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Tax Season For Artists & Creatives with Jeffrey Thompson- Circuspreneur Podcast Ep.94
24 Plays5 months ago
#TaxSeason #Creatives #Freelancers #TaxPrep #Circusarts
Event Announcement :
Welcome to the Nevada Labor Commissioner Circus & Cirque Arts Industry TownHall! Join us at the Nevada State Business Center- Department of Business and Industry for an exciting in-person event. This town hall is your chance to engage with the Nevada Labor Commissioner and discuss important issues within the circus arts industry. Don't miss out on this unique opportunity to have your voice heard and make a difference. We are so fortunate to have special guest Founder of Amazon Labor Union Christian Smalls joining us. See you there!
Nevada Labor Commissioner Circus Arts Industry TownHall Thursday, January 23, 2025 11:30 AM - 1:00 PM PST
EVENTBRITE RSVP In-Person BELOW Required (Seats Are Limited)
https://www.eventbrite.com/e/nevada-labor-commissioner-circus-arts-industry-townhall-tickets-1141627250839
Connect with Jeffrey Thompson:
https://www.jeffthat.com
On this episode of the Circuspreneur Podcast, host Shenea Stiletto interviews Jeffrey Thompson, MA, MBA, EA, USTCP, a tax professional as well as a writer, actor, and magician member of the Magic Castle. In addition to filing taxes for a little over 400 clients each year, he serves as an artistic director and board member for Improv Theatre, teaches at the Westside Comedy Theater, and serves on the board of The Ruby LA and The Improv Network. He has also previously taught psychology at Citrus College and given lectures to artists at CalArts and Cal Lawyers for the Arts and for the City of Santa Clarita and County of Nevada.
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Transcript
Intro and Platform Info
00:00:04
Circuspreneur Podcast
This podcast is also available via stagelink.com, the groundbreaking new platform for live performing arts. Please support the podcast by liking, subscribing, commenting, and tagging the podcast. It helps us to continue to bring the industry high level content.
Guest Introduction: Jeffrey Thompson
00:00:19
Circuspreneur Podcast
I'm your host Sinead stiletto and my guest on today's circuspreneur podcast is creative professionals tax accountant Jeffrey Thompson. Welcome to the podcast Jeffrey, also known as Jeff.
00:00:32
Jeff Thompson
I'm so happy to be here. And yeah, Jeff, Jeffrey, um you know, I don't, sometimes I want seven letters, sometimes I want four. Sorry, I can't choose.
00:00:43
Circuspreneur Podcast
You are so fabulous, Jeffrey.
Creative Tax Issues Overview
00:00:45
Circuspreneur Podcast
And I want to tell listeners a little bit about you before we get into this wonderful creative tax episode that so many of us hunger for and need. And I can never get enough about, and I get like sometimes almost the most questions about the tax topic, also the Filing for unemployment topic as well on the podcast. So I'm so excited to do this this little kind of um You know ah short, you know um ah Kind of little podcast episode around taxes. I know that we can just kind of like
00:01:20
Circuspreneur Podcast
ah speak about taxes all day, every day, and
Jeffrey's Multifaceted Career
00:01:23
Circuspreneur Podcast
that there is even more information that we're not going to be able to cover in this, Jeffrey.
00:01:23
Jeff Thompson
Yeah.
00:01:27
Circuspreneur Podcast
So thank you for you know putting so much info into a short amount of time. And for listeners, Jeffrey Thompson has an MA, MBA, EA, and the USTCP is and is a tax professional as well as a writer, actor, and magician member of the Magic Castle.
00:01:44
Circuspreneur Podcast
In addition to filing taxes for a little over 400 clients each year, He serves as an artistic director and board member for improv theater, teaches at the Westside Comedy Theater, and serves on the board of the Ruby LA and the Improv Network.
00:01:58
Circuspreneur Podcast
He also has previously taught psychology at Citrus College and given lectures to artists at CalArts and CalLawyers for the arts and for the city of Santa Clarita and county of
Living and Working in LA During Fires
00:02:11
Circuspreneur Podcast
Nevada.
