When people get into the entertainment industry, they do so for many reasons: a love of the art, the desire to make people smile, or a need to express themselves. Entertainment can be a rich, rewarding, and lucrative field. But, the odds are good that you don’t go into entertainment to master your accounting skills, which may pose a challenge if you are selling your entertainment services.
Here’s the reality: financial success and tax compliance are necessary to be successful in any field, and if you don’t pay attention to these issues, you risk major financial implications, including the ability to pay yourself what you deserve. More often than not, people in the entertainment industry need help to manage their finances. That’s why entertainers must find specific accountants who know how the entertainment industry works, rather than just general accountants who may not have expertise in this field.
The Need For Entertainment Industry Tax Accountants
Here’s a simple truth: Every industry is different. You wouldn’t see a cancer doctor for a broken bone and similarly wouldn’t hire an electrician to fix your roof. For the same reason, it is important to recruit specific assistance in your field to ensure that you are getting the best advice.
The entertainment industry comes with a variety of quirks that are not seen in other sectors. Think about it. On the revenue side, you have:
- Royalties from various sales mediums, including online sales, concert sales, and potentially local or national retailers
- Concert ticket sales
- Merchandise sales
All of these items can get very complicated, very quickly. Entertainment comes with added complications, as there are often local, state, and national taxes to consider.
Then, in terms of expenses, there are a variety of specific items to consider:
- Touring expenses
- Venue fees
- Concert booking fees
- Salaries of performers and contractors
- Royalty fees
The Role of Entertainment Industry Tax Accountants
To be clear: every industry is different. Every industry has its quirks. But the peculiarities of the entertainment industry are certainly more industry-specific than most. Furthermore, as any entertainer can tell you, the various tax laws can also vary depending on the specific sector that an entertainer is involved in. After all, tax rules that apply to musicians may apply very differently to magicians.
It is also worth keeping in mind that recent changes in tax laws may necessitate specific expertise. The Covid-19 pandemic has presented accountants with particular tax and financing changes, specifically in the entertainment industry. For example, various venue-specific funds and tax laws have impacted payments that members of the entertainment industry needed to make – some of these changes remain ongoing and others were for a specific period. This, in turn, has affected the taxes and financial planning of many members of the entertainment industry, who may have seen their revenues or expenses impacted. All of these changes and temporary concessions have to be considered when planning your taxes, and a reliable way in which to do this is to employ the services of an entertainment-focused tax accountant. These professionals understand the parameters within which deductions can take place and keep abreast of changes to tax laws that might affect how much entertainers should spend on tax for different categories of their earnings.
How To Get Industry-Specific Help
Entertainment-focused accountants can provide you with customized, industry-focused expertise for optimum tax planning, without necessarily breaking the bank. The entertainment industry has a variety of quirks and issues that other industries don’t have, and you deserve the knowledge that comes with having someone who understands your industry.
If you need help finding the right accounting software or working with entertainment industry tax accountants, make sure to reach out to Fusion CPA. We have years of experience in various industries, including the entertainment industry. We understand the industry’s various quirks, ins and outs, and financial laws.
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.