There are two certainties in life, death and taxes, or so the saying goes. Stage Managers have a wide variety of deductible items, from software to travel. Below is a list of deductions published in the Actors' Equity Newsletter they send to all members of the Union (you can opt for the on-line version as I have or you can have the hard copy sent to you. In an effort to save trees and perhaps out of guilt as I've been guilty of a life time of heavy paper use as a stage manager, I prefer the online version). You can find back copies of the Equity Newsletter in their documents library on their web site. This portion of the website is open to anyone so feel free to browse.
Actors' Equity and Taxes
The following is culled directly from Actors' Equity e-zine, Equity News. Obviously, this information is primarily for performers. Stage Managers can deduct their expenses too. I've included in red the additional areas that I think Stage Managers should think of when planning their taxes for either their accountant or themselves. A caveat that is important to iterate. I am not a tax professional nor do I play one on TV! I use a professional accountant and I have for years. I find doing taxes an odious job and I much prefer a professional handle it. I am a strong proponent for a set tax for everyone, saints and sinners included. That's as political as I'll get here. Read below and make your own choices.
http://www.actorsequity.org/docs/news/en_02_2015.pdf
What you may and may not deduct on your taxes for professional development.
1) Advertising & Publicity: photos, résumés, websites, IMDb, Showfax, Inc., etc. Fortunately stage managers don't have the same demands in the publicity area that performers do. That doesn't mean you don't advertise yourself. If you run a web site, where potential employers can view your work, then the cost of the website and any reproduction expenses you may have are also deductible. Also, the cost of mailings, printings of your resume, etc. Anything you do to advertise yourself is deductible.
2) Accompanist/Audition Expense: accompanist, scene partner, audition space/equipment. I cannot think of a comparable expense for Stage managers.
3) Agents’ Commissions/ Managers’ Fees: 10 percent (for agents); 10-20 percent (for managers). Again ,we don't have agents and managers (at least I never did). We do have organizations that are important to our networking capability and exposure. This can include the SMA (Stage Managers Association), USITT (The Institute for Theatre and Technology), SETC (South Eastern Theatre Conference), etc. Dues, travel to and from, expenses while there, are all deductable expenses. They are part of the business of selling yourself in a free lance market.
4) Coaching/Classes/ Lessons: voice, speech, acting, dance, movement, dialects, fencing – any specialty performance training. For stage managers this would include any classes you might take to increase your marketability. If you take software lessons in Vectorworks or in class lessons on Photoshop or Dreamweaver, these are justifiable expenses especially if your school training emphasized learning multiple platforms beyond live theatre entertainment. If you're going on tour to a foreign country, language courses and software should be deductible.
5) Entertainment for Business: for seeking and/or continuing professional contacts, obtaining work, furthering income production, etc. This is a touchy one and some may disagree with me. There are many things you can deduct if you are entertaining someone for the purpose of networking. What you can't deduct is your expense. For example; you but a general manager a drink at a dinner your both attending. You may deduct the cost of his/her drink but you can't deduct the cost of the one you bought for yourself. If you buy the company donuts on your way in to work you can deduct that (even if you have one yourself). Dinners, parties, etc. may all or in a portion be deductible. My rule of thumb is to be fair. Don't cheat the government of what is owed them but do deduct legitimate entertainment expenses. Those taxes also pay for roads, bridges, senior centers, medicare, etc.
6) Equipment & Software: audio/visual equipment, recorders, MP3 players, computers, personal organizers, smart phones, tablets, recording and editing software, mixing/audio, etc. for business. Stage Managers own this deduction. Keep yourself up to date while you're at it. Your ability to solve problems and move the company forward are integral to your daily life. Make your life easier by keeping your software updated, buy a new computer every three years, wireless printers, routers, wfi enabled machines, etc. Don't scrimp here and write it all off.
7) Gifts for business: to agents, managers, directors, choreographers, casting offices, etc. It goes without saying that many people will help you along the way. Remember them at Christmas and Holidays. It's not only a deduction but it is a reminder that you think highly of the help they've provided along the way. Let them know how much you appreciate them.
8) Makeup & Hair Care – While working or in preparation for a specific job, including wigs, hairpieces and theatrical makeup. Not much here, I'm afraid.
9) Office Supplies: stationery, mailers, postage, stamps, desk supplies, etc. The second one we "own". We're a walking Staples store. Keep your kit up to date and write it all off.
