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ART BUSINESS

TAX TRICK #2

After reading the first blog TAX TRICK #1 hopefully you feel great about all the monies you received this year but it’s time to flip the coin and start to remember all the monies you spent this year. 

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TAX TRICK #1

Did you know?

If you are a freelancer, the minimum amount of money you need to earn and to file a tax return is $400! 

"Why is the number $400? While you may not owe any income taxes, as a freelancer, you must pay self-employment taxes in addition to regular income taxes. Self-employment taxes start if you earn $400 or more. Therefore you must file a tax return if you GROSS $400 OR MORE.”

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GREAT EXPECTATIONS

You know the feeling when you finally arrive at a beautiful place that so many people have described to you just to realize it's more beautiful that you expected? 

Your expectations were low, maybe you already scooped out all the Instagram photos and Yelp reviews. But once there, once in the sight of such greatness, you realize it's better than expected. 

We can each define ambition and progress for ourselves. The goal is to work toward a world where expectations are not set by the stereotypes that hold us back, but by our personal passion, talents and interests.
— Sheryl Sandberg

Expectations are everything. You can leave a really successful project unhappy just because your expectations were unrealistic. A client can leave a meeting with you incredible impressed because they expected "artists to not be professionals".

What are you doing to extend expectations of your clients, projects, stereotypes, and yourself? Have you taken the time to objectively consider what your expectations are and what your audience or client's expectations might be?

Your view of your outcome and success depends upon your expectations. This is one of the few things you are in control of as a freelance artists. And only you can decide what those are and only you can manage them. 

3 MAJOR CHECK POINTS you should make time for:

1. What do you want out of this project or from my audience?

2. Am I sabotaging my own success by having unrealistic expectations? 

3. Have I made my expectations clear to right people, including myself?

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SHOW ME THE MONEY

When is the last time you got paid for your creative or artistic skill?

Have you been keeping track?

Are you getting paid more than you were a year ago?

One of my first questions for each artist I work with is how much money are you currently making off your art? If you don't know what you are making on average per month or per project then how I can help you grow? In order to show progress you have to be able to SHOW where you started. 

For artists just starting out or overwhelmed I encourage you open a bank account, create a separate paypal or venmo account so you can easily track your income. 

Let's say you do know how much you are making off your art. Then my next question is how much money do you WANT to be making off your art?

I recently met with a singer/songwriter that responded by saying I don't know how much money I want to be making but I do know I want a residency. I loved that answer because that still equals income. Even though they were already thinking of how to get more money from their work I did still need to know the answer.

Take an honest look at your budget. How much money do you need to survive? Do you want to make art full time? How much income would you need to make that happen? 

Example: Jerry paints. He wants to paint full time and leave behind his receptionists job. Right now he makes $35,000 a year as a receptionists. So my first thought is how can we break this down into paintings and projects. 

$35,000 a year = about $2,917 a month

$2,917 a month = 5 paints @ about $584 each OR 3 major projects @ about $973

When I look at the real numbers I see possibilities. What do you see?

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LEVEL UP

TOP 5 WAYS TO LEVEL UP YOUR WORK

1. File for a DBA, Fictitious Business Name

  • This automatically makes clients and audiences see beyond you. It costs $26 in Los Angeles County to file 1 piece of paper to claim your business name.
  • Simply google your county clerk's website and search their online database with your business name. Once you find one that is not taken print out the 1 sheet of paper, get it notarized, mail it with the necessary funds and then publish your name. Congratulations! 

2. Create a business bank account

  • Creating a separate business bank really streamlines your money and is a huge help in saving money and asking people for money. You can then write checks from under your business name. You can also track your income simpler if you split funds with other artists. EXAMPLE: You wrote a song with someone and you now need to make sure they get 50% of the profits. Some artists or manager will ask for bank statements. Instead of showing them your entire list of chipotle and Target purchases you can simply show your business profits. 
  • MAJOR TRICK: Simply open a paypal or venmo under your business name to create invoices and track who still owes you money.

3. Create a website and/or portfolio 

  • There are so many ways to do this and I would say it's better to try then to not have any online presence at all. Some recommended sites would be Square Space, Wix, or Wordpress. 
  • ONE MAJOR SHORT CUT: Simply create a facebook, etsy, flickr, or instagram page for artwork. This can be a huge cost and time savings while still getting your artwork out there. Put your best foot forward!

4. Having meetings in a consistent place

  • Find a local coffee shop that has wifi, outlet plugs, and grab a coffee. Establish the space so that guests feel welcome and safe. Even if you work from home it's great to meet with colleagues or clients outside the home to LEVEL UP their thinking.
  • Another note I would add is considering opening a physical PO BOX. Imagine your home address on all the W-9s you will be receiving. You can eliminate that opening the smallest PO BOX at your local USPS. 

5. Use a professional email address and professional language

  • This is FREE so simply head over to gmail or yahoo and create a professional email address. EXAMPLE: if you currently use something with your birthday, social security, or phone number you need to get a new email. DOLPHINLOVER85@YAHOO could easily be ANGIESART@YAHOO by day. 
  • For professional language, I PROMISE, you will get taken more serious by friends, family, clients, agents if you keep your emails, texts, and phone calls business professional. AT THE VERY LEAST business casual (simply using complete sentences and replying in a timely manner can do wonders). I understand adapting to your industry but since all these tools are used differently keeping a professional tone is helpful to all people. 

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