Answering a Reader Question #985

Unknown Wrote (in response to the blog post "Modeling & Tax Season: To Write Off or Not to Write Off?"):

Would you elaborate more about "your income made from modeling also needs to justify the deductions" and exactly what you mean?

Hi, Unknown!

I absolutely can. :-)

If you choose to claim certain expenses as tax deductible because it relates to your modeling career, then the money you report to the IRS that you earn from modeling jobs has to be enough of an amount to show that you are, in fact, making a profit and earning enough from it.

For example, if you have a ton of deductions for manicures and spa services (let's say they total $1,000 for the tax year) BUT you didn't make that much or more in income from modeling, that's not going to look good to the IRS.

When you show a tax return record too many years in a row where the money you make from modeling isn't more than the amount of tax deductions you are trying to claim, the Feds will interpret modeling not as a professional, profitable career but instead as a hobby and they could not only audit you to ask you to prove to them how/why your deductions are valid, you could end up owning them money as a result.

So it is important that you keep track of the money you earn from modeling and calculate how much you're spending in modeling related expenses and making sure the amounts make sense. It is possible to claim a "loss" that shows you didn't earn enough money through modeling but, again, showing losses too many tax years in a row will be a red flag for the IRS.

Anyone can get manicures and spa services on a regular basis so it's not something that is only exclusive to models. Any deductions you claim you're doing because of modeling has to have legitimate evidence to show that you are making the kind of money with modeling that requires you to have to keep investing in these services, therefore you are justified in claiming them on your taxes.

I'm not a professional CPA so in addition to what I've written above, I would encourage you to speak with your CPA (if you have one) about your situation to make sure any deductions you want to claim are valid and on the up-and-up.

I hope that helps!

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