Expenses and Taxes

MODELING and TAXES

disclaimer: this is NOT legal, financial, or tax advice. It is merely opinion based on my education and experience. Consult a professional attorney and accountant for help in understanding your own tax situation.

 

INDEPENDENT CONTRACTORS

By the nature of the work that models do, they are independent contractors, rather than employees.

Independent contractors --

  • have control over the hours and jobs they accept.
  • are not "long-term" in employment (often they are only used a few hours).
  • are not entitled to unemployment benefits when the job ends.
  • are responsible for how they perform the work required.
  • are responsible for their own tax issues.

1099-MISC

The federal government requires that any party you pay more than $400 in a tax year to be issued a 1099-MISC form from your business. This 1099-MISC income form is submitted to the person you paid for services, as well as a copy to the IRS so that they can ensure that people are reporting the income that they've earned.

For this reason, ALL MODELS must give those they work for their social security number, or an EMPLOYER IDENTIFICATION NUMBER (for their agency if all bookings through there).

For models who would prefer to keep their modeling tax information separate from their other employment information (social security number), they need to declare themselves a business (file a fictitious name certificate with the secretary of state and get a sales tax number) and file for a federal EIN.

All pay to a model is INCOME

When paying models, the money that a photographer pays a model is ALL considered model income. So, if the modeling fees were $200 and the travel & lodging expenses were another $120, then the model income is $320. The photographer is not allowed to deduct any expenses except "modeling fees" -- so there is no "double dipping" of writing off expenses.

WARNING -- you also need to include any "prints for time" trades. Prints have to be valued at "something" -- and you need to keep track of how many prints a model earns so that you can correctly issue a 1099-MISC form.

Again, a model must provide you with either a social-security number or an EIN so that the IRS can track how much in "income and barter" the model has earned.

SCHEDULE C - FEDERAL INCOME TAX

After the model has collected all of her modeling fees for the tax year, with the federal income tax return -- he/she will file a self-employed SCHEDULE C form. In that form is where the model "expenses out" such things as

  • travel and lodging expenses,
  • wardrobe & make-up (but only those which are required for shooting (personal daily-wear make-up must be kept separate and is not deductible)
  • special training classes (try to avoid those modeling school scams anyway),
  • books and magazines required to "keep current" in the industry,
  • office and mailing expense,
  • telephone and internet expense (must be pro-rated based on how much is strictly modeling and how much is personal),
  • advertising and self-promotion expenses (including comp card reproduction, headsheets, etc.),
  • fees paid to agents, attorneys, and accountants,
  • and others (see an accountant for more info).

PROFIT and LOSS

If a model makes a "profit" on their modeling (many won't after considering all their expenses to be "in modeling") -- they are also subject to paying "social security" taxes on their earnings, in addition to the federal income tax. Form SE will have to be filled out to calculate how much the model must contribute to the social security system from their earnings.

If you have a loss on your "business" of modeling, you can reduce your income tax by taking the "loss" out of any other earnings you have (from a "day job" waitressing, etc.).

WARNING -- There are LOTS of rules regarding your ability to deduct your modeling business expenses against your other income. For instance, you must be pursuing modeling in an active and professional manner for the purpose of making money. A "general rule of thumb" is that you must show a profit at least 2 out of every 5 years of an activity -- otherwise the IRS generally considers your "modeling" a "hobby" -- and you can only deduct expenses to the point where they zero out your modeling income.