00:02:11
Circuspreneur Podcast
And you are in the midst of a lot right now, Jeff, because you are in California in l LA and I really appreciate you coming on during everything that's happening with the fires um You know, you've been you know kind of on deck of evacuations and ah things like that And so, you know, I can only imagine the stress that you know, this has caused you recently so I really appreciate you doing the podcast during this really challenging and difficult time and
00:02:43
Jeff Thompson
Yeah, it's you know it's been a crazy year. I think the motto for a lot of creatives was survive until 2025 and we are here in 2025 and we are alive, but ah you know the struggle the the the normal artist struggle has been a little bit more of a struggle.
00:03:00
Circuspreneur Podcast
very well put. And for listeners that ah you know will listen regularly, I e am based in l LA. Normally I'm from California and I have so much family and friends that live in LA and very close circus friends. And so we've all been, you know obviously staying very attuned to what's going on on the podcast. And there have been you know drives to help fellow circus family members and circus colleagues and friends um that have lost everything during this fire and will continue to, you know, ah you know, stay updated if you follow the Circus Prenuer podcast on Instagram. ah You know, I regularly post updates of where you can donate and how we can be best beneficial. And I had a question actually, Jeff, to start that off. um Do you think that there will be any special incentives or things like that around, you know, those that have been affected by the
Tax Extensions and Disaster Relief
00:03:50
Circuspreneur Podcast
L.A. fires pertaining to the tax season that's coming up?
00:03:53
Jeff Thompson
Yes, so this was recently announced. um ah So if you are in l LA, you do have an extension for your federal and California tax returns until October 15th. If you are filing in multiple states, um you should check with the state. Sometimes they still want you to file on time, so you'd need to file an extension. For example, if you had Oregon or New York or you know something like that. um I always say file the extension just in case um but you have that automatic one which gives you a little bit more time to figure things out and organize things. um Another thing is ah there's something called a casualty or disaster loss which is
00:04:45
Jeff Thompson
When you lose a substantial property and so, for example, if you lost your home and the significant amount of that wasn't covered by insurance, normally you would have to wait until next year to claim that loss on your tax returns.
Performing Artist Tax Parity Act Challenges
00:05:01
Jeff Thompson
But now, when you file your 2024 tax returns, which you'd be filing this year, you could claim that even though the loss was in 2025. And you can carry that loss into future years. ah So, you know if you let's just say you lost a home worth you know a few hundred thousand dollars or more because it's Los Angeles and and homes are very expensive, ah you know, you that loss could carry over and help you reduce your taxable ah ah income for future years. So it's not a perfect fix to the tragedy, but it is like a little thing that you can take now and will kind of like ease the financial burden for future years.
00:05:47
Circuspreneur Podcast
Wow, that's so great to hear that there's already something in place that can ease some of the stress you know during this like you know tremendous tragedy.
00:05:57
Circuspreneur Podcast
So that's at least some some good news. um In the midst of everything, we'll take you know anything and everything that we can get.
00:06:00
Jeff Thompson
Yeah.
00:06:04
Circuspreneur Podcast
And it's it's so deserved. So i was I was really wondering and hoping that they were going to put something out you know that would you know assist folks that have been through so much and we're still the situation is ongoing and we don't know when it's going to completely you know settle um at the end of the day and how much longer that's going to take so that's really great.
00:06:23
Circuspreneur Podcast
Another thing that I wanted to just i discuss you know at the start of the podcast as well Jeff is you know prior to the podcast we discussed a bit of legislation and I thought that that was very, um you know, kind of prime time as we just had the inauguration and we are going into a whole new slew of folks that are representing an office.
00:06:32
Jeff Thompson
Mm hmm.
00:06:41
Circuspreneur Podcast
And so there is a very important bill that um is, ah you know, would affect the creative environment um ah tremendously if it were to be passed and it's the Performing Artist Tax Parity Act.
00:06:55
Circuspreneur Podcast
And it has a lot of co-sponsors, as we discussed ah prior to the podcast, Jeff. And so you know I would love to discuss a little bit about that, how it would affect the creative entrepreneurs, um and you know a little bit about what it is, how it affects it, where it went.
00:07:12
Circuspreneur Podcast
um And you know if we could speak a little bit about why you think it's been a challenge to get that past reinstated, because it was a law, and then now it's trying
Outdated Tax Laws for Creatives
00:07:22
Circuspreneur Podcast
to bring it back.
00:07:22
Circuspreneur Podcast
And it doesn't seem like it should be that big of a
00:07:23
Jeff Thompson
Mm hmm.
