Kansas City boasts a vibrant arts scene, with easy access to essentially any kind of entertainment. But the people who make a career out of providing this cultural enrichment have to be as good at managing their business as they are at their artistic work. That means thinking about taxes all year long.
"Some artists don't want to learn about bookkeeping and taxes and accounting because it doesn't feel very sexy. It doesn't feel very artistic," says actor and performer Erin McGrane.
McGrane has been self-employed since 2002, appearing in films like "Up in the Air," and in the cabaret band Alacartoona.
In 2010, McGrane and Jeff Freling started collaborating as the ukelele-guitar duo, Victor& Penny. Since 2012, they’ve logged more than 250,000 miles on the road, across 40 states, and in three countries.
Freling left The Blue Man Group in Chicago to help start Victor & Penny. He says it’s like running a small business. Taxes are something they consider every day.
"Because you just have to think about like, OK, I just bought guitar strings — that’s going into business expense," Freling said. "We just made a payment on GoDaddy for our website. Well, that goes into advertising and promo. And we’re thinking of this all year long."
McGrane shares tax tips with other artists in professional development workshops and conferences. She says she hears all sorts of record-keeping strategies, from artists stuffing receipts in cigar boxes to creating elaborate spreadsheets.
"People always say, what’s the best system? The one you’ll use," she said.
Walter Coppage makes his living as an actor. He's been a familiar presence on Kansas City stages over the last three decades, at venues such as the Kansas City Repertory Theatre, the Unicorn Theatre and the Coterie Theatre, but he also performs in other cities, and in commercial work and films.
"I think I have nine W-2s and you know, three 1099s. And they’re coming from, I think, three or four states," he said.
Through the years, Coppage says he's learned that expenses for research or inspiration, like Netflix or a newspaper subscription, can be a tax deduction — and so can a performance.
"I encourage, especially young actors — because this is something I did when I first got in the business — to figure out the landscape," he said. "And so I went to every theater in town and tried to see what every theater was like. So that’s a business expense."
Managing those business expenses will get trickier for Kansas City’s artists this year because of changes in the new tax code, says Dean Vivian, who specializes in tax preparation for artists.
Vivian has had a three-decade career as a stage actor, in film and television, and as a voice-over artist. He has also been preparing taxes (though he's quick to say he's not a CPA) since the late 1980s and now has more than 400 clients from coast to coast.
"Write it down, and write it off" is his mantra.
But the new tax cuts, he says, are likely to put a dent in deductions. For example, actors like Coppage and McGrane who are members of Actors' Equity Association will get a W-2 from employers. But freelancers get a 1099 form.
"Now that means, if I were to fly to Chicago to audition for equity shows, nothing would be deductible. Not the flight, not the travel, not the per diem overnight, not the lodging, nothing," he explains.
"Whereas the same trip to Chicago, if I’m auditioning for self-employed shows, let’s say a cabaret or something like that, then that is fully deductible."
For Kansas City’s artists, staying organized is as crucial as being creative when it comes to making a living.
"So not being afraid of the taxes and bookkeeping and accounting, but just taking control of that for yourself and understanding what you're doing," said McGrane, "that's the most empowering part of all."
Laura Spencer is an arts reporter at KCUR 89.3. You can reach her on Twitter at @lauraspencer.
