Qualified Performing Artist Deduction
Encyclopedia
In United States tax
law, certain performing artists are eligible to deduct the expenses incurred in the course of their employment by § 62(a)(2)(B) of the Internal Revenue Code
. This is an “above the line” deduction, meaning that it is used while computing a taxpayer’s Adjusted Gross Income
. It is an exception to the general rule, which requires job-related expenses to be a miscellaneous itemized deduction subject to the “2% haircut” rule of itemized deductions. As such, it is a favorable tax situation for the performing artist taxpayer.
To qualify for this deduction, a taxpayer must fit certain criteria:
In determining who his or her “employers” were for purposes of this statute, the taxpayer must only consider those employers that paid the taxpayer an amount equal to or greater than $200 for the taxpayer’s performance. See I.R.C.
§ 62(b)(2). As a result of this, relatively unknown artists who are paid less than $200 per performance are not allowed to take this exception. Artists who are sometimes paid an amount equal to or greater than $200 and other times paid less than that amount can only claim the instances on which he or she received over $200.
On the opposite end of the spectrum, artists who make more than $16,000 in a taxable year for their performances are not allowed to take this deduction. This excludes well-known performing artists who make a large amount of income from playing shows from deducting their income therefrom.
Additionally, any taxpayer who attempts to claim this deduction must either be single or married filing jointly. See I.R.C.
§ 62(b)(3).
§ 162(a) for further information on deduction of business expenses.
Taxation in the United States
The United States is a federal republic with autonomous state and local governments. Taxes are imposed in the United States at each of these levels. These include taxes on income, property, sales, imports, payroll, estates and gifts, as well as various fees.Taxes are imposed on net income of...
law, certain performing artists are eligible to deduct the expenses incurred in the course of their employment by § 62(a)(2)(B) of the Internal Revenue Code
Internal Revenue Code
The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
. This is an “above the line” deduction, meaning that it is used while computing a taxpayer’s Adjusted Gross Income
Adjusted Gross Income
For United States individual income tax, taxable income is adjusted gross income less allowances for personal exemptions and itemized deductions. Adjusted gross income is total gross income minus specific items laid out in the tax code...
. It is an exception to the general rule, which requires job-related expenses to be a miscellaneous itemized deduction subject to the “2% haircut” rule of itemized deductions. As such, it is a favorable tax situation for the performing artist taxpayer.
To qualify for this deduction, a taxpayer must fit certain criteria:
- The taxpayer must have worked as a performing artist for at least two employers,
- the amount of the deduction must exceed ten percent of the taxpayer’s gross income that is attributed to those performances, and
- the adjusted gross income of the taxpayer, not counting this exception, does not exceed $16,000. See I.R.C.Internal Revenue CodeThe Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
§ 62(b)(1).
In determining who his or her “employers” were for purposes of this statute, the taxpayer must only consider those employers that paid the taxpayer an amount equal to or greater than $200 for the taxpayer’s performance. See I.R.C.
Internal Revenue Code
The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
§ 62(b)(2). As a result of this, relatively unknown artists who are paid less than $200 per performance are not allowed to take this exception. Artists who are sometimes paid an amount equal to or greater than $200 and other times paid less than that amount can only claim the instances on which he or she received over $200.
On the opposite end of the spectrum, artists who make more than $16,000 in a taxable year for their performances are not allowed to take this deduction. This excludes well-known performing artists who make a large amount of income from playing shows from deducting their income therefrom.
Additionally, any taxpayer who attempts to claim this deduction must either be single or married filing jointly. See I.R.C.
Internal Revenue Code
The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
§ 62(b)(3).
See also
I.R.C.Internal Revenue Code
The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
§ 162(a) for further information on deduction of business expenses.