10) Repairs/Equipment Maintenance: piano tuning, equip. maintenance contracts, repairs, etc. I'm not sure where we fall in this category. If you own a high end copy machine in your house and it needs repair then I suppose you fit this category. Obviously, if your computer goes down that is a legitimate deduction. So is the cost of back up and cloud expenses. I think portability is key to the stage managers life so I don't see us owning a lot of high end equipment such as hundred thousand dollar reproduction machines.
11) Rental of Equipment, Studio Space, Cable TV, etc.: business use of contract rentals, video subscriptions, recording or rehearsal studio, etc. Here's an interesting deduction. So can you deduct Netlflix? Technically, no. But.... I do deduct my router expense, a portion of my cable expense, my cell phone expense, etc. To be current in today's world you have to work where you can and many times that is from home, so I deduct a portion of that cost too. My life as a stage manager and my life as a professional educator means I don't sit behind a desk every day and crunch numbers. As a teacher, I have to strike when the muse in me arrives. It can't wait until I get to the office and write it down. Even now, I am sitting in my living room typing this out because I felt now was the best time to pick this thread up again. You can deduct the portion of your house dedicated to your work, so I deduct my home office space which is only about 10% of my total square footage of my home. My wife also works at her job but from our home. We deduct her home office as she is more than 75% of her job here than at the main office in town.
12) Research Supplies: music, scores, DVDs, scripts libretti, books, downloads, iTunes, etc. I deduct a moderate amount of books and scripts that I buy. I like to read books on how to be a better manager and not just a stage manager. I like also looking into the future so I read pretty voraciously about everything. There are many factors that impact live theatre and our careers in entertainment. I consider it my research agenda to not only stay up to date on current management trends but to look at everything as it effects the live entertainment industry so I deduct the materials I buy to read. The economy has a big impact on entertainment dollars. It's best to stay informed.
13) Tax Preparation/Legal Fees: any business-related fees paid to a professional. As I state at the top, I hate doing my taxes so I pay someone to do them for me. He's a nice old man named Alton and once a year we catch up on what's been going on with his life.
14) Telephone: long-distance or toll calls, a second line dedicated to business use, cellular phone business use, call waiting, call forwarding, data packages, etc. They say your supposed to apportion your cell bill to how much is personal versus how much is for business. I confess I don't do this because honestly, I text my wife more than talk with her on the phone and text's are free. If I am going to be on the phone 99% of the time it is with my job.
15) Tickets for Research: theatre, film, opera, concert, dance entry fees for the performer’s study. Theatre tickets yes though my colleagues disagree with me when I tell them that movie tickets are not deductible. If I had a career in the movies perhaps, but I don't. While my program is working towards exposure to Film and Television studies as well as live theatre then it becomes a little more real and a little more understandable. If you go back to my research agenda you'll understand that I believe the modern stage manager should be versed in all three. I think you should be the kind of stage manager who is as comfortable on the TV set as in the rehearsal hall. It should become a deduction for my students of the future. Just not for me.
16) Tips/Gratuities: to the dresser, maid, doorman or any related personnel. Remember tip #7? Those that are helping you now often deserve some reward as well. If you have a doorman, tip him. Bring him/her coffee on occasion. Make their lives sunnier for them making yours easier.
17) Trade Publications: Backstage, Variety, Performers’ Cues, Call Sheet, etc. Yup, yup, and yup. If you have a subscription to the Theatrical Index, deduct it. The professional version of LinkdIn, deduct it. If you're paying for it to stay current it is deductible.
18) Transportation Seeking Employment: bus and subway fares, auto use, taxicabs, jitneys, car services, etc. to attend auditions, go-sees, classes, interviews. This is another of those touchy ones. Transportation to SEEK employment is a deduction. Transportation to your job within a certain set of miles is not. Check with the IRS, they have a pretty clear definition of how far you have to travel If you have a job you can't deduct the cost of getting there unless you travel a certain distance.
19) Union Dues and Initiation Fees: union and professional associations, working dues. But, of course.
20) Wardrobe: specialized costumes, dancewear, uniforms, footwear, etc. Your black chucks, if you use them just for work, are deductible. Same could be said for comfortable shoes if you put them on at work. For example; back at Radio CIty we would often have five and six show days. You're on your feet a lot. If I bought shoes and kept them at the theatre and changed into them for work, that would be a deduction. If I also wear them to the mall, they're not.
21) Out-of-Town Employment or Audition Expenses: lodging, air/bus/train fares, telephone, Wi-Fi, meals, laundry, tips while working or looking for a job away from home overnight. Well this is the motherload of deductions. If you maintain a residence and you are away from it for a job, then almost everything you eat, buy, travel in, see - is deductible. Check the list below under Keeping Very Good Records for some suggestions.
