5 Common Tax Pitfalls for Artists (and How to Avoid Them)

As we head into tax season this year, and your feelings and fears about taxes begin to swell, remember: there is no tax education in this country. And that’s bananas! It’s no wonder that US tax literacy is so low. So if taxes confuse you, I want to reassure you that you are not alone, and you’re not broken. Your creative work is shifting the culture for good, so let’s make sure you stay on the right side of the law and get the most out of your taxes. That way, you can keep your focus where it belongs: on your amazing work. As an artist and tax pro who helps self-employed creative people manage their taxes, I want to help you navigate the top five tax pitfalls I see in my work.

 DISCLAIMER  True tax advice is a two-way conversation, and your accountant needs to hear your full situation to apply the rules correctly in your case. This article is meant for general information only. Please don’t act on this alone.

1. Not seeing your art as a business,
or not treating it like one 🚛

Under US tax law, if you make self-employment income, that’s a business. There is nothing “official” required to be treated as a business for taxes, other than this: you must have a “profit motive.” Don’t make the mistake of thinking you’re not “official” enough, or that your profit isn’t “big enough.” The IRS already sees you. So get the benefits that come with being a business: tax free business deductions for your “ordinary and necessary” business expenses. Just make sure you don’t take business deductions for a hobby. Businesses have a profit motive, while hobbies don’t. So if you’re not trying to make money, the IRS treats your work as a hobby, and you don’t get to take business deductions.

2. Confusing business deductions with itemized deductions, and missing out 📊

You probably don’t itemize (only about 9% of US taxpayers do), but you definitely still get to take all your business deductions if you are self-employed. These are two different things. Itemizing is when you have mortgage interest, medical expenses (over 7.5% of your adjusted gross income), charitable contributions, and state and local taxes (capped at $40k for 2025) that exceed the standard deduction for your filing status. For 2025, that’s $15,750 if you file single, or $31,500 if you file jointly with a spouse. If you have a “profit motive” in your creative practice, you’re entitled to take business deductions. And that’s true regardless of whether you itemize or not. If an accountant says to you, “you don’t itemize,” that’s fine. It means you take the standard deduction. But it doesn’t mean you don’t get your business deductions. This episode of The Sunlight Tax Podcast will help you tell the difference if you need more help.

3. Missing deductions 💳

When you don’t realize you’re a business, or you don’t have a good system to track your expenses, or if you feel unsure about the tricky ones, like your home studio or business mileage, it’s easy to miss deductions that you’re rightfully entitled to. Just don’t forget to track them, and keep all the receipts. I’ve got a beautiful visual guide to getting all your art deductions that you can download. And as a bonus, it tells you how to take your home studio/office deduction, mileage deduction and business meals deduction.

4. Misunderstanding your 1099s 📑

1099s are tax forms that report non-employee compensation (the 1099-NEC) or payments processed through a third-party payments processor, like Stripe or Paypal (1099-K). Let's be clear: the law requires you to report all the income you made in 2025, even if it is not reported on a 1099. So don’t forget to include amounts below the 1099-NEC filing threshold ($600), and the 1099-K filing threshold ($20,000 and over 200 transactions). Galleries are not required to issue 1099s, (because your work, to the gallery, is merchandise, and 1099s aren’t required for that). But don’t make the mistake of thinking that means you don’t need to report your gallery sales — you absolutely do. If you paid anyone over $600 in 2025, you are also required to issue them a 1099. There’s no getting around this — you check two boxes attesting that you’ve complied with this law on your tax return, and the due date for issuing 1099s you owe is January 31. Penalties start accruing on February 1, so don’t sleep on this. I have an easy 1099s course that you can complete in under an hour, that makes the filing process clear and simple. You can get that here. 

5. Doing bookkeeping from your receipts 🏦

This is the most stressful and least effective way to do your books — so let’s resolve to ditch it. Instead, make sure you’ve got a separate bank account for your creative work, and deposit all your income into it, and pay for your expenses out of it. Voilà! Now you have a bank statement that tracks everything into and out of your business. This is what you use to do your bookkeeping. It will help you remember all the little stuff, and prevent you accidentally (and illegally) including personal items as deductions. You still need to keep your receipts. You need them as proof that your expenses really happened in case you are audited. But these can go into deep storage (keep them for seven years). I recommend making a receipts file in your inbox, and one in your physical filing cabinet, separated by year, and putting all receipts, digital or physical, into that folder. 

I hope this clarifies some of the most common tax pitfalls, so they don’t plague you this year. Taxes build the community we live in, represent our values, and can give you a lot of benefits — especially when you’re a small business owner. And while you may not have learned them in high school (though that’s my wish for our country), there’s nothing wrong with you for feeling confused. There’s just some info you need to learn to get the benefits you’re entitled to. Your work is important. Creative work changes the culture, and culture is what changes the world. We need your work now more than ever. So I hope you’ll take a little time to appreciate how valuable your work is to our country, and protect it with some knowledge and good systems.

For more super-simple tips on simplifying your taxes, check out my book, Taxes for Humans, or my comprehensive online program to build your funds for the future and make taxes a breeze. I’ll also be holding an empowering, jargon-free 2-hour tax workshop on Monday, February 9th in the Creative Outpost for Fractured Atlas members. If you are interested in a membership, join here for just $5 a month and unlock a treasure trove of past and future workshops. With that, I’m wishing you all the deductions and ease you can have, so you can get back to focusing on your powerful work.