I am having trouble finding info on this. I have found what paperwork may be necessary but need help. For s part-time artist how would I go about reporting taxes on earnings?
I charge $15-$50 depending on size of piece and this year will be making enough that taxes should be done for it. I have read that I should just keep a notebook with the info i.e price, date. Is this true?
I do not want to make a mistake and have the IRS think I am selling crack or something.
I’m not an accountant, but I used to be self-employed as a consultant.
I’m assuming you are a self-employed artist, so your gig and my former gig are not all that different in the eyes of the IRS.
You will need to estimate your earnings and then pay quarterly installments to the IRS using form 1040-ES.
Keep records of your business in the meantime.
Keep track of all of your expenses (art supplies, vehicle, home office, consultation lunches at a strip club with your clients, paperclips, mileage traveled, etc.) Keep all receipts. These are deductions - i.e. money in your pocket.
Keep clear records of your income as well. Submit invoices to your clients and keep records of payment.
This is, of course, assuming you WANT the IRS to know how you are making money.
It is also worth noting that your state’s revenue service may have an equivalent to the IRS’s 1040-ES form and may be expecting quarterly payments.
You should also be aware that you will be penalized for failing to submit the quarterly payments.
Oh, and there is a self-employment tax as well. You’re going to have to pay it.
You may also want to consider hiring an accountant. This can be a tax deduction as well, so be sure to meet at a pricy strip club and keep your receipts.
Best of luck to you!