Wednesday, June 01, 2005

IRS and the Arts Business

One of the biggest pains to being self-employed in a creative industry is trying to predict how much I’ll make during a given quarter so that I can let the IRS know. If I get it wrong, I get penalties or the IRS keeps more of my money than it should. So when I read this article I thought “so what?” Why shouldn’t an arts business pay its employees and its taxes like any other business?

When I gave it more thought, I realized many arts businesses operate with wildly uncertain income just like the artists they hire. Depending on grants or admittance fees isn’t like selling a product where sales can be predicted more easily.

On third thought, maybe the IRS regulations are at fault…

Here’s a part of the article in the Seattle Post-Intelligencer:

Shakespeare won't be on the playbill when Kent Phillips finishes plans for his theater group's next season. Instead of a 15-player production of the Bard's "Richard II," he is looking into a two-man show by Noel Coward.

Phillips, interim director of the Tacoma Actors Guild and managing director of Bellevue Civic Theater, didn't pull his Shakespeare plans for artistic purposes. He was reacting to news that the state has been auditing other theater companies and fining them for paying actors honorariums and stipends rather than treating them as full-fledged employees.

At issue is the practice among small and midsize theaters to treat some actors, technicians and designers as independent contractors rather than as employees. Theater directors say paying a fixed payment or weekly stipend is a way to honor and at least slightly subsidize their creative work -- and provide a stepping stone to higher-paid Equity jobs -- without completely breaking the bank for community non-profits.

Now, they say, the state is telling them that workers should be classified as employees, meaning they should pay an hourly salary of at least minimum wage, plus contribute to the state's unemployment and workers' compensation funds.

For the complete article follow this link:

1 comment:

  1. Just stopped in to say hi and to wish you a good weekend..