00:07:24
Circuspreneur Podcast
deal, but I'm curious to hear a different perspective of why it kind of stays on the periphery other than the fact that people just sometimes don't treat the creatives and the arts as important as maybe other industries, which we try and, you know, we discuss that in and terms of how important we are as employees and industries and small businesses and, you know, how we should be taken just as seriously as any other industry.
00:07:50
Jeff Thompson
Yeah, so you know this just comes down. So um I study tax law. um And so I think a lot about you know how laws are made and how they're interpreted. um And so this is just a an example of a poorly written law. Most things ah ah when they come to like numbers and tax law are adjusted for inflation.
00:08:18
Jeff Thompson
So for example, things like the standard deduction or how much you can give as a gift every year, those numbers increase every year because the value of the dollar changes. um So this original law is still on the books. It hasn't been removed or changed. It's just that it was never adjusted for inflation. So the law is If you have two W-2s from performing artists' work, and I believe that you have to have made less than something like $16,000,
00:08:57
Jeff Thompson
um then ah you can take deductions just right on your tax return. You don't have to itemize. You don't need to have a business. It's just a very easy way for performers to deduct expenses related to their performing work.
00:09:13
Jeff Thompson
because as you probably know, if you are listening to this podcast, we have a lot of them. We pay agents, we pay for websites, we like we pay out of our butts for a lot of things, right? And so it was a very easy way to deduct all those expenses, um assuming that your income doesn't exceed a certain amount. um But what ended up happening is because it was, you know, started in the 70s, think about all that inflation, think about like your older relatives who give you like $1 and they're like, they'll spend it in one place, right? ah You could buy 17 packs of gum and a brand new car with that.
00:09:54
Jeff Thompson
um So because it was never indexed for inflation, that number stayed the same. So there's no one that I know who's ever met the, and I've done thousands of tax returns, and I've never once been able to take that deduction, even though I work exclusively with performers. so it should be an easy fix because all you're doing is changing the law and and it should be indexed for inflation. But unfortunately there are so many things as you probably know by
00:10:31
Jeff Thompson
being in America that should be easy fixes uh you know just like hey yeah maybe like um you know it should be in our constitution that like you shouldn't discriminate against people uh and people like no i don't know if we can amend the constitution we've never done that before um so uh you know that's that's the annoying thing um and i'm sure part of it is just like you know performers are not always the like top of mind people who need help, ah even though what we do is of so much value to ah like everyone in the world. like Remember when we all thought that we were going to lose TikTok and like we were all like crying and then we got it back.
Jeffrey's Creative Background and Tax Career
00:11:17
Jeff Thompson
We got it back.
00:11:18
Jeff Thompson
ah so um yeah and i'm I'm happy to talk about like some of the weirdness of that law because I think artist taxes are very complicated but also I can talk about that for like two hours nonstop so maybe I'll just pause for just a second.
00:11:40
Circuspreneur Podcast
Well we will go on to the next topic because like you said these are you know very long-winded topics because I think it shows just like the complex nature especially when it comes to being an artist.
00:11:43
Jeff Thompson
yeah
00:11:51
Circuspreneur Podcast
I mean you can go on on and on and I think it comes back to how important it is to have someone with your perspective Jeff. who is a working creative professional and I did want you to go into a bit of how being a magician informs your work as a tax accountant and you know what kind of um I think difficulties you've been up against yourself did which like which one came first being a magician or you know or you know being a tax professional um you know which one informed which because
00:12:22
Circuspreneur Podcast
Again, I think that your perspective is so unique. and Most times when I'm speaking to industry professionals, I have creatives, they're always like, yeah, but I just can't find the right person. and I just don't feel like they really understand where I'm coming from. and you know This seems just like really complex and they didn't understand the nuance of this specific thing or the travel or being out of the country for a certain amount of time. and I've moved like six times this year. um you know like How do I do that? you know Do I file in this state or do I file in that state? so There's so many questions that consistently come up. And I would think that in 2024, 2025, there would be more folks that are like you, but there still isn't. um And that, again, poses a lot of issues for folks in our industry. And so it's so great that someone like you, Jeff, will can demystify you know even like these kind of misconceptions and myths that I've seen you discuss um you know in other presentations that you've done, which are, again, topics and conversations that are always at the top when everyone speaking to local colleagues or you know trying to give a little bit of feedback myself in support. So again, how did you begin and how did that inform what you do now?
