taxes, sorry

Im sorry to bring up such a dreary subject. As tax season is coming soon, I just was wondering if anyone would like to share any tips on filing for this particular business, what kinds of things would us newer painters want to know. Also, are you taking the home office deduction as your practice space/booking appointments space/learning space?
thanks

I let my accountant deal with it.

I second Shannon.

I wish I had an accountant.

I haven't had any experience with facepainting and tax season, but I do run a cake business out of my home. I keep receipts for all purchases throughout the year (I keep a little pouch in my purse for any "business" purchases, and have a folder on my email to stick e-receipts from online purchases) and every month, I sit down with the receipts from that month's purchases and enter them into a spread sheet. I also keep track of my mileage (since the gov't will refund you $.65/mile if you keep track) I have a clipboard in my car, everytime I drive to deliver a cake, meet with a customer, or buy ingredients, I jot down my beginning and ending mileage.

I also keep track of all $$$ I get paid for the year, my accountant takes my total amount $$ and subtracts my total amount of $$ for expenses, and he has my total amount of $$$ I profitted for the year, this gets added on as "extra income" on my tax forms. It's basically the same thing you would have if you had a yard sale (did you know you were supposed to claim money from that??) OR if you sell stuff on ebay (and you are supposed to claim this??)

I'm thinking it'd be the same with facepainting???

Thanks Tina!, this makes sense, my other business is real estate, while some is the same, some is different:), and my tax person is only as good as the information I bring her
you are very organized with your spreadsheets and all

I'm married to a Tax Consultant/Accountant
Here's a list I typed out for myself, I'm new to face painting so this is for the coming year (this is for the US)....
Advertising: business cards, newspaper ads, web design, website, domain name, flyers, yellow pages,
Vehicle expenses Mileage, MUST keep 'daily' log (Tina, you are a tax consultant's dream...and it will save you in an audit by IRS!)
Insurance (other than health)
Banking fees for business account
Legal and professional services (accounting, tax consulting, attorney fees)
Office supplies paper, pens, paper towels, etc
Supplies Tent for events, FatMax, paint, sponges, brushes, camera (for bus. use only) table, chair, baby wipes etc, etc
Education, BUT not in the year you first start (as this is a change in of type of employment and IRS does not allow education deducted until you are actually in that line of business)
Taxes on business
Licenses
Office in home determine total square footage of office/storage space and total square footage for home. Prorate utilities based on the difference. These areas must be for exclusive use of your business

If you purchased durable equipment for business use during this tax year you will need a list of the item, the purchase price, and when "put in service" in your business. (Examples: computers, adding machines, desks....) These need to be used exclusively for business, btw.
ALL RECEIPTS
I'm sure there's more, but I haven't run it by my sweetie yet.

Some conservative tax consultants may try to say it is a hobby. But even though you may operate at a loss (for a time) you can still claim it as a business if you show a clear profit motive, ie website, business cards, advertizing…

When searching for a tax preparer, it is really good if you can get an Enrolled Agent. They aren't as expensive as CPA, but they are tested by IRS and can represent you. A lot of states don't even test people to be tax preparers (tho IRS is changing that) so get the best you can get.

Thanks guys!! I became well organized after forgetting to make a cake! lol I bought a program called "cake boss" and I absolutely would not be able to run my business without it!! It allows me to enter expenses and it automatically puts them in order of date...at any given time I can print out a "report" on my expenses, orders by type, orders by customers, etc. for any given time period.

I have done the same with facepainting stuff, which is why I know..without a DOUBT that I have spent exactly $613.27 on stuff! lol

I paid $150, but the time and effort it takes to just select Jan.1,2012 to Dec.31,2012 and click enter and print to give my tax guy....oh it's worth it!! The program has been my constant bff for about 4 years now and has paid fror itself over and over and over again lol

hmm, wonder if theres a paintboss program lol

thanks Valerie, My taxgal is an enrolled agent

Very good pick of tax preparer! Glad to be of some help. Nina, very pretty catface! Love the colors and the spots! (your model has beautiful eyes, btw.)

thank you, its my daughter
and its my cats and feline face entry in the wcfp contest:0

Nina this cat face is awsome!!! I love it! Was following up this subject as i foibd it interesting for my coming year 2013!! Great points from all!!! Could not resist to tell u!!!

I have a spreadsheet on my resources page (Excel, you can just save it and use it).

OK, Thanks Shannon, I also have plans to use some of your other shared material

I have a file on my computer where I have a spread sheet for each month. I keep track of:
income & where it came from. I name my corporate gigs, PPF festivals, private party & area of town, etc. I also put the date.This way I can track how I'm getting most my income & what dates are best
Next is my expenses. I put the date & who got the money (Paying another face painter,Walmart, Michaels, FPF Shop, etc). I also keep track of a percentage of my internet & phone since it's part of my business expense. Don't forget things like insurance, training if you go to a convention or workshop have a FABATV subscription or magazine subscription or books. Also, Meals & hotel if you travel more than 50 miles from home. Paypal fees or credit card fees if you use these services. I keep all my receipts in a folder.
Mileage: I keep track of mileage every time I leave the house for face painting related travel (this includes trips to the store to buy supplies, trips to jams, trips to the bank as well as going to & from gigs).
I give all of this to my accountant & she takes care of the rest.

I'm claiming my Yacht & Rolls Royce this year

Quickbooks Pro and Turbo Tax!

My advice is get a good system in place and use it.

Remember, you can count only the business miles on your yacht, Linda

Shannon the link on your resource page doesn’t work for me, but I have an I-Mac not a PC (not sure if that has anything to do with it). Do you have a PDF?

I have a mac too try to find a software that let you install excel and words for mac. I can't live without excel!!!

eviedejesus wrote:Shannon the link on your resource page doesn’t work for me, but I have an I-Mac not a PC (not sure if that has anything to do with it). Do you have a PDF?

I don't. It is a working Excel spreadsheet. Creating a PDF doesn't really serve the purpose. If you go to this blog post I go over it in detail....

http://shannonfennell.wordpress.com/2012/07/01/business-tips-for-face-painters-body-artists-and-make-up-artists-7-setting-your-rates/

I use Quickbooks for all of my shop info like generating customer receipts, purchase orders, etc. I print off every sale receipt and keep them in a binder, and in another section of the binder I keep all of my gig contracts. But I still keep one master Excel spreadsheet which lists all my web sales on one sheet, all my gigs on another sheet (with mileage for each gig), and all expenses on another sheet. Luckily my hubby is happy to do it all with TurboTax so all I do is print off my big spreadsheet and hand it to him!