If you’re an artist or freelance creative, tax season probably isn’t your favorite time of year.
In my years as a tax preparer, I had more than one client who would literally bring me a shoebox full of receipts, pocket calendars, and tax forms every February. It’s not uncommon for creative brains to get overwhelmed by the tedious (and sometimes labyrinthine) process of preparing taxes.
And it’s not your fault. The U.S. tax system simply wasn’t designed with artists in mind. Fluctuating freelance income, multiple gigs, and creative work that doesn’t fit neatly into rigid boxes can make compiling an annual tax return especially challenging.
The good news? There are ways to make tax season less daunting. So if you’re staring down a cluttered shoebox and letting out a sigh, the tips below can help you get a solid head start — and make next tax season far less stressful.
How should I keep track of my income?
Let’s start by understanding what’s reportable as taxable income. Artists perform, produce, enlighten, and inspire. Any payments you received for those artistic pursuits of yours are considered taxable income.
Some of it may have been reported to you on a Form 1099-NEC or 1099-MISC. Some of it may have been handed to you in cash, or transferred via Venmo. Maybe you even accept credit cards or bank transfers. Regardless of how you got that money, it’s reportable as income.
Spreadsheets are your friend here, and this one doesn’t have to be complicated. With columns for Date, Payer, and Amount, you can sort and filter as needed.
You don’t need to be too detailed (total up your daily sales at the art fair, or your daily teaching income). As long as you have individual transactions recorded elsewhere like Square, Acuity, or Quickbooks for audit, sales tax, or customer service, you’re fine aggregating your income here.
Want a head start? Download our Tax Time Tracker for a sample.
You Are Not Alone.
The vast majority of freelance artists in the US are “sole proprietors” who report creative income on their personal Form 1040, on Schedule C.
An NEA study in 2019 showed that, out of all independent self-employed workers in the US, a whopping 22% were freelance creatives.
If you have incorporated your business, this article still applies, though the reporting requirements will be a little different.
I received a grant. How do I report it?
Congratulations! It’s great to have your work validated and funded.
Grants can require special treatment at tax time. The good news is that the organization that provided the grant should be able to provide you with some basic guidance. It’s also likely that you’ll receive a Form 1099 that gives you more information.
The big question here is whether your grant (or fellowship or scholarship) counts as self-employment income:
- If the grant requires you to produce, perform, or teach, it’s probably treated as income subject to additional self-employment tax.
- If the grant is an award that comes with “no strings attached” it could still be taxable, but may be reportable as “Other Income” that is not subject to self-employment tax.
There is nuance here, and the potential for tax-time surprise is high if you’re not sure.
Before accepting a grant—especially a lump-sum payment—it’s worth asking the funder how the income will be reported and what tax forms you should expect.
If anything is unclear, a tax professional can help you understand your options and avoid surprises later. Also the IRS offers an interview-style Assistant on the topic Do I include my scholarship, fellowship, or education grant as income on my tax return?
Forms, Forms, Forms.
They start showing up in your inbox and mailbox around January 15th. W-2s, K-1s, many flavors of 1099s.
The IRS calls them “information returns” and their purpose is to alert you about payments that have been reported to the IRS. If you don’t include them on your tax return, the IRS will contact you about any discrepancies, and that can be the first step toward an audit.
Pay particular attention to 1099-NEC (Non-Employee Compensation) and 1099-MISC (Miscellaneous Income) forms, because they are records of payments to you that are likely self-employment income.
How should I keep track of my expenses?
The underlying question here is always “Can I deduct this?” The answer is “it depends.”
Some expenses are slam-dunk deductible:
- Raw materials that you transform into saleable art
- Costs for hosting your portfolio website
- Rent for studio or rehearsal space
Others live in more of a gray area:
- Costumes, shoes, and other performance apparel
- Mobile phone costs
- Costs to maintain an office, studio, or rehearsal space in your home
- Coffee and pastries to fuel you when you wrote that grant application
Generally, deductibility depends on intent: if your purpose for spending the money is that you believe it will allow you to generate taxable income now or in the future, you have a strong case for the expense to be deductible.
But here’s the key: every expense should be tied to a receipt.
Many artists use simple, low-cost apps that link expenses directly to receipts, such as Wave, Smart Receipts, or Giggy Bank. Or, you can use a spreadsheet.
We’ve included a sample in our Tax Time Tracker. Columns for Date, Vendor (who you paid), Amount, and Expense Category are necessary, but I also like a Notes column where you can keep track of things that will remind you of why you made the expense.
Word to the wise: If you rely on a spreadsheet, you’ll still need a system to keep receipts organized: expanding file folders or color-coded envelopes in a plastic storage bin, for example.
Or, you can take a photo of your paper receipts and file them away in a digital archive, like a folder organized by year and month!
What receipts do I need to keep?
All of them. Next question!
