I’ve just completed a call with our tax adviser about the unfortunate teeter totter of reporting losses for a failing business (being an artist), and convincing the IRS that yes indeed I aspire that this career as an artist will be profitable. Any professional artist reading this and living in the US has had this conversation with an adviser at some point.
The IRS is very clear that in no way, shape or form must being an artist be pleasurable…if it is, then you are likely not doing it for profit. It’s a hobby if there is pleasure. And if you donate your art to charity, guess what? You are only allowed to write off the material value, yes the canvas and oils, or paper and charcoal. Often times $62.99 or $3.45 versus a market value of $1,500. Also, artists must prove their business to be profitable 3 out of 5 years in order for it to not be considered a hobby. For comparison, if you are raising race horses (possibly a millionaire hobby?), you only need to be profitable 2 out of 7 years.
As an ex-management consultant and business owner, I’m fine with the discussion of keeping records, marketing and working on projects which I think will be beneficial and support my art practice. However, I have a really hard time with the pleasurable discussion: I actually don’t think being an artist is pleasurable at all. My income on my artwork last year was less than a fraction of your coffee purchases for the year, and yet if I didn’t make art I would completely dissolve.
Last week a court ruled that artist Susan Crile did NOT avoid taxes for the years 2004-2009. Robert Storr testified on her behalf, and Susan has an impressive 40-year career of art, where she has had many residencies, awards, included in collections, and is tenured as an art professor at Hunter College. While the outcome was awesome, and totally protecting artists’ right to deduct expenses with respect to their work, the career numbers revealed in this clearly dedicated and talented artist were unfortunate. From 1971 through 2013, court papers said, she earned $667,902 from the sale of 356 works of art — or an average income of a little less than $16,000 per year. My word.
Without a doubt artists must keep doing what they are doing, let’s just embrace a new model. Don’t go to graduate school, the message isn’t right and you’ll save $80,000. Don’t quit the day job, and let it inform your work…everything is related. Don’t make work that you hope will sell. Pull a Henry Darger without the recluse part, we want to hear from you.
In my practice I’m redefining what making art is, and I hope the IRS is happy with that. I am a conglomerate, like Sarah Lee who makes pantyhose and pound cake, I make things, I consult, I design, and write, and one day I’ll have the cake and eat it. In the meantime, I send this post out with the wish that all artists will be considered more compassionately by the government. Make us do a presentation, make us send you our price lists, believe us that this is important, and for !od’s sake give landlords significant tax breaks for housing studios and artists (e.g. Rhode Island).