Here is the list from Actors' Equity of what is not deductible.
Here is a list of what is NOT deductible:
1) Gym Memberships: unless it’s a specialty dance or educational studio where you’re taking classes to stay in shape, it’s not going to reduce your income tax.
2) Hair Cuts: maintaining your look for auditions or to keep up with that 5-year-old head shot is just not a business deduction. If you get a gig, however, go right out and get that look spruced up and take it off your taxes. It’s for the employment contract and only if your employer does not provide hair and other grooming services for your role.
3) Hair Coloring: Same deal here. Maintaining the color or colors of your best style won’t be any kind of deduction unless you’ve just gotten a job and you can then justify the color and style for the work you’re doing — if that’s what you need to use on the job. If the employer provides hair care, you’re out of luck with this expense.
4) Makeup: You already know the answer, right? Unless you have an upcoming employment contract, you can’t really justify replenishing your makeup kit, so wait until you do get a gig and go right out and stock up with what you’ll need at the theatre. If you’re going on a set or other job where they’re doing your makeup, you might only be able to justify some of your costs.
5) Cosmetic Surgery and Dentistry: These are not even deductible as medical expenses unless they are performed to correct an accidental, congenital or traumatic disease or defect. The exception might be someone who does dental product commercials. Maintaining your smooth skin or bright teeth is simply part of good grooming, according to Congress.
6) Audition Clothing: If it’s suitable for wearing on the street, it’s not deductible on your tax returns. Only specialized clothing, dancewear, costumes, uniforms and the like may be taken as business tax deductions. Cleaning and laundering your own clothing used on a set or in a show is fully deductible – just not the cost of the clothes themselves.
7) Over the Counter Medicines and Supplements: even those recommended and prescribed by your physician are not considered medical deductions if they can be purchased over the counter. So, those baby aspirin, antacids, anti-reflux products, vitamins and other doctor-recommended items are on your dime and not on your tax return.
8) 100 Percent of Equipment for both business and personal use: this includes your phone (if you only have one phone and one line) and your computer (if you only have one of those, too). You must apportion your time and business use to see what percentage of the time you’re using these items for business purposes. It’s not easy, but we recommend keeping a log for one week in every calendar quarter and then averaging the 4 weeks to see what your business use is. If you have a land line, your cell may be considered 100 percent. If you also have a tablet or notebook, that second computer may be taken 100 percent on your returns. If you have any questions about these or other tax matters, stop in your nearest VITA office. The New York City office is located on the 14th Floor of the Equity Building, 165 West 46th Street. Hours are 10:30 a.m.-4 p.m., Monday, Wednesday, Thursday and Friday, or by phone: 212-921-2548.
Keeping Very Good Records!
For some expenses the IRS will allow you to use a check as your backup for an expense but for most they're going to want a receipt. Being a stage manager this should not be a problem for you. Most stage managers I know are detail oriented people. We have file boxes and file folders, in my case, in alpha order with all category tabs on the left side of the folder. It can get unwieldy at times, but keeping receipts for everything is a must if you wan to avoid paying more taxes than you should. I've also found, with the advantage of Bill Pay by my bank, I can also download an entire years worth of expenses. This allows me to go back and deduct all the mortgage percentages, heating and electrical expenses, water expenses, etc. those that I don't receive a paper bill from the company. Most companies are trying to eliminate as much paper expense as possible and this is another way to track your costs for an accurate deduction. It's also a very good way to see how you spend your money which if you're not a saver (which I struggle with) helps you understand what your deem to be your priorities. If you ever wanted to look at what you value in life look how you spend your money over the course of the year. If you have all of your receipts in one place it should be very easy for you to compile them, and in my case, turn them over to my accountant.
You must account for your per diem income or you must pay taxes on it!
This section is not culled from Actors' Equity but is culled from my experiences of being on the road and audited on several occasions. Keep very good records. Here is an example; I spent a good part of my career on the road. I mentioned above that nearly everything on the road is a deduction. So, based on some information from my touring colleagues, I bought a "Day at a Glance" day planner. I also purchased a small stapler that I would carry with me at all times (or as reasonably all times as I could be). For every purchase I stapled the receipt on the day I purchased it. If it required further explanation I would write it down next to the receipt in the planner as well. What you have at the end of a year is a day planner that can no longer be shut because there is so much paper being stapled in it. At the end of an entire year of being on the road you will have in evidence, all of your expenses. It is not unusual to be deducting ten's of thousands of dollars from a year on the road. I was audited three times when coming off from road from different productions. My accountant was able to just "show them the book of receipts" to close the case.