| st question that needs to be answered usually is | | | | but one thing is essential - it has to be regular. I believe |
| whether or not your child even has to file taxes this | | | | once a week works well for recording your child's and |
| year. The answer is this: A child who earns more than | | | | your own expenditures. You can use a ledger, a |
| $5,350 as an employee (that is, as reported on W-2s) | | | | computerized spread sheet or a program such as |
| and whose parents claim him as a dependent must file. | | | | Holdon Log's, ActorTrack 2.0 - the choice is yours. |
| If that child claims himself as a dependent, he must file | | | | You also need some way to make notations in the |
| if he earns more than $8,750 in W-2 income. If, | | | | car. Otherwise, you will forget how many miles were |
| however, the child works as an independent | | | | driven and who and what amount you paid for parking. |
| contractor, he must file (because of self-employment | | | | Of course, a minor who doesn't own a vehicle can't |
| taxes) if he earns more than $400. | | | | take mileage on her own - but she can pay you the |
| Children who earn less than the above are not | | | | mileage cost of driving her as a local transportation |
| required to file, but often should because they can get | | | | expense. This year, the IRA is permitting a mileage |
| all withheld income taxes refunded. | | | | rate of fifty and a half cents a mile. |
| If your child earns money and chooses to file a return, | | | | Bear in mind that the IRS does not require written |
| he files separately from you. The parent can decide | | | | receipts for individual expenditures under $75, so long |
| whether to claim a child actor as a dependent or to | | | | as you have made a written notation of the expense |
| allow the child to claim himself. In basic terms, this | | | | in a business diary or log (which can be any of the |
| decision should be based on income levels. If the child | | | | devices listed above or even your weekly or monthly |
| earns more than the combined income of the parents, | | | | calendar). |
| it is more to the family's advantage to let the child | | | | Find a good way to keep the receipts accessible and |
| claim himself. Otherwise, it benefits the parents to claim | | | | in order. An accordion style file with multiple slots |
| him. Be advised however, dependency issues are | | | | works wonderfully - just label each slot with the |
| highly complex, and can have legal ramifications | | | | category of the expense, such as "Acting Lessons" or |
| beyond tax matters. So before a child claims himself, it | | | | "Office Supplies," then group expenses from each |
| is prudent to consult with your tax and/or legal advisor. | | | | category in each slot with the oldest in the front and |
| Many parents wonder if their taxes will be affected | | | | the newest in the back. |
| because they have a working child. This is rarely the | | | | Also remember that a lot of bad advice is given by |
| case as the parents cannot claim expenses they | | | | good people - people who mean well, but don't really |
| accrue for the child, except under highly unusual | | | | know their subject. We find this particularly true in tax |
| circumstances. | | | | issues. Here's one myth we commonly hear: all an |
| Maximize Your Deductions | | | | actor's clothing is deductible. Sorry -- just not true. The |
| I'm often asked "What is the one most important piece | | | | tax law is very clear: to be deductible, clothing must not |
| of advice you can give to actors," and the answer is | | | | be suitable for street wear. So you are limited to |
| simple: keep excellent records and receipts. Doing so | | | | genuine costumes: clown outfits, cowboy suits, period |
| will help you maximize your deductions, lower your | | | | pieces, formal wear and other similar articles of |
| taxes, and satisfy the IRS if you should get audited. | | | | clothing. |
| The record-keeping can be done in a variety of ways, | | | | |