Archive of Hannah Cole

Hannah Cole is an artist and an Enrolled Agent. She is the founder of Sunlight Tax.

Hannah has written 10 article(s) for AFC.

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Hannah Cole

Why Refusing to Pay Federal Taxes Is an Ineffective Protest of Trump

by Hannah Cole on February 22, 2017
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Frustrated with President Donald Trump’s first four weeks in office? So far, he’s rolled out a sloppy and disgraceful travel ban on Muslims (notably omitting countries he has business ties to), and used taxpayer money to pay for his sons’ jaunts to other countries to promote Trump family businesses. His presidency has been rife with conflict of interest but he has not released his taxes, so there remain few ways to prove it.

It’s not surprising, then, that a lot of talk has surfaced among artists and progressives about not paying income tax this year in protest of the Republican administration’s policies. Is this a good idea?

The short answer is, “No.”

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Rent Too Damn High? Deduct Your Home Studio.

by Hannah Cole on February 6, 2017
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One of the best tax breaks out there is the home office (or home studio) deduction. In tax terms, this essentially turns a portion of your nondeductible personal expenses (your home) into deductible business expenses (a workplace). A lot of people are confused about the rules, and some people are scared to take the deduction at all because they’ve heard that it can be a red flag to the IRS. As long as you are following the rules correctly, there is nothing wrong with taking the deduction. And it’s a big one! So here is some help.

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The Nitty Gritty: How To Prepare for Filing Your Taxes

by Hannah Cole on January 19, 2017
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Nobody likes filing taxes. But thinking ahead and getting your documents lined up reduce the stress of the process. Here are some key ways to prepare yourself for tax season, and get you ready to sit down to your own tax prep software or deliver an organized package to your tax preparer.

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Getting Organized: Financial Resolutions for Artists in 2017

by Hannah Cole on January 6, 2017
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As we enter a the new year, let’s take time to think about the priorities in our arts practices, and in our personal lives. You may roll your eyes at the idea of New Year’s resolutions, but there is evidence that writing down your goals actually helps you achieve them. So grab a pen, and let’s put some intention into 2017.

In my interview with artist Susan Crile about her eight year ordeal defending herself in US Tax Court, there was a lot of discussion about keeping records to prove the profit motive in one’s art practice. It brings up a good question for most of us: how are we doing on our own record keeping? If the IRS sent an audit letter tomorrow, would you feel good about the shape that your records are in? If the answer is not good, don’t panic. Here is a list of what you will need, and some thoughts on how to improve your record keeping going forward.

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An Audit Nightmare Turned Artist Victory: An Interview With Susan Crile

by Hannah Cole on December 15, 2016
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If your arts practice loses money for more than a couple years, the IRS may question the legitimacy of the business – specifically, the profit motive. Typically, they reclassify such a business as a hobby, and disallow the artist from expensing deductions past the point of their income from the activity. That’s bad news for any artist, but it was a near nightmare scenario for artist Susan Crile.

Crile spent eight years in tax court (from 2005-2013), defending her right to take losses. In this interview, we discuss how she proved her case, what it took, and what she recommends for artists in a similar position.

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Your Miami Tax Guide: Yes, You Can Deduct That Piña Colada

by Hannah Cole on November 29, 2016
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After a few weeks diligently absorbing the dark, awful post-election news, I’m ready to turn my attention to fun, sun, and travel deductions for the Miami art fairs.

Let’s talk!

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How Donald Trump’s Tax Plan Will Effect Arts Workers: There’s Bad Stuff Coming

by Hannah Cole on November 15, 2016
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It’s been a terrible week. Tuesday’s election of Donald Trump has already damaged the emotional wellbeing of our country and its citizens. He will do much worse in the long term.

Most immediately, many of us are feeling wrecked. I include myself in that group. I had envisioned taking my daughters to the inauguration of the first woman President, and assured them that a bully and an abuser would not be chosen by the American people. Not only will we not see the inauguration of the first woman President, but a bully and an abuser has been chosen by the American people. This is not the history I’d hoped my children would live through.

In the long term, it’s less clear what this means for us as a nation. There’s no way to predict the future, but if we want to see any kind of positive outcome we have to start organizing now. There are a lot of ways to participate. We can join protests, reach out to our neighbors. My weapon of choice, though, is to begin with the process of self-education. We can’t fight against powers we don’t understand. As a tax expert, I intend to help.

With the upcoming push for regressive tax legislation, it’s important to understand what’s being proposed and how it will affect us both as individuals and in the professional field in which we’ve invested our lives. Some of these changes may have a profound impact on both the high and low ends of the art market and non-profit sectors, so we need to be prepared.

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The Hustle: Tax Shelters for the Working Artist

by Hannah Cole on November 1, 2016
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The Hustle is a new bimonthly column in which artist and Enrolled Agent Hannah Cole discusses taxes and finance management for artists. She is the founder of Sunlight Tax. In this week’s column Cole examines tax shelters such as Flexible Spending Accounts and Healthcare Savings Accounts.

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What Makes An Artist Special? Nothing, According to the IRS

by Hannah Cole on October 18, 2016
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Being poor for art has a shelf life. It’s important to be brave enough to sacrifice income potential to follow your dreams, but to make a career in the arts happen, eventually a sustainable income and lifestyle has to be secured. Part of getting there, is knowing how to handle your taxes. Learning the ins and outs of this part of your practice will help you get through the tough times and the boom times.

We’ve had both over here at AFC, so we thought a few questions to an accountant might be useful not just for our readers, but for our own, self-serving purposes. In the following Q&A we tried to discern what, if anything was unique about artists taxes, how creatives can get the biggest tax breaks, and whether they should attempt to do their taxes on their own.

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Can I Get a Tax Deduction For the Artwork I Donated? Short Answer, No

by Hannah Cole on October 4, 2016
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Here’s the scenario: Your friend at Charity X wants you to donate one of your paintings to their upcoming fundraising auction. You’re on the fence, but she mentions the tax deduction, and so you agree. After your painting sells at the event, you get a letter from Charity X, intended for your tax records, stating the price your piece sold for.

This scenario is misleading to the artist.

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