Business Resources: For the Skeptical Artist

Artist Survival Kit workshop participants
learning business strategies

Earlier on the blog I introduced the importance of small business resources for artists. I promised to summarize some of the helpful resources available in Oklahoma. 

Today, I write to the skeptical artists who do not see how their artwork can fit with normal business plans or don’t see the value in aligning with organizations like chambers of commerce.   Later, I will offer resources for artists who already understand their artistic practice as a business (and maybe some skeptics will be swayed).

Perhaps you are wondering, “why do I need to know about standard business strategies?"

Basically, thousands of business experts have worked for many years to outline making a business succeed.  Many have devoted lots of brain power and trial and error to define best practices. Many have worked to improve making businesses profitable.

Why duplicate all the effort and make the same mistakes when all this work has already been done for us? Knowledgeable specialists share many of their tips with us for free!

Artist Survival Kit workshop participants Sharon Webster
& Romy Owens learning business strategies

If that doesn’t convince you, certainly you do not want to break the law. Ignorance is not a defense if you neglect to follow tax law, insurance requirements and function well as a legal entity.  You can talk to anyone who has been audited over problems gathering sales tax or sued over a breach of contract to know that it is worth learning the basics for your business.

For the bare bones facts, check out the checklist from the Department of Commerce for startup businesses.  They give simple information about business structure (sole proprietor, S-corp, etc.), licensing and more. 

See here for free workshops by the Oklahoma Tax Commission about business taxes. Also, you can save money as a reseller with a sales tax permit if you buy supplies to make your art that you will later sell (and charge sales tax). 

The Department of Commerce also offers tips for expanding your existing business.

With a few steps and strategies, your small artistic business can be at the least legit and possibly on the road to profit. 

Artist Survival Kit Recap: What's a Write Off?

Last Thursday, nearly 30 artists gathered at the Mainsite Art Gallery in Norman for the “What’s a Write Off?” workshop as a part of the Artist Survival Kit program.

Although not always the most exciting or glamorous topic, in this busy tax season artists often have questions about filing taxes, record keeping, creating a business entity, etc. We also covered the basics of copyrights and trademarks.

Thanks to Chad Burris, a Tulsa attorney and founder of Tulsa Lawyers for the Arts, and Larry Anderson, CPA for speaking.

As a recap, here are a few good tips from the workshop:

Copyrights & Trademarks
Copyright owners possess these five exclusive rights:
-To reproduce their work.
-To prepare a derivative work based on their original work (like a sequel to a movie, etc).
-To distribute copies of their work.
-To perform their work publicly.
-To display their work publicly.

Even if you don’t put a copyright notice on a work, that doesn’t mean it isn’t protected! But, to be safe you should always include a notice. To protect yourself from infringement, it is best to officially register with the US Copyright Office.

You CAN NOT copyright the following:
-A composition so simple that it falls below the level of minimal creativity.
-Abstract ideas, methods, systems or facts.
-A style.
-Names, titles, short phrases or slogans.

A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of the goods of one party from those of others.

Taxes & Record Keeping
-Could my home office or studio be deductible? How do I figure it out?
Yes! You can deduct the cost of operating a studio or office out of your home. However, the space you deduct must be used exclusively for your art business (i.e. can’t also serve as a guest bedroom or kitchen table). Take the square footage percentage of your home occupied by your art business and multiply by the overall cost of the home to get your business percentage.

-Could my vehicle be deductible since I use it for my art business?
Yes! But only during the times you are using it for your art business. You must keep written proof or a log of your business use. You can get a standard mileage rate for those miles or take the percentage of miles per year used for business and multiply by the actual cost of the vehicle for that year.

-Could my continuing education be deductible?
Yes! But, it must be required to improve or maintain your skills and must NOT be for a new profession. So, something like an ASK workshop likely would be a deductible expense!

Of course, this only scratches the surface but was a great introduction to the expansive topics.  We strongly recommend consulting a CPA or lawyer for advice on your specific questions. 

Join us this Saturday, February 27th at the University of Central Oklahoma in Edmond for the next ASK workshop, Extreme Makeover: Portfolio Edition.

Artist Business: Good Record Keeping Is Essential

Art careers often start as a hobby or a side endeavor, then develop into a profitable business. Many artists do not realize that they have started making money until they complete their tax returns and discover they owe money to the IRS.

Regardless of whether you are a new artist beginning your career or a seasoned professional, you should treat all of your artistic endeavors as if they are part of a business. You need to develop and maintain detailed records that show both your personal expenses and your business expenses such as art supplies, booth fees, etc. Your records should also include detailed information on the sales that you make throughout the year.

These records not only can help you monitor your financial progress as your art career develops. They can help you or your CPA in the preparation of your tax return. With detailed records, you can also make sure that you are taking all of the deductions available to you. In addition, detailed records allow you to verify the items included on your tax return. The ability to verify your items is important in the future if you are audited by the IRS.

It can be overwhelming and confusing to start a good record keeping system. The IRS has detailed information on their Web site that can help you get started, in addition to answering your questions about self-employment and income taxes. For more information, visit the IRS’ website.

Guest Blogger: Artist-Friendly CPA

Illustration by Sue Clancy, Norman, for Art Focus Oklahoma magazine

To learn more about the topic, you can attend OVAC's workshop, “What's a Write Off?,” on February 18, 5:30-7:30 pm at Mainsite Contemporary Art in Norman. This workshop will address legal, tax, and accounting issues for individual artists. Learn more at http://www.artistsurvivalkit.org/.

Artist Business: Income Taxes

Art Calendar magazine just released this super helpful guide to changes in tax law that might affect artists on their 2009 taxes. 

To learn more about the topic, you can attend OVAC's workshop, “What's a Write Off?,” on February 18, 5:30-7:30 pm at Mainsite Contemporary Art in Norman. This workshop will address legal, tax, and accounting issues for individual artists. Learn more at www.ArtistSurvivalKit.org.

Artist Business: Oklahoma Sales Taxes

During a recent visit from an agent of the Oklahoma Tax Commission (OTC), I wondered if the sales tax procedures for a “business” (think my gallery) were different from those applicable to an individual artist. Since she was there, I asked the agent.

If you are selling art in Oklahoma and a gallery isn’t handling sales tax for you, you must collect sales tax and pay those taxes to the state. In order to collect sales tax, you must have a sales tax permit.

The process for obtaining a sales tax permit is simple and can be done online at the OTC website at http://www.tax.ok.gov/ for the "Business Registration Forms." The permit costs $20. There are also workshops available to assist you in filling out the form and obtaining your permit.

Sales taxes can be paid online at the site listed above. It is an easy process and an OTC agent will visit with you to explain how that process works. You have to report every month, even if your sales are $0. After a 6 month probationary period, you can have some flexibility for months with $0 sales. You receive a discount if you pay early, fines if you pay late.

For immediate questions, please contact the OTC Taxpayer Assistance Division at (405) 521-3160 or in-state toll-free at (800) 522-8165. For more explicit information, see my ArtFocus Oklahoma article on page 25 of this issue.  

If I can do this, so can you.
Guest blogger: Stephen Kovash,
Istvan Gallery http://istvangallery.com/, OVAC Board President


OVAC will offer “What's a Write Off?” on February 18, 5:30-7:30 pm at Mainsite Contemporary Art in Norman. This workshop will address legal, tax, and accounting issues for individual artists. Learn more at www.ArtistSurvivalKit.org.