Balancing Creativity with Tax Expertise
00:13:26
Jeff Thompson
Yeah, so ah the magic part is recent. um I started taking classes.
00:13:31
Circuspreneur Podcast
what
00:13:33
Jeff Thompson
ah just I feel like sometimes artists have that like itch where it's like, I want to do a different thing. ah And so the Magic Castle is in LA, they have classes.
00:13:45
Jeff Thompson
um I ah just took some classes and I was like, I want to get good enough to be able to, um you know, audition and become a magician member. And, you know, I worked really hard and then on my first audition, i ah I very clearly, I failed.
00:14:01
Jeff Thompson
ah but But on the third time I finally got it, I passed during the pandemic. So instead of learning how to make bread, I learned how to ah shuffle cards really, really good. um But ah yeah, I mean, I've always had that um uh like uh like simultaneous like brain thing whenever i was like on a collaborative project with friends i would be like the producer uh people just like knew they were just like jeff you you could figure this out i was like oh okay um and uh
00:14:38
Jeff Thompson
it It all really started about like 10, 12 years ago. I had the brilliant idea of starting a theater because I really wanted there to be like more places for people to perform. And so I knew nothing about like running a theater or running a business. I just believed in the dream. um And, ah you know, I filed for nonprofit status by myself. I just like read everything that you needed to do. um And I learned how to do the bookkeeping um and how to do the tax prep. And during that entire process, just from reading everything, I learned a lot. And whenever friends had questions, I would start just being like, oh, like, this is how this is done. And because I was a struggling artist at that time, I was just like, wait a second, can I make money by doing this?
00:15:34
Jeff Thompson
And so i I did what I needed to do to become a California tax return preparer, um took the classes, took the pass the test. um And then there was this next stage, which is called being an enrolled agent, which allows you to represent people in audits and appeals and like collections issues and I was like well might as well try to see if I can do this and then I studied for way too much time and ah then passed that test and then very recently there's a thing called the tax bar which ah allows non-attorneys to practice in the U.S. tax court and I was like
00:16:16
Jeff Thompson
Well, you know, we're on strike right now, so I'm not like really working and like no one's filing taxes. And the tax bar, they only offer it once every two years. So it's like, it's like May right now or June and it's in November.
00:16:34
Jeff Thompson
I might as well just study really hard for this test. And then I passed. So now, am I a tax genius? I don't know.
00:16:44
Jeff Thompson
um And, you know, some some not I've never said it, but some have said.
00:16:45
Circuspreneur Podcast
I would say so.
00:16:50
Circuspreneur Podcast
I may say.
00:16:50
Jeff Thompson
oh Yeah. And if they say it, then I guess it's true.
Understanding Taxes for Creatives
00:16:56
Jeff Thompson
ah But yeah. And then, but like, meanwhile, I'm, you know, like auditioning for commercials and I was able to write on the Goldbergs for the last season. And so it's always just been like both of these things file ah firing at the same time. And I just like love both of them. um But if there are any showrunners listening um and they're like, oh, Jeff's too busy to write on my show. I'm not.
00:17:23
Jeff Thompson
I'm not, I'll do it. My clients will figure it out. If my clients are listening, of course you're my priority, baby. I got you.
00:17:33
Circuspreneur Podcast
All of those new clients out there, Jeff is available. The man of many, many, many hats. He can help work on your show and then help you to fly your taxes afterwards. I mean, it can't get any better than this. That is like one of the most fabulous combos out there. You are just like beyond a triple threat, Jeff. And so love I love the background. I love how you got into it. I love that you are now this like tax ah genius and you have like this really multifaceted brain that can help.
00:18:03
Circuspreneur Podcast
all of us and anyone listening in you know that would like to employ and hire Jeff, his you know information will be in the show notes um so that you can potentially come together and work together because it seems like you are just so um you know you know so much and you have so much insight again into this mammoth that can be really overwhelming for a creative as an artist, especially if you're just you know starting out. But even if you're not, I'm someone who's been doing you know um taxes as a creative professional for so many years. and you know each year you know it's a challenge um even working with the same tax preparer um you know that that needs to stay informed and that needs to know what's kind of going on in the world and so in kind of a nutshell again Jeff um you know for this kind of like mini introduction into what you do and what you can provide can you go briefly into you know the misconceptions or the myths um you know for creative um professionals out there in terms of you know doing taxes they're the things that you hear the most
00:18:59
Circuspreneur Podcast
from creative professionals, but you're like, that's not a real thing, or like, or why do you think that? Or, um you know, that's just something to scare you, or that's not as important as you think, or that actually is much more important um
Tax Myths and Misconceptions
00:19:13
Circuspreneur Podcast
than you think when it comes to doing your taxes.
