As a voice-actor running your own business, it’s important to keep track of your income and all applicable taxes you owe your government. Although this is not an easy task, you’ll see that keeping books is part of the gig when you’re your own boss.
Are you a master at saving receipts? Good, If not, get into the habit. Remember when working as your own business, you may have had to pay for things that were needed in direct correlation with you getting paid for a job. This does call for some creative thinking at times: what can be a tax deduction?
- Work with a professional: We encourage you to work with an accountant before making any decision. They can help you check your local tax laws to make sure that what you are doing is acceptable and goes with your business core. Looking for an accountant that specializes in freelancers or small business owners makes sense. Ignore the idea that a good accountant can be expensive, this investment can save you a great deal of money, let alone headaches.
- Commit to solid recordkeeping: Usually, tax systems are based on a flow where you pay your taxes as you earn your money. Like any other freelancer, you have many sources of income. Keeping track can be difficult but it will save you time and stress in the long run.
- Itemize and record your business expenses: You can write-off expenses that are ordinary and necessary for the operation of your business: Business-related foods, lodging, office expenses and required equipment are part of the list. If you traveled to a conference, airfare, meals, and conference ticket are expenses to write-off. If you’re learning (coaching session or online/offline course), your educational costs may be tax deductible. If you have a website, the domain, hosting, and other website related expenses can be written-off. If you pay subscriptions or other fees to market your voice and the services you offer, such as your subscription to Voice123 😉 , you can deduct them. If you are tech-savvy, you may want to use services such as Wave, Quickbooks or Xero, these enable you to scan receipts and attach them to the expense. If you are not tech-savvy, make sure you have an organized folder, excel sheet for every month of the year.
Avoid problems with the tax entity of your country by keeping business and personal expenses separate; follow this advice and make sure you have a professional accountant that can help you on how to structure your business and personal finances to lower your future tax bills.
A home office that is not separate from other areas of living and entertainment space may not be considered a tax deduction. For example, if you record in a porta-booth in the same room as your television or bedroom.
The key is that deductions have to tie in directly to your income, meaning that you had to pay for it to do your job to make the income. These are tax deductions we know voice-actors/actors list because they are directly related to their income:
- Headshots – marketing expense
- Paying for pay-2-play sites – marketing expense
- Getting demo produced – marketing expense
- Memory upgrades, flash drives, new computers, subscription services – equipment
- Studio and equipment rental – things do break down, and we all have to buy the proper tools to get work.
- Promotional materials – did you pay someone to do work for you, in order to get work?
- Working from home costs – internet, cell, electricity and materials directly related to operating costs of your voiceover business.
There could be more, but this is why we suggest: save all your receipts, and hire a professional to do your taxes. They pay attention to changes in tax laws, and updates. It also is not a bad idea to shop around for someone to do your taxes. Tax accountants may get complacent with handling your taxes, and some accountants may be more aware of new deductions than others. Regardless, make sure it’s someone you trust.
Note: In the United States, less than 2% of people paying taxes ever get audited, you don’t want it to happen to you. Trust us: you don’t.
(Also, keep in mind we’re referring to the situation in the US; if you’re based in another country, the situation as described above may be entirely different.)