When I am teaching a clown class, lecturing for a workshop or just mentoring a new clown I love to ask this question; “why do you want to become a clown?” All too often the answer is, “why to make money of course.” While there is absolutely nothing wrong with clowning to make money, I do encourage folks to look further into the life of the clown as it is not always highly rewarded in a monetary sense. The desire to make people happy should be the root of your pursuit of clowning and if you are good, money should follow. The other idea some have is a big tax write off for their entertaining services. Let’s take a closer look at the possibilities of earned income and tax deductions for your clowning career.
Can volunteers get a tax break?
Many folks who clown do so for their churches, children’s schools or a charitable cause, these are absolutely noble reasons to clown but do not necessarily warrant one to write off any supplies on their income tax. If you can’t really show a history of getting paid for said talents it can be difficult to ask for a tax break from the IRS. For example, just because you take nice snapshots of your kids does not mean you can get a write off on photo supplies if you take some pictures at a charity event. If the reason you are performing for a charity is to get some sort of tax break, may I suggest you just make a monetary donation that can be recorded as such and claim that on your taxes.
Being in business.
If a person goes through the steps to start a side business to provide a service, tax write offs now become more of a reality. Registering for a DBA ( doing business as) is quite affordable and not very complicated. This is about the easiest way for an individual to create a side business, charge for services and eventually write off some of the expenses. Again, if your main goal for clowning is to just write off the cool stuff you buy, you really are not headed in the right direction. However, if you do wish to peruse this as a legitimate side business then by all means take the opportunity the law provides for proper tax deductions.
What do I write off?
Many things can fit in the write off category once you start earning income at your side business. Mileage to and from the location where the service was provided, mileage to get supplies, supplies and equipment to carry out said tasks just to name a few. Money spent on literature which pertains to the services you provide, such as clown magazines or club dues also are legitimate deductions.
What not to write off?
Be wary of trying to write off pleasure items as a business expense. In other words don’t try and impress your friends with a fancy luncheon or a night out on the town on your small companies tab, this easily can raise the eyebrows of the IRS. Stick to the basics discussed above and you should do fine.
Ask the professionals:
Having an actual CPA or trained tax preparation service can help you discover what best works for your personal situation. You may discover things to write off that were not obvious to the untrained eye, also you will hopefully receive help better preparing for your next years tax season. I am fortunate that I have a CPA who is also a fellow clown, he certainly has given me valuable insight into the world of entertaining and the proper tax deductions available.
We hope this has proven to be helpful as you plan out your business ideas for the new year.