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Is This Right? I pay the Taxes on My Agent's & Manager's Commission??? Login/Join
 
Sean Penn
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I've been using Actors Tax Prep (David Rogers)for years and have been told, basically, I make 1000.00, I'm taxed on 1000.00 even though I never saw the 100.00 that went to my agent. My agent is then also taxed on his 100.00 as income. Now yes, I can deduct this as a business expense on my schedule "C" but the last 3 years my acting income has been less than 50,000.00 so I take the higher "standard deduction" because my 10% agent commission and other acting expenses are less than 5,000.00 (I file jointly).

This is different from the "hiring someone and paying them with already taxed dollars because 2 different people are being taxed on the same dollar, earned from the same job.
It's grossly unfair. That 100.00 commission should come off the top of your gross earnings (as you never received it and someone else is paying tax on it) and you should get your business deductions or standard deduction on top of that. That's how it used to be in the early 80's when I started this crazy journey.
 
Posts: 9 | Location: Los Angeles | Registered: June 28, 2010Reply With QuoteReport This Post
Nicholas Cage
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quote:
Originally posted by CallMeAl:
Now yes, I can deduct this as a business expense on my schedule "C"

That's what I'm talking about.
quote:
I'm taxed on 1000.00 even though I never saw the 100.00 that went to my agent.

Are you sure you're not talking about withholding?
 
Posts: 44 | Location: Chicago | Registered: October 23, 2011Reply With QuoteReport This Post
Glenn Close
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ManagerDad, the actor pays taxes on his income and then uses the rest (post-tax dollars) to pay his reps. If the actor meets certain qualifications, they can then file a tax return claiming commissions as expenses and then get a refund of their overpaid tax. However, the initial payment to the reps is from posttax dollars (net not gross). Moreover, you may not meet the qualifications to claim the full amounts as a deduction. For example, one of my kids has met the alternative minimum tax (AMT) on previous occasions and not been able to take the full deduction. So it's paid from