Seriously, having documentation from the person or company you paid in order to substantiate your deduction is important.
Receipts should be kept for a minimum of 3 tax years. In the event of an audit, you could be asked to produce receipts for up to 7 prior tax years. This means that after you file your returns for 2025, you can safely get rid of receipts from tax years 2018 and prior.
However, you should hang on to any receipts related to the value of any significant asset or piece of equipment that you still own, because you may need to verify its cost basis if and when you sell or dispose of it.
Borrow our Tax Time Tracker Template
Download or make a copy of this spreadsheet template to log your income, expenses, and mileage.
We advise setting aside 30 minutes every two weeks to review your finances and record it all to avoid the year-end scramble!
What mileage actually counts, and how can I track it better?
If you traveled (by car, plane, bus, boat, Lyft, or horse-drawn carriage) with the intent to increase your taxable income, you can deduct the cost of that transportation. It doesn’t matter whether the trip directly increased your income in the current year.
For example, mileage driven to shop for a piece of equipment that you won’t use until next year, or to meet with a prospective customer, still counts as deductible. And yes, you can deduct the cost of returning to where you started from too.
With car expenses, you have two options for calculating your deduction: actual expenses, or the standard mileage rate. Both options require you to keep clear and accurate records of your mileage, however. And regardless of which methods you choose, you can also deduct parking fees and tolls in addition to mileage.
There are plenty of mileage tracking apps available that make this job simple. Some allow you to differentiate your business mileage from your personal mileage right in the app. Popular mileage tracking apps for artists include:
If you prefer not to use an app, a spreadsheet again comes to your rescue. Make sure to have columns for Date, Starting Mileage, Ending Mileage, and Destination. An extra Notes column is always good to provide a little description to jog your memory.
Should I Incorporate?
“Art business” might not be how you choose to describe your creative work—but that’s how the IRS views it. Depending on where they’re at in their practice, some artists choose to incorporate, forming their own LLC or other business entity.
Incorporated businesses have access to some tax benefits, but there are additional costs and reporting requirements that come along with them. Processes for getting started vary by state. A service like LegalZoom can help you figure out whether incorporating is right for you.
How can I avoid a huge tax bill in the spring?
As an artist, your income might fluctuate unpredictably. But if you commit to recording your income bi-weekly, you’ll get a sense of how you’re doing compared to the previous year. This knowledge is your best instrument to keep you from playing the blues about a nasty April surprise.
If you find yourself earning more than in a previous year, you have some options:
- Pay quarterly estimated taxes using Form 1040-ES
- If you work as a W-2 employee at another job, adjust your withholding so that more taxes are withheld
- Near the end of the year, defer income by asking your customers or clients to pay you in the new year
Keep track of any withholding and estimated tax payments you make. To avoid underpayment penalties, make sure that this amount, by the end of the year, is greater than or equal to the previous year’s tax (including self-employment tax).
Checking in on this quarterly—and adjusting as needed—can make tax season far less stressful. The good news: estimated payments are flexible. You don’t have to pay the same amount each quarter, and you can change course as your income changes.
Know What You Need to File and When
Of course, your annual Form 1040 may be only a part of your tax universe. Many states (and some cities) also require you to file income tax returns. Sales or use taxes may apply to some or all of your artistic income. If you pay subcontractors or other freelancers, you may have to file Form 1099s (and Form 1098) yourself.
It’s important to know what taxes apply to your specific situation, and what the filing requirements are.
When—and where—do I ask for help?
If you find yourself lost in the thicket of regulations, guidelines, and all the “expert advice” you can find online, asking for help is never a bad choice, even on April 14th. Some great online resources for artists include:
- IRS Publications are not as dry and unreadable as you might think. Specifically check out the Tax Guide for Small Businesses, which is updated annually to keep up with new tax laws.
- The IRS also offers a free online Tax Assistant, which is a question-and-answer interview style service that helps you apply the laws to your situation. Relevant topics include Do I include my scholarship, fellowship, or education grant as income on my tax return? and Am I required to make estimated tax payments?
- By and large, income tax software such as TurboTax does a great job of helping sole proprietors like you file your taxes. It can help you identify deductions and make sure all of your forms are properly filled out.
For more advanced tax planning and advice, you can’t go wrong with a professional preparer who can understand your individual situation and help you meet financial goals while actually cutting your taxes. Believe it or not, many consider their work to be creative and artistic too!
If you’re thinking about taking this step, check out Accounting and Financial Services for Artists from Fractured Atlas for guidance on cultivating your financial support system.
Progress Over Perfection
Making tax time easier doesn’t require perfection, just a few steady habits built over time.
When you track income and expenses as you go, you’re not just spreading out the paperwork; you’re gaining a clearer picture of the money that supports your creative work. And these simple routines can make the financial side of your practice more sustainable, now and in the years ahead.
Less tax scrambling, more creating—now that’s a masterpiece in progress.