00:19:13
Jeff Thompson
Yeah.
00:19:16
Jeff Thompson
um I think one of the things that stresses me out the most is when people feel like they have to form an LLC or an S-Corp to take any deductions.
00:19:26
Circuspreneur Podcast
a
00:19:26
Jeff Thompson
um So, ah especially in California, it's $800 a year to form an LLC. Even if you form it for a day, realize it's a mistake and close it, you usually you owe that tax.
00:19:40
Jeff Thompson
So, um it's a it can be a very expensive mistake and A lot of us don't think of ourselves as a business um because they think like you have to be a corporation to be a business. But if I go outside right now and I start selling lemonade on the corner, I am a business. Even though I filed no paperwork, I haven't applied for a business license. So all the income I receive is taxable income. All the expenses that I incur are deductions. I don't need to do anything to claim that.
00:20:12
Jeff Thompson
so the The difficult split, and this goes into like myth number two, is that you need to be making a lot of money or any money to like ah claim any expenses. um No, you you you actually don't. Now, some people, there are various versions of this other myth, which is like the um after, you know, three years, if you don't make any money, the IRS will like shut your business down.
00:20:41
Jeff Thompson
or you'll be audited, or there are various versions of that, um the to be as succinct as possible. like um if you um There's a five-year period, right? If three out of those five years ah you're not profitable, then the IRS will assume that you might be a hobby and not a business.
00:21:05
Jeff Thompson
If you're a hobby, then that means you have to report all of your income, but you can't take any expenses, right? um If you're a business, you can take, you report all your income and you can take any expenses that you incur, even if you operate at a loss.
00:21:11
Circuspreneur Podcast
Hmm.
00:21:20
Jeff Thompson
So, ah but that's only an issue. if you're being audited, which doesn't happen very often. So a lot of people think that like they're going to get a call after year three or year five from the IRS, but it's just a matter of you know ah ah what the business is. and also ah There there are rules for auditing people in entertainment and the iris knows in general that ah you would like are very likely to go from you know one year you make a hundred and fifty thousand dollars and then the next year you actually make zero.
00:21:58
Jeff Thompson
um you know And so they are not going to, me as a tax person, if I go from making 150 to zero, and I still have the same number of expenses, they're gonna be like, Jeff, you're committing fraud.
00:22:01
Circuspreneur Podcast
And.
00:22:11
Jeff Thompson
um But ah an actor or writer, they're like, oh, that's just normal. So um don't be afraid of being audited.
00:22:18
Circuspreneur Podcast
And then.
00:22:22
Jeff Thompson
It's an unpleasant thing. But if you spent those expenses, and you are actually you know doing the right thing, then you know you you you should worry slightly less. um And then the last thing that I think is like the big thing is you can't deduct everything.
00:22:43
Jeff Thompson
but you can deduct more than you think you can. um i There are always two different categories of people where they're like, well, I work from my house, so my entire rent is deductible.
00:22:47
Circuspreneur Podcast
Hmm.
00:22:57
Jeff Thompson
And I do have three roommates, and we split the rent, but I'm going to deduct the entire rent. And I'm like, no. But then there are other people who are like, well, um I paid for a website, um but I'm not going to deduct it because I don't want to get audited. And I'm like, but you're ah You're okay.
00:23:18
Jeff Thompson
like you You paid for that.
00:23:19
Circuspreneur Podcast
Yeah.
00:23:20
Jeff Thompson
You have the receipt. It is related to your business. like it's not any You're not like doing anything fraudulent.
Contextual Tax Preparation for Creatives
00:23:27
Jeff Thompson
um and you know i've had to I recently defended a client in an audit and I had to be on the phone for a very long time to explain
00:23:27
Circuspreneur Podcast
Right.
