If you are an artist who sells their art online or in a gallery you have a simple truth to face. Tax time is just around the corner. Luckily I have a few tips to help you get through this tough time.

Inventory of Your Art at Year End as Cost, Not Value
Now is the time to look around the studio and to document all new and existing art. Also, note what prints you have on hand if you have been participating in shows. As inventory, you must claim these items on your annual taxes. While you may be tempted to list these (sometimes pricey) items with their full value, DON’T! By listing the art on your tax return by cost you may save yourself several hundred dollars. For example, don’t list that $800 (retail) work of art on your taxes as its full price. Instead, list the aggregate cost of canvas, brushes, and paint used to create the art as its price. You will pay way less taxes on a work of art listed as $125 than $800.

Document Your ‘Other’ Expenses
Make sure that when you purchase any office supplies, shipping supplies, easels, or even light bulbs for the studio on your tax return. These incidental costs will add up over the course of the year and may save you a good chunk of change. Just make sure you hang on to those receipts in case the IRS has any questions later in the year.

Charitable or Gift Art
Did you save yourself money this year by giving art to friends or family members for the holidays? You may have done yourself a bigger favor than you thought! Gifted or donated art is another tax write-off. Just this year I gifted nearly $2500 in art to either charitable auctions or family members. And you can bet I will be writing those paintings off as a loss at full price.

Save Money, Use Tax Software
This may be a no-brainer for those of us who have used TurboTax for our personal tax returns. Unless you have made a huge chunk of change this year selling your art, you may not have to employ a personal accountant to get you the biggest bang for your taxed buck. Here in the art studio we have been using tax software to file our business taxes with good results.