Hobby or Business? How the Government Sees Your Art Practice

A peek inside an artist’s studio and their tax-deductible supplies. Image courtesy of artist Scott Schultheis

There’s a fine, confusing line between the “hobby” artist and “self-employed” artist–especially in the eyes of the IRS.

If you’re an artist with a substantial practice and record of sales, you want to be considered a self-run business.  It will save you more in the long run on tax returns.

Hobby artists can claim tax-deductible expense on their generated income, but it will be considered under miscellaneous itemized deductions on Schedule A, which are deductible only to the extent that they exceed of your adjusted gross income. So, no income = no tax deductions. Also, hobby losses cannot offset other incomes.

However, if the artist is making, or plans to make, honest profit and carries on like a business, the IRS probably considers their work as a business. In this case, the artist might be able to deduct the full amount of their expenses by filing a Schedule C, including net loss. That amounts to much more savings over time than someone considered a hobby artist by the IRS.

How does an artist know where they fall?

If you’re an artist undergoing the switch to bona fide business, make sure to keep track of all expenses such as studio fees, shipping, framing, materials, utilities, insurance, repairs, and business travel.  Document every source of income including sales, commissions, grants, awards, consignment, and wages for artwork.  Keep track of your unsold inventory.  Spreadsheets and accounting apps help you see and improve your business practices while proving your intent to earn a profit (should you ever be questioned).

We recommend those who are new to converting their practice to a business to consult an accountant who is specifically knowledgeable about the arts or find a workshop* specifically for filing taxes as an artist to learn how to do it yourself.

*The Leeway Foundation has an upcoming workshop that will also provide a live Youtube live stream

Howard Traivers
Howard Traivers
Fran Lightman Gibson a Philadelphia painter working primarily with oil on canvas.
I attribute the source of my artistic inspiration to my love, fear, and awe of nature as it both represents and defines the tension and optimism of life. My “Take Any Road Series” encourages the viewer to have the confidence to experience life no matter how difficult or confusing, beautiful, or powerful. All of this exists with an underlying structure of assumptions.
I think we all see the world a little differently and feel our own experience uniquely.  I paint using what all of my senses have given to me as the experience.  When I paint the sky, I am feeling the wind, putting it to music in my head, remembering the smell of the chance of rain, tasting the air, seeing the clouds dance. 
Fran Lightman Gibson
Fran Lightman Gibson

Fran Lightman Gibson a Philadelphia painter working primarily with oil on canvas.
I attribute the source of my artistic…

Fran Lightman Gibson a Philadelphia painter working primarily with oil on canvas.
I attribute the source of my artistic inspiration to my love, fear, and awe of nature as it both represents and defines…

Fran Lightman Gibson a Philadelphia painter working primarily with oil on canvas.
I attribute the source of my artistic inspiration to my love, fear, and awe of nature as it both represents and defines the tension and optimism…

Influenced by folklore, superstition, divination, & forgotten territories reclaimed by nature, I create immersive installations out of hand-cut Tyvek—a nonwoven material most familiar as an insulating wrap used in the construction industry. These environments might be fairy-tale forests or the sites of biological disasters. Perhaps both.
Summer J. Hart
Summer J. Hart

Influenced by folklore, superstition, divination, & forgotten territories reclaimed by nature, I create immersive installations…

Influenced by folklore, superstition, divination, & forgotten territories reclaimed by nature, I create immersive installations out of hand-cut Tyvek—a nonwoven material most familiar as an insulating…

Influenced by folklore, superstition, divination, & forgotten territories reclaimed by nature, I create immersive installations out of hand-cut Tyvek—a nonwoven material most familiar as an insulating wrap used in the construction…

Leora Brecher
Leora Brecher
Contemporary Landscape Paintings inspired by the abstract patterns in nature modified by atmospheric color and light. Abstract forms and images are generated through perception and imagination.
Mary Powers Holt
Mary Powers Holt

Contemporary Landscape Paintings inspired by the abstract patterns in nature modified by atmospheric color and light. Abstract…

Contemporary Landscape Paintings inspired by the abstract patterns in nature modified by atmospheric color and light. Abstract forms and images are generated through perception and imagination. …

Contemporary Landscape Paintings inspired by the abstract patterns in nature modified by atmospheric color and light. Abstract forms and images are generated through perception and imagination. …

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