenses are deductible? Can donated artwork be deducted? Do I need to collect sales tax? Find out the answers in this podcast interview relevant to creative freelancers in the US.

Hannah discusses what things in nature and the outside world inspire her as an artist and how to slow down to look at things that most people don’t notice. How does she choose what she paints in her art practice?

They talk about using your left brain vs. right brain and balancing art and your business practice. Hannah goes into depth about how to show the IRS that your art is a business and not a hobby. They discuss how to show a profit motive through your activities and record-keeping—even if your business is not yet generating a profit.

Hannah gives specific information about tracking business expenses and receipts with examples that pertain to creative people. She also discusses how LLCs are legal and not a tax entities. They explore how to prevent tax audits and common deductible expenses, including details about mileage, business meals, donations, etc.

Money Bootcamp is an annual membership for creators to get you set up right and tracking all the right things without wasting your time. You'll have more time for creative pursuits when you stop worrying about your finances and money.