00:23:37
Jeff Thompson
Um, like how things work. They couldn't understand that a person worked for three days and made $75,000. I'm like, it's a commercial. It was recut. Like there were, you know, all these fees associated with it. It was a national. They were literally unemployed for the rest of the year. Uh, but I think that's why it's important to find someone who understands because I get that intuitively. I'm like, yeah, it was commercial. i got But another person might think that you literally are in an office for 40 hours a week making this commercial somehow.
00:24:12
Circuspreneur Podcast
And what would you say to artists that are maybe thinking or have thought of doing their own personal taxes instead of employing a tax professional or you know, what advice would you give them if they don't have access to someone like you, Jeff?
00:24:27
Circuspreneur Podcast
They have a more traditional tax accountant who maybe doesn't understand the ins and outs of the business. And they want to make sure that they're protected and they represent themselves properly.
00:24:37
Circuspreneur Podcast
um Because I've even heard of folks that they leave out those important things or they leave out the nuance um when they are filing taxes and you know having conversations with them. I'm like, well, you didn't really understand the environment like what you just did.
00:24:50
Circuspreneur Podcast
And you need to give them context because so much of what we do is about context, even though it can be exhausting and take a lot longer, it really pays at the end of the day to over explain yourself, which I have learned very much in myself as being a creative all of these years filing taxes.
00:24:50
Jeff Thompson
Yeah. Yeah, I mean, as artists over your career, you're building a team, right? ah You might have an agent who is okay, but like will like say weird things every so often, and you're just like, okay, like I know I should have an agent, but maybe I'm like better not having this person as an agent.
00:25:24
Jeff Thompson
um There are people who are not represented who have great careers. There are people who have the best, you know, quote unquote representatives who have no careers. um It's very similar to, you know, getting car repairs where um do you need to pay someone to, you know, change your oil.
00:25:43
Jeff Thompson
No, but sometimes it's helpful to have someone who understands your car, and especially if you have a very particular career or car that is complicated. You can do it on your own, but sometimes it's helpful to have that relationship with someone.
00:26:01
Jeff Thompson
Um, so I always try to, um, like, I know I'm very good at my job and I like spend way too much time like studying this. So, um, I, you know, in 97% of cases, I'm going to do a, I'm going to do it quicker and I'm going to do it better. Um, but it's like a value for some people. Some people are very good at keeping their stuff organized and they understand the law. And if you feel that you've got it, um you you've got it. You can also check in with someone and say, hey, I think I've got it, but can I pay you to like talk over things with me and most people would be okay with like a consulting fee.
00:26:41
Jeff Thompson
um But it is, at the end of the day, it is your career and you need to know what you feel comfortable with, what you need, what, you know, you, if you're the type of person who is constantly getting more, you know, years behind and then doing that stressed catch up.
Deductions and Income Management Tips
00:27:00
Jeff Thompson
You know, you might want somebody who can help you out with that, um who can do some of the bookkeeping. um There are a lot of ways to get support.
00:27:10
Circuspreneur Podcast
What are the, I think the top pitfalls as we come to the end of the podcast, Jeff, which again, I want to say thank you again.
00:27:16
Jeff Thompson
Mm hmm.
00:27:18
Circuspreneur Podcast
You are so brilliant. We don't have enough time to go into all of your phenomenal brilliance, but I think this is such a helpful podcast because you've explained so many things um that folks can follow right away to make sure that they are prepared for the ah upcoming tax season as a creative professional entrepreneur and am you know an arts small biz small business, as we like to call it here on the Circuspreneur podcast. What do you think are the top tips um that folks um you know need to keep in mind that come to you most often times when you're dealing with creative professionals?
00:27:50
Circuspreneur Podcast
when they are going to file their taxes that you see that are repetitive time and time again that maybe we don't necessarily get right and we're a bit habitual in how we lack in these areas in being prepared or filing properly or not having something that comes to cause us problems in the in the future.
00:28:09
Jeff Thompson
Yeah, i I think it's really helpful to understand. um I'm going to limit it to two things. ah So the difference between W2 and 1099. W2, you're an employee, 1099, or anything that's paid in like cash, Venmo, under the table, that is business income.
00:28:29
Jeff Thompson
Right now, anything related to a W-2, so if you're driving to and fro a W-2 job or they ask you ah to incur specific expenses as a you know related to that, you need to bring supplies, etc., um you can't deduct those on your taxes. Anything else is deductible.
