Modeling & Taxes (for models 18 and older)
This post is not intended to replace or be used as professional tax advice. I am in no way a tax professional, nor do I claim to be an expert. The point of this post is to provide basic information to those that are concerned about how taxes and modeling go hand-in-hand. If you have any questions or concerns about your particular tax situation in relation to modeling, please contact your CPA or other trusted tax professional. If there is anything in this post that is inaccurate or wrong, please let me know and I will correct it asap. Additionally, the subject of modeling and taxes discussed in my posts deal with the United States only so if you live outside of the U.S. this topic may not be of any relevance to you.
While you may be happy to be 18 and considered an “adult” one drawback is that now you are responsible for your taxes and reporting your modeling income each year when tax season comes around. There are two situations you’ll fall under if you are a model: modeling with agency representation and freelance modeling.
If you are currently under agency representation, the good news is that you will only receive one 1099 form when tax season starts (if you are signed to more than one agency then you’ll more than likely receive more than one). When you first sign with your agency, you will be required to fill out a W-9, which allows your agent to provide you with your 1099 form each year. Provide your form to your tax professional and you’ll be set to go. You will only receive a 1099 if you made any money through modeling for that tax year. If for whatever reason you did not book any paying work, then you won’t receive a tax form at all.
Now, if you are a freelance model, you’ll be responsible for collecting the proper tax forms and keeping track of your income. Just like agency represented models, you will be required to fill out W-9 forms and will receive 1099s and similar forms when tax time comes around. It is important that you keep track of all this and turn in the proper forms to your tax professional (if you do your taxes yourself then obviously this won’t apply to you). The one drawback here with freelance models is that not all of the clients you’ll work with will ask you to fill out a W-9, nor will you necessarily receive a 1099 from all of the work you’ve done. This is a sticky situation that is best discussed with whoever does your taxes. I’ve heard from other freelancers that clients often don’t bother with providing talent with tax forms if the pay for the gig is less than $600. Whether there is truth to this or not, I am not sure but it seems that $600 is the magic number. But regardless of whether the client chooses to give you a tax form or not, you still need to report your income from gigs that you do not have a 1099 for.
If you are a freelance model that does not receive a lot of tax forms from the people you’ve worked for, contact them and inquire about the matter. Simply ask if they will be providing you with a 1099 or similar form for tax purposes. If not, then move on. The best thing you can do is to keep a record book of what gigs you’ve worked, the name of the client, the date the work was performed, and how much you were paid. At least keeping track of your income in this manner will allow your tax professional to accurately calculate your income and will assist in the preparation and filing of your taxes.
You can purchase special books for recording your income from any office supply store or you can ask your tax professional if they have any to give you. My tax pro at H&R Block gave me a bunch of recording keeping booklets and sheets to track my income and expenses (I’ll be talking about the topic of expenses, write offs and income recording in my next post).
Another point that I've learned about when dealing with taxes is that if you model full-time and live in California (not sure if this applies to other states), you also need to pay what are known as "estimated taxes". Here is a definition/explanation of estimated taxes that I got from an About.com article, written by William Perez:
You need to make estimated tax payments if your income tax withholding will not fully cover next year's tax liability. This applies mostly to self-employed people, landlords, and investors. You need to make estimated tax payments at least every three months. This is because your income tax withholding (from your day job) may not be sufficient to pay your federal income tax in full by the end of the year.
I highly encourage those concerned about this subject to read the rest of Perez's article, titled, "How to Pay Your Estimated Taxes."