One day not too long ago, a friend said to me regarding a beautiful photograph he had taken “I’ll sell you my photograph for you to paint if you give me half of what you sell the painting for”. I know that he was kidding but I found it most humorous and somewhat depressing, as his humor was somewhat based on reality. Sometimes it seems like everyone wants a piece of the pie!
My response to my good friend was “After I pay the gallery half the price of my painting and then you get half of the half, and then I pay half of my quarter that’s left to taxes, what should I do with all the money that’s leftover? Should I put it all in the bank so I can get 0 to 1% interest a year? Some banks want to actually charge you interest and fees for the service of holding onto your money. Should I put it in the stock market and try to time it right between the bubbles? Some would like to raise the capital gains rate to the regular much higher tax rates in which case, why should I put all of the left over money in a much riskier investment? What should I do with ALL the leftovers? Maybe I’ll reinvest it in the business???
Anyway, you can tell it’s that time of year, tax season. For someone who has an art degree and an accounting degree, I always find the transition between painting and year end taxes interesting.
As I prepare to load the latest edition of TurboTax - Home and Business, I am reflecting back on where all of the money went in 2011. Fortunately, I use Quicken accounting software to keep track of income and expenses. Running a few reports quickly reveals where it all went: all those $40 canvases and their frames, the $40 brushes, $35 tubes of cadmium paint, the high price of turpentine to clean brushes, professional photography, the webmaster, the monthly web fee, the high speed cable fee and on and on. Not to mention healthcare costs for us self-employed, that just went up 25% this year after going up 25% last year!
Framing costs are kind of interesting to me. When I frame my paintings and galleries take half of the total sale, I’m only getting back half of the price of the frame.
Mix in non-business expenses like a 20% tip on dining out after the local Williamsburg restaurants charge you a 10% food tax, the ever increasing price of gas, the 5% sales tax we pay on retail items, the ever increasing cost of leisurely sports like golf and the money my golfing buddies take from me every time I play, and I realize I better get back to work!
I just finished a portrait painting last week. Today I’m hoping to finish my Schedule C, Schedule A and B, Schedule D, Form 4562, Form 8889, Form 8949 Home Office, Form 1040 and then move on to my Virginia tax return!
There are way too many slices being cut out of one pie. Death and taxes are guaranteed in life and you have to work hard just to keep a few pieces of your own pie!
Now that I’ve used the left side of my brain, I can’t wait to use the right side of my brain and get back to painting!!!!!