00:28:50
Jeff Thompson
If it is split between those things, then you kind of have to do some math to figure out what the percentage is. um We don't have time to get into the math, but just start thinking about, like, OK, what's related to what. And then within that, take every deduction that you are entitled to. ah But don't push it. I read tax court cases all the time.
00:29:18
Jeff Thompson
And, um you know, people always, I think sometimes the misconception is that when you file your return and it says that it is accepted, that does not mean that you will not get audited. um Audits usually happen two or three years later. um The IRS has two to three or has three years to audit you.
00:29:41
Jeff Thompson
and to update the assessment on the tax
Finding Trustworthy Tax Professionals
00:29:44
Jeff Thompson
return. But if you ah commit fraud or if you substantially understate ah ah your income, they can have six years or an infinite amount of time. And sometimes what happens is a bad tax preparer will do lots of fraud on somebody's tax return, and then five, 10 years later, all of their clients get audited.
00:30:06
Jeff Thompson
um And then you are liable for not only um the taxes due, but interest and penalties, sometimes penalties for fraud, which can be 75% of the tax.
00:30:18
Jeff Thompson
so There are a lot of people who will lie and say that you can do whatever on your tax return and you'll get away with it and they'll say it was accepted, so it's fine. um But they won't be there three to whatever years later when ah you know you are on the hook for all of that. So find someone who's trustworthy, find someone who I will always cite my sources and tell you why I justify something. um You know, just be careful because artists are vulnerable. um We trust, we love, and we get taken advantage of in many ways. um It's your career. Do what's right for you.
00:31:02
Circuspreneur Podcast
um Thank you so much, Jeff. And you know thank you again for teaching us how to protect ourselves. And listeners, you heard that it's so important for us to do our taxes properly, to protect ourselves. I have heard over the years of so many folks that have gotten themselves into some really difficult spaces um from not doing things properly or for seemingly taking the easy way out that ends up not being the easy way out in the long run like you have discussed with us Jeff and taught us how can listeners find you Jeff to seek you out to use you this upcoming year if you even have availability.
00:31:38
Jeff Thompson
um I do have availability. I have a really great staff who helps me out. um My name is Jeffrey Thompson.
00:31:43
Circuspreneur Podcast
Okay.
00:31:44
Jeff Thompson
If you type in Jeffrey Thompson tax, I'm sure I will pop up um or ah you know, that's that's the easiest way. I don't really do social media.
00:31:55
Jeff Thompson
I know I should, but I'm getting old. I'm getting old, guys.
00:31:58
Circuspreneur Podcast
Yeah.
00:31:59
Jeff Thompson
I'm sorry. Just email me. Send me a letter. Facts. Facts is great. um I think my fax number is 818-322-1804.
00:32:05
Circuspreneur Podcast
and
00:32:10
Jeff Thompson
Just try to fax me and see if that works.
00:32:14
Circuspreneur Podcast
And Jeffries, his website will be in the show notes and you can email him directly through there as well. And you can also mini fax him on your phone like I do with folks that still accept faxes.
00:32:27
Circuspreneur Podcast
So you don't have to go anywhere.
00:32:27
Jeff Thompson
Perfect.
00:32:28
Circuspreneur Podcast
You can just use your iPhone. It's an app. You can even probably do it for free or it costs you. a dollar of facts. Thank you so much again, Jeffrey, for this brilliant, brilliant episode. We really appreciate having you as a guest on the Circuspreneur podcast.
00:32:39
Circuspreneur Podcast
Please continue to also stay safe um and stay healthy in this very difficult time of need. And I will close the podcast out. what this is This Circuspreneur podcast is also available on stagelink.com.
00:32:52
Circuspreneur Podcast
S-T-A-G-E-L-Y-N-C dot C-O-M, the groundbreaking new platform for live performing arts that provides unmatched access and connection to this vibrant world of shows and
Closing and Next Episode Teaser
00:33:02
Circuspreneur Podcast
entertainment.
00:33:02
Circuspreneur Podcast
If you're a professional in the performing arts, visit stage link dot com slash pro. S-T-A-G-E-L-Y-N-C dot C-O-M slash P-R-O. Stage Link Pro offers industry professionals higher visibility, networking opportunities, and tools to support and enhance their careers. Until next time, everyone, I'm your host Sinead Stiletto. Thank you so much for tuning in to the Circus Preneur podcast. Please stay tuned for the next episode.