Weekly Creative Biz Note #8

Invoices, Bills & Taxes--But I Thought I was an Artist?!

All I can say is,"Uggghh!" Most artists despise even the thought of doing number crunching and taxes. But it must be done and completed accurately to survive as an individual artist or company.

It took me awhile to figure it out but a good accountant can save you a ton of money! I was advised to incorporate as opposed to being self-employed. You negate the self-employment tax and can simply lower your taxes. I wish I had known this many years ago. Also, for small companies with no employees (owners only) a 401k can be opened for as little as $180 per year. You can shelter up to $49,000. If you have one employee, the you can start a 401k this year and qualify for a $500 tax credit for each of the first three years--that's $1500! This pays for the set-up and administration costs. Plus shares in the market are down. Talk to Chuck at Schwab--currently they do not charge for consultation. Another point if you decide to incorporate, there can be inexpensive lawyer and business permit fees but it's all worth it.

Self-employed artists should try to set-up a retirement plan--an IRA, SEP or Keogh. A SEP-IRA helps you save for the future and also defers taxes. You can contribute up to 25% of your income.

As for invoicing and bookkeeping, I recently purchased QuickBooks. It's awesome and user-friendly. I had tried using Quicken and it was above my head and not intuitive to me. It has to be easy or I start pulling my hair out! You can even hire accountants that use QuickBooks to come to your office and teach you--nice! Not that you'll need it though. I watched a few tutorials and jumped right in. Credit card statements load right in from my bank and I now print checks from QBs. I altered the QB templates for estimates and invoices and now I'm more organized than ever. After all my research and swearing, I highly recommend QuickBooks for artists. Look for software discounts. Now, tax-time is a much happier situation--especially for my accountant!!

I'm keeping this short--if anyone has anything to add or has a question--please do so!

Next Creative Biz Note #9---Pulling Creative Ideas from Your Brain
(Feel free to comment or click a reaction box)