Los Angeles Actors’ Guide to Filing Taxes in 2020
Paying taxes may not be one of your favorite activities to do. Everyone who has earnings pays taxes. Paying taxes is a responsibility, and although it may seem scary for most of us, anyway, it is something that we have to do. I know that the number of documents may seem scary, or the process may not seem very simple for you. But I am sure in time you will get used to it. As a headshot photographer in Los Angeles who takes affordable headshots for actors, I would like to give a Los Angeles actors’ guide to filing taxes because I know that in this season, it is one of the essential things on your mind. Successful Los Angeles acting career is a dream for many actors. However, most of the actors struggle when the tax season shows up. It is essential to know that you are not the only one, and in some time, paying taxes will become a very usual thing for you. Take a deep breath, relax, and read my guide on how to make tax season less stressful.
Most probably, you already know what taxes are. But to keep everyone on the same page, let’s briefly recap. Taxes are an amount of your income which you pay to the government. The tax season is from January to April 15th each year. During that time, you, as a taxpayer, must prepare all the necessary documents about your earnings during the previous year. The records should include your financial statements. It is always essential to prepare the right financial reports so that later no other problem rises. This will make the process smoother, and in addition to that, you will be more relaxed.
For the Los Angeles actors’ guide to filing taxes, this is one of the essential parts.
Each year you may pay different amounts of taxes because it very much depends on the income that you get during the year. And maybe you will not need to file a tax. In order to understand whether you need to file tax or not, it would be very helpful to check out this IRS website. This is the Internal Revenue System (IRS) site, where you will answer a couple of questions and understand if the filing is a requirement, or not.
What You Should Report on Tax Return
One of the essential parts of this process is making sure to report on your tax return the right amount of income that you have earned during the previous year. You should pay massive attention to this part because the amount of tax that you should pay relates to your income. You should file from which type of job did you earn your income and other details about your job. In addition to that, you must also report interest income, dividend income, alimony income, Social Security income.
And if you have any other income from other sources, then you should report it. In this process, you must keep in mind that you must report everything honestly. Because otherwise, you may face some kinds of problems. If you are filing taxes in 2020 for the first time, then you must keep up with the updates, because there are things that may have been changed about what you should report concerning your income. Today, the most reliable source is the IRS website, so I am sure you will find everything you need there.
The Required Documents for Filing a Tax Return
The essential documents that you will need with you are your tax ID or Social Security number, a document which shows your income and any deductions. You will receive different kinds of forms depending on if you are an employee or an independent contractor. In addition to this, your form may vary depending on a couple of aspects of your income. In order to be more aware of the list, I highly recommend you visit the IRS website.
This website is beneficial for you to understand which documents are required in your case. I’m sure during the tax season. This website will be a Los Angeles actors’ guide for you. It is important to know that for each individual, the documents may be different. So if your actor friend has collected a certain amount of types of documents, it does not mean that you must also collect those types of documents. So, do your research.
The Importance of Receipts
I highly recommend you to pay a lot of attention to keeping receipts. As a headshot photographer in Los Angeles, I always keep the receipts that have to do with my business. In Los Angeles, actors guide on filing taxes, this is an essential part to keep in mind. I understand that it may be hard to keep all the receipts that are related to your career, but in time it will become a habit for you. There are a couple of ways of keeping the receipts.
One of the methods is to have a special electronic program and, with the help of your telephone, scan the receipts into that program. Collect them in the folder, and be careful not to lose anything. This will prevent you from losing the receipts, and you will be sure that they are in a safe place. It may not be effortless at first, because you may forget about it, but I highly recommend you to make this a regular part of your life.
Other Essential Documents
You may not use them, but in order not to have any kind of problems. You may also have a copy of last year’s tax return. Maybe it will be useful, so it is a good thing to be aware ahead of time and be prepared. Of course, there is a chance that you may need a piece of particular information from there, which may be required for the process. As a headshot photographer in Los Angeles who takes affordable headshots for actors, I know a couple of cases when an actor did not have last year’s tax return with him. And, it was needed in the process. And eventually, because he didn’t have it with him, different problems rose. This not only makes the process more complicated but also spends your precious time. So even if there is a slight chance that the government requires it, then you should take a copy with you. It is better to be prepared for every situation. I am sure during your Los Angeles acting career, you already understood how important it is.
Amount of Money That You Earned
I am sure that many actors, especially the ones who are at the beginning of their career, may ask themselves, “What if I haven’t earned enough money?”. You have to step-by-step read about filing requirements and learn it. And, if your income meets the requirements, then you have to file a tax return. So, filing a tax is not a decision that you have to make; there are specific rules that apply to everyone. Everyone has to follow those rules, and if your income meets the requirements, then your responsibility is to file the tax return. So, even if you think that you didn’t earn much, I am sure this will be a motivation for you to make more next year. This may be difficult, especially at the beginning of your Los Angeles acting career. However, I am sure that hard work will pay off. You should start working hard right now. Here you can find useful tips on your Los Angeles acting career.
Are Actors Self-Employed?
There are some actors who are self-employed, and there are others who are employees. If you are a self-employed actor, then that means that you are not working for someone else. For example, you can be a sole proprietor. There are also other conditions under which can be considered as self-employed, you can read more about it in the IRS site.
Considering President Trump marking the Tax Cuts and Jobs Act (TCJA), you might be thinking about whether it bodes well to enlist as an LLC, as the new expense conventions appear to be more business-accommodating than craftsman benevolent. That is something you’ll need to decide for yourself. For instance, in case you’re a worker and have representative costs, you won’t have the option to guarantee a finding for these costs—which fall under the classification of various separated derivations—under the TCJA until at any rate the year 2025.
As a result of deductions, your taxable income will be reduced. Hence the tax that you should have paid will be lower. I am sure this will be helpful in your Los Angeles actors’ guide in filing taxes in 2020. There are two types of deduction, itemized deductions, and standard deductions. Each year the IRS sets the standard amount of deductions. You will not need to show some additional forms for that deduction, and it is a standard amount.
In the case of itemized deductions, it is approved individually for each person. For the Los Angeles actors’ guide in filing taxes, it is essential to know which are the criteria you can deduct expenses. These criteria are as follows: the costs are connected to your acting, it is necessary, and it is not absurd or wasteful. As an actor, you have to be honest and record only the expenses which are related to the criteria mentioned above. As a headshot photographer in Los Angeles, below, I will introduce to you which deductions you can state as an actor.
What Deductions an Actor Can State
There are certain deductions that actors can state. The deductions are the same for every actor. An example of a deduction can be, business travel, and in this case, the transportation and staying expenses can be deducted. Another example can be the fee that you pay to your agent or manager. This type of expense also will be deducted. If you took any kind of acting classes, for the improvement of your skills, then that is also a type of expense that will be deducted.
Any type of property which you bought and was needed in your acting can also be deducted as an expense. If you need to have your makeup and hair done for a job or a headshot session that is related to your Los Angeles acting career, then the costs of it will also be deducted. This list is very long, and you need to carefully examine it and understand which can be applied to you.
What Will Happen in the Case of not Paying Taxes
If you do not pay your taxes, then there will be very harsh punishments. You may get financial penalties and even end up in jail. Of course, prison is the severest punishment, and it is a rare thing to end up in jail. But there have been cases, so I am sure you don’t want to be one of them. Not paying taxes on time can also result in punishments. You will face penalties that can be very harmful to you.
For example, your bank accounts will be levied, or your properties may be seized. So, the cost is very high, and the time to resolve the problem is very long. And it is every taxpayer’s responsibility to follow all the IRS rules very carefully. I am sure you will not want to have challenging problems. So get informed about the process and pay your taxes on time.
As a headshot photographer in Los Angeles, I tried to include all the necessary information for you. Make sure to follow all the instructions and find out information about the process. At first, it may seem quite complicated, but after some time, you will get used to it. Follow this Los Angeles actors’ guide to filing taxes in 2020. I am sure the process will be easier for you.
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