Tax time – what can stencil artists claim?

spray paint

Tax time – what can stencil artists claim?

A couple of months ago we wrote about selling artworks and the difference between being a ‘hobbyist’ and a ‘small business’ as far as paying tax on artwork sales. Hobbyists aren’t usually required to pay tax, whereas artists operating as a small business are required to pay tax.

Evan from Lowensteins Arts Management  has shared with us a few pointers on the sorts of deductions artists are eligible to claim in Australia:

Artists who can demonstrate that they are ‘in business’ as a professional rather than a hobbyist, are usually able to claim their art practice expenses against all forms of art related income. These expenses might include:

  • Art supplies
  • Books, magazines, reference material
  • Business insurance
  • Cabs, subways, buses
  • Copying, printing
  • Couriers and postage
  • Cultural events/ museum entrance fees
  • Entry fees
  • Equipment and software
  • Film & processing
  • Framing
  • Gallery fees
  • Gas and electricity (based on a percentage of area used as a studio)
  • Internet (business use  only to be claimed)
  • Legal fees
  • Memberships (museums, professional organizations)
  • Office supplies
  • Promotion
  • Studio or home studio rent
  • Tax preparation,
  • Telephone
  • Travel

Artists need to consider the percentage of personal use versus professional use for expenses such as internet, phone, gas, electricity, equipment and software. For example, artists should estimate a percentage of electricity use for a home art studio based on how many hours a week they use their studio and the amount of electricity used in this time.

The more organised you are before you start your tax return, the easier your tax return will be to complete. Organising your receipts and documents for a tax return doesn’t have to be a complicated process. It can be as simple as sticking receipts into an exercise book and tallying up the total in an excel spreadsheet or on a calculator.

Getting into the habit of keeping travel receipts and making notes in a diary or calendar about the purpose of the travel means that should an audit arise, artists will feel confident that all of their travel related expenses are justified and legitimate.

Artists who are looking for further advice or assistance with their tax are welcome to email Evan here.

Huge thanks to Lowensteins Arts Management for supporting the 2016 Stencil Art Prize

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