How do I divide my Acting Expenses for 1099 vs. W-2?

[hardinaka]

I'm an actor in NYC and made most of my income this year on a w-2. However, my typical deductions (actor training, networking events, materials printing) are not directly required for that job. Can I justify the classes as necessary education for this one gig? Or do I need to enter them separately under a small business heading?

[ChristinaS]

Performing artists have special rules. Do you have total income before expenses of less than $16k? If not (and you probably don't, since you live in NYC)... do you have any 1099MISC income? Do you itemize your deductions on Schedule A? Employee expenses are a tough write off.

[hardinaka]

I have other jobs that do, unfortunately (fortunately?) put me above $16k in income, so I don't qualify for the special deduction.

I have 750$ in cash payment from another two jobs, but this year was not paid on a 1099. I do have everything itemized, however, and have kept good track of receipts. Better to deduct under that income?

[ChristinaS · Accepted solution]

Most likely, you don't want to try and relate these expenses to W2 income. Because you don't qualify for the special artist rules (I've never seen anyone qualify for that, for what its worth), employee business expenses go on Schedule A for itemized deductions. Firstly, you need to itemize (mortgage interest, state taxes, property taxes, charity). Unless your income is high, an individual in NYC is unlikely to itemize their personal deductions on Schedule A. If you do itemize, employee expenses apply a 2% "floor". So, if 2% of your AGI is $1000 and your expenses are $1500, you have a $500 write off.

A business expense is better.However, the expenses need to relate to that business income- the $750. You don't need a 1099-MISC to have business income, but you do need the expenses to have a direct relationship to this non-W2 income. If your non-W2 income is $750 and the bulk of your income is W2, it would be "aggressive" to state that your expenses are 100% attributable to that $750 in income.

Keep in mind that itemized deductions don't quite relate to your business/ acting expenses that you are tracking. It relates to a specific form on your 1040. If you don't own your home, its not likely you are itemizing on Schedule A. So, the expenses most likely have to be equated to your freelance work to make any difference on your tax return.

The standard deduction for single taxpayers is $6300 in 2016. 

[ChristinaS]

You can see if you are already itemizing by looking at line 40 of your 1040 here:
My Account-Tools- View Tax Summary- Preview 1040. Is line 40 $6300? If so, that would mean you'd need an extraordinary amount of W2 based expenses to itemize. Expenses related to non-W2 income (freelance/ 1099MISC/ cash) do not go in itemized deductions. They go directly against this income. But, the expenses need to be related to the $750 worth of work.