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Rich Responds - Part Two

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Rich continued.  It was kind of impressive to see how many ways he could think of to help Art.  Art was clearly becoming relaxed, really relaxed.
  • You are allowed and expected to deduct your professional expenses and only pay taxes on your “net”.  Going forward, you will need that separate bank account AND a tool to help you track your income and expenses (e.g. Quickbooks).  Going back, do the bank statements have copies of the checks?  Did you pay anything by credit card?
  • Worst case, again, we estimate – how much paint do you “consume” in an average painting?
  • Other expenses – we can deduct your roundtrip business mileage to NYC.  How many times did you drive there?  Supplies?  Courses? Memberships?
  • Is your studio part of your residence?  We still may be able to take a “home office deduction” if it qualifies.  Or was the studio a separate location?  Do you have storage fees? 
  • What % of your phone do you use for business?
  • Do you pay health insurance?  That is a deduction.
  • How did Katya pay you for your maintenance work?  Might you have received a “W-2” for that and had taxes withheld?
  • What is your best projection for this coming year’s sales?  With artists especially it is always a crapshoot.
  • You should plan to save between 30% and 35% of each art sale for taxes, and we will set you up on an “estimated tax plan” for next year.










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