Making More Money From Art-2 – Government Art Subsidy
Lady In Red Dress and Louboutin Shoes
I had a very good reception to my earlier blog post about how you can make more money from art. I had many good comments and as far as I know, no bad ones. Group moderators allowed me to post on all groups – thank you.
So, here is my second post on the subject. It will explain a little about how you can get a type of Government Art Subsidy. Also, how some artists could almost immediately start making more money from art.
Profit
I have the utmost respect for those artists who produce art for art’s sake, and give it away, but profit is not a dirty word. Let us be clear about something – profit is not a dirty word. Bob Ross gave away every painting he did on his TV shows to raise money for Public Broadcasting. Bob also gave away many other paintings that he did. He profited though from the sales of his products, and good for him. Many artists pay good money to do certification courses (such as his) that allow them to charge a fee and teach under a brand name. They are entitled to make a profit, because profit is not a dirty word.
Even if you just donate your art, you should still sell some, and here is why:
Tax
First of all, a Government cannot tax a loss, they can only tax a profit. Governments are also supposed to look after those less fortunate than ourselves, by spending money on them. The Government does this by raising money to spend and the money raised is called taxes. They then spend the money, whether they spend it wisely is not the issue here. No one has to pay more in taxes than the law says they should. The taxman can use every legal means to get you to pay your taxes, and you can use every legal means to reduce your tax bill – the Government, and the Courts say you can.
To make use of legal tax rules that allow you to pay less in tax is called Tax Avoidance. Tax Avoidance is perfectly legal, pensions, IRAs and ISAs are a form of Tax Avoidance. Never mind that Apple, Amazon or Google move profits around in such a way to pay less taxes, it is legal. Some people consider this unethical, but it is legal. If Government wants to deal with this “unethical” behaviour then it can just change the law.
To hide money from the authorities, and not tell them about it means they cannot tax it. This is called Tax Evasion, and is a criminal offence – it is not legal. If you sell something at a craft or art show, the money received should be declared for tax. If like me, you sometimes accidentally put the money in the wrong pocket and don’t declare it, you have committed Tax Evasion and broken the law. Don’t panic though, simply make corrections later. The tax man visits craft and art fairs undercover (and monitors Facebook etc.) to see who is making money from hobbies and crafty type things. Don’t worry they are not looking for the smaller person, but the guys trying to play the system.
Trying to make more money from art is perfectly legal. Making more money means you pay a little more in taxes, that we hope will help others. You can also, indirectly, make more money from art by arranging things so that although, you make more money, you can pay less tax. It is legal to reduce your tax bill using the various tax breaks the Government gives you.
In 1922 an English Court decreed: “That the common man is under no obligation to arrange his affairs in such a manner that allows the Tax Man to take the largest sum thereof.”
The Government Art Subsidy
All artists, even those who give away their art should sell some of their art. If you sell some of your art, you then might have a taxable income. You can set off the cost and expense of producing your art against your taxable income. You need brushes, paints and canvas. Paints and canvases can be considered an expense, and brushes wear out so need replacing. Your travel costs to the shop where you get your art supplies, are expenses. Your travel costs to the places where you do your teaching are also legitimate expenses. You can set all of these expenses against tax.
But there is a catch, you have to pay tax before you can claim it back. Selling more art means therefore that you then become liable for tax, but you can claim it back. This is a good way to get a form of Government Art Subsidy.
Different countries deal with this type of extra income in different ways, but they all need you to keep records. A simple notebook where you just down details of expenditure will be fine. Get receipts for everything, and spend an hour or two at the end of every month putting it into a formal profit and loss statement. At the end of the year, use it in your tax return. Put it into a spreadsheet, or use some of the free basic accounting software out there. Doing this will make your life soooo much easier. It isn’t a real Government Art Subsidy, but you can see it as one.
Pricing Your Art
I am not going to go into details here about pricing art, but I will say this. If you are swamped with customers in one way or another. If you have too many commissions to do in too short a time, or your workshops are always selling out, there is one thing you can do almost immediately. Raise your prices a bit, and start to make more money from art. I will cover this more in my next post on this subject.
Thank you for reading this blog post.