Guest blogger Luna Jaffe offers 4 money-savvy tips for artists on Finance Fridays during the month of October.
Write a note on every receipt if it’s not completely evident what the expense was for. Also write on your credit card and bank statements so you remember what you paid for.
The IRS loves notes, paper trails, and supporting documentation.
Going to visit a client and want to write it off? Attach info about the client to the receipts for the visit: their address, what you talked about, and how they paid you (if they did).
If you attend a conference or seminar, attach an agenda to your receipts. If you are spending 10 days in Hawaii, but only have documentation that 3 days relates to your business, then the IRS will call the other 7 days vacation—and your hotel, food, and car will not be a deduction.
Instead, document that you were painting each day or talking with galleries. Keep these together and the IRS should have no question that you were doing business.
Peace of mind! If you get audited you can sit in the corner and meditate rather than wringing your hands and sweating profusely.
You'll also avoid fines and penalties, and feel good that you handled it so well.
©2011 Luna Jaffe. Luna is the CEO of Lunaria Financial, Ltd. Her background as a professional artist and psychotherapist richly inform her work helping clients achieve their financial goals. She offers investment management, financial planning, money coaching, and classes. Securities and advisory services offered through KMS Financial Services, Inc. Member FINRA/SIPC.