by Sara Willcutt
Tax season can be frustrating, especially for dancers who work several different jobs throughout the year. As a professional dancer, it is important to keep accurate records of your income and expenses in order to complete your tax return at the end of the year. Record keeping is essential whether you are dealing with a company, pick-up jobs or both.
Employment Forms and Deductions
After you are hired, your employer should give you a W-4 form to complete, which provides a guide in determining what percentage of taxes to withhold from your paychecks.
When you fill out the W-4, make sure you are withholding enough money. Federal taxes should account for at least ten percent of your income. Specific rules differ for each state, but you can find complete federal information by visiting www.irs.gov.
If you are an independent contractor, you are responsible for paying your own social security tax, which is about 15.3% of your net income minus the allowed deductions, state and federal taxes. If the total of your net self-employed earnings from all businesses is $400 or more, you must pay into the Social Security and Medicare systems by filing Form 1040, Schedule SE.
It is especially important for dancers who work in different states throughout the year to keep records of work locations and be aware of the tax laws for those states. You are responsible for paying taxes to the states in which you have worked regardless of your residency. For example, if you worked in a show in Los Angeles but live in New York, you are still required to pay income tax for the work you did in L.A.
Tax rules are subject to revisions from time to time, but it is your job to stay informed of any relevant changes. Check with the IRS for any updates, and ask your employer if you have questions.
End-of-the-Year Forms
The employer provides a W-2 form at the end of the year, which lists the income and deduction amounts you need to complete your tax return. Your employer has until January 31st of the year after you worked to give you a W-2.
For any jobs in which you were employed as an independent contractor, the employer provides a 1099 form rather than a W-2. However, the employer only provides a 1099 form if you were paid $600 or more in that year. Keep in mind that you are responsible for reporting and paying taxes on income received from employers in yearly amounts less than $600, even though you do not receive a 1099 form.
What to Record
Income taxes can be a little confusing, but just be sure to keep records andreceipts. Keep track of your mileage and other costs that you incur as a dancer. Get an accordion folder or file cabinet where you can keep your records organized. You can keep a small notebook and pen in the car to record your mileage if you are deducting work-related travel expenses.
Keep in mind that there are many rules about deductions. For example, if you teach at a dance studio, you cannot deduct the miles that it takes you to get from your home to work and back. But if you take your team to a competition, you can deduct those miles. For complete rules about deductions, refer to the IRS Web site.
How to File
You can complete your taxes by using commercial software such as Turbo Tax or Tax Cut, or by using the free online program at www.irs.gov/efile.
Professional Help
Some people may think that using an accountant is expensive, but if you keep accurate records and do most of the prep work, the cost can be minimized. In addition, you can research by asking others which accountants they have found to be efficient but reasonably priced. You can often find rates for accountants on their Web sites or call them directly.
An accountant can provide help from a professional who is familiar with all of the tax rules. If you can find an accountant who has had experience working with performers, they may know about additional deductions of which you were not aware.
If you decide to work with an accountant, choose carefully and understand that even if the accountant completes your taxes, you are still responsible for the content and accuracy of the return.