hickeyd
New Member

Can i deduct my talent agency fees?

I pay 4% of my Base Salary to the Talent Agency that negotiates contract, aides in reemployment,etc

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Yes, if talent agency fees are "ordinary and necessary" expenses for your industry.

Per the IRS: To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

See https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses

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GC_ET_B
New Member

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Further Question-

I am a professional actor, and receive W-2 from several different theaters and payroll companies for work in commercials, and television. I also pay a significant amount (10% for Film, etc., 20% for print) to my agent. However since I receive W-2s,( thus an employee rather than self employed) and it won't recognize my agent fees and union dues (both of which are significant this year) as business expenses.

Advice?

 

 

LeonardS
Expert Alumni

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These fees are not deductible as an employee.  Because your income is reported on a W-2 your are correct that you are an employee rather than self-employed.  You can not deduct these expenses as a self-employed business deduction because you are not operating a business.  Prior to the Tax Cut and Jobs Act of 2017 these expenses could have been deducted as itemized expenses subject to the 2% limit.

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My understanding is that an actor can deduct the agent and manager fees on schedule C only If that actor has incorporated as an LLC.   For all those actors with W2 income, where can they claim the deductions?  I read through instructions on form 2106 and it appears they set very low-income limits to qualify.   Please advise

 

DianeC958
Expert Alumni

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If you received a W-2 as an actor you cannot claim a deduction on your Federal Return for the amounts you pay to your agent unless 

 

You are considered a qualifying performing artist if you meet the following requirements:

 - Performed services in the performing arts as an employee for at least two employers during the tax year.
 - Received at least $200 in wages from each of the two employers.
 - Had allowable business expenses of more than 10% of gross income from the performing arts
 - Had an adjusted gross income of $16,000 or less before deducting these expenses.

 

You may still want to fill out the form 2106 Employee Business Expenses as some states still allow you to deduct these expenses.

 

Where do I enter job-related employee expenses? (Form 2106)

  1. Open (continue) your return in TurboTax if it's not already open.
  2. In TurboTax, search for 2106 and then select the Jump to link in the search results.
  3. At the Tell us about the occupation you have expenses for screen, enter your occupation, then select Continue.
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