With tax season approaching, you might be starting to think about how to lower your tax liability. If you’re an artist, you might be wondering: Can you write off your art expenses?
You can write off art business expenses, but you can’t write off art hobby expenses.
Before we get into it, let me first just say the obvious: I am not a tax attorney & this article is not legal or financial advice. Please – use the information here to start a conversation with your tax advisor.
Art Business vs. Art Hobby
You can write of the expenses from income earned on a legitimate business whether it’s your full-time business or part-time side hustle. The key word here is: “legitimate business.” Legitimate businesses earn a revenue. They create, market and sell goods and services. They are able to write of the expenses they incur in the course of conducting business.
If you are a legitimate art business, typical art expenses include supplies, materials, studio costs, utilities, equipment, classes, software, marketing, insurance, shipping, travel, and independent contractors like designers, bookkeepers or attorneys. There are a million ways you can invest in your art business, and most of them would be considered an expense.
The IRS is savvy. They know there are a lot of taxpayers who make art, but are not really trying to create a profitable business. Some of these taxpayers would love to claim their art expenses as tax deductions. And who wouldn’t? Creating art can be very expensive. Even though there’s nothing wrong with making art as a hobby, the government doesn’t want to help pay for it.
Fair enough, right?
So here’s how they handle it. The IRS defines a hobbyist as those who fail to make a profit through art in three out of five years. If you’re a hobbyist, you can’t write off any of your art expenses.