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Doing your own accounting...

 
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McCloudVoice
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PostPosted: Tue Oct 23, 2007 8:42 pm    Post subject: Doing your own accounting... Reply with quote

Otherwise entitled: I just got my first paid gig, now how in the world do I report this and what am I going to have to pay?

Just booked an industrial/promo type video for a national client. It's going on the web and is to be shown at a large conference in Las Vegas.

I booked it non-union as I am still not AFTRA, so I'm sure they got a bargain... but I still came out of the hour-long session financially better off and with some very satisfied clients.

Exactly how does this work with 1099'ing on your taxes? What and how do you pay? I know none of you are probably CPAs, but some advice from fellow talent would be greatly appreciated.

(And my sincerest apologies for being a newb.)

Thanks!

Dave
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bobsouer
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PostPosted: Wed Oct 24, 2007 4:17 am    Post subject: Reply with quote

Dave,

The 1099 will come to you after the first of the year. And you won't even get one unless this client ends up paying you $650.00 or more for the year.

Regardless, and assuming you've not formed a corporation for your business, you'll report this income (whether or not you get a 1099) on Schedule C of your long-form 1040 tax return. Keep track of your expenses (mileage to and from the job, marketing expenses, etc.) which you'll deduct on your Schedule C from your freelance income to get your net income (or loss) which will then transfer to the designated line on your 1040.

More likely, your accountant or tax preparer will take care of all of this for you, but keep written records of everything.

I'm not a CPA nor a tax attorney, but I did stay at a Holiday Inn Express for a week earlier this month. (And I've had my own voiceover business since 1983.) I hope this helps.
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Lizden
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PostPosted: Wed Oct 24, 2007 5:00 am    Post subject: Reply with quote

Dave,
No apologies needed: CONGRATULATIONS on your gig!

Everyting Bob said, is spot on.

In terms of what will you have to pay to Uncle SaM, what I do is put aside 30% of whatever I get paid into a seperate bank account that I have designated for taxes, and don't touch it. That way at the end of the year/each quarter I have that money already set aside for taxes. Now you can put aside much less if you want, (depends on your tax bracket) that's just what I do, but by doing this automatically with every check/payment I get, I don't feel the bite nearly as much as having to "find" that money in April.

Just an idea....and like Bob...I'm not a CPA nor a tax attorney, NOR did I stay at a Holiday Inn Express for a week earlier this month! Wink

Now go talk! Laugh

Liz
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Jowillie
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PostPosted: Wed Oct 24, 2007 8:17 am    Post subject: Reply with quote

Quote:
put aside 30% of whatever I get paid into a seperate bank account that I have designated for taxes, and don't touch it.
That + Bob's advice = get you headed in the right direction.

Plus.. a Tax Lawyer with a background in intellectual property rights should secure most super successful VO businesses...like yours is becoming.
These are wonderful things to think about. You don't pay taxes unless you are earning money. (Is my Neti pot deductable?)
Willie E.
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JimRon
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PostPosted: Wed Oct 24, 2007 9:20 am    Post subject: Reply with quote

Quote:
what I do is put aside 30% of whatever I get paid into a seperate bank account that I have designated for taxes,


smashing idea liz!

( i, too, am not a CPA or tax attorney, nor did i stay in a Holiday Inn Express, but i can't get enough of that Golden Crisp.)
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tackerman
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PostPosted: Wed Oct 24, 2007 9:40 am    Post subject: Reply with quote

I too set aside 30%. I also retain the services of a professional tax atty. I HIGHLY recommend it. Wink
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ccpetersen
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PostPosted: Wed Oct 24, 2007 9:49 am    Post subject: Reply with quote

Do look into the paying taxes quarterly thing -- if you make a lot of money throughout the year, the IRS can come back and claim you didn't pay enough in any one quarter and will sock you with interest and/or penalties. I do quarterly taxes including FICA and it all seems to average out pretty well; that 30 percent figure is a good thing to aim for setting aside.
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Rognog
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PostPosted: Wed Oct 24, 2007 11:06 am    Post subject: Reply with quote

I recommend the quarterly tax payment plan as well. You can budget for it in advance and it stings a lot less when you have to pay up in April.

To keep track of my day-to-day expenses I keep a form in my day book where I can write down any auditions or gigs I have and all the expenses including mileage, tolls, parking, mail, supplies, and classes/seminars/interviews. I enter it into a Excel spreadsheet at the end of every month and let it Autosum the numbers. I print it out and hand it to my accountant every year and it's a HUGE help.
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Jeffrey Kafer
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PostPosted: Wed Oct 24, 2007 11:12 am    Post subject: Reply with quote

I'm not an CPA, but here's a thought:

Don't pay any of the taxes at all. When the time comes, the IRS will let you know what you owe. And you only have to pay some back fees and penalties for the convenience of your own personal audit!

Seriously, get an accountant so you do it right. Or at least consult with one for the first year or two.
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Lizden
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PostPosted: Wed Oct 24, 2007 11:15 am    Post subject: Reply with quote

JeffreyKafer wrote:
I'm not an CPA, but here's a thought:
Don't pay any of the taxes at all. When the time comes, the IRS will let you know what you owe. And you only have to pay some back fees and penalties for the convenience of your own personal audit!


He's KIDDING, Dave!!!! Rolls Eyes

L.
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ccpetersen
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PostPosted: Wed Oct 24, 2007 3:28 pm    Post subject: Reply with quote

As one who has been audited twice (both times random audits), don't let the IRS figure it for you...

Wink
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melissa eX
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PostPosted: Mon Oct 29, 2007 8:27 am    Post subject: Reply with quote

Dave:

Now's the time to look for an accountant who's well versed in freelance/creative businesses. There may be a lot of Schedule C deductions you can legitimately take that an ordinary (think tax preparer mills) accountant won't even think of - it's all in the details. You may want to consider an EA (enrolled agent). They specialize in taxation, are federally licensed and have to go through testing and background checks by the IRS so they usually know a lot more about the ever-changing details in the tax code than other CPA's.

Congratuations! Hope you'll have the need for a good tax professional! The more you make, the more complicated it gets!
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