Normally I have my taxes done at this time, so I’m beginning to feel antsy. I do them by hand with pen on paper forms because I think it’s un-American to have to pay someone for the privilege of paying my taxes. I’ll consider the free fillable forms if they’re easy. But even though I’ve tackled Schedule C with previous businesses, it’s been a while and I had a whole set of questions.
After spending some quality time at irs.gov, I was still confused, but a call to the IRS got me a reasonable wait time and all my questions answered by a friendly and informative agent. My only complaint is that if they’re going to put me on hold for 15 minutes, they need more than one thirty-second song loop. At least it was so forgettable that it’s not stuck in my head.
My questions hinged on the situation that I’ve been an artist for years, with all the same expenses, and I’m selling art I made before going pro. I had planned ahead and kept all my receipts. So can I deduct old expenses? Sometimes.
If you’re in my situation, of course you’d better get your own advice, but what I came away with was that I can deduct any materials when I sell the painting if I put them in the cost of goods sold section. I think the idea is that whether the paint is in a tube or smeared on paper, it is still inventory until I sell it. I’ll calculate the average cost through the ridiculous method of counting my paintings and then squeezing my paint tubes to see how much is left. It seems so silly since my per painting cost is going to be very low (the price mostly pays for my time, creativity, and experience), but when I shell out $50 for pastel pencils for a business, I deserve a deduction somehow.
I can deduct my art classes, books, trade magazines, advertising, and home office (studio) expenses, but only starting from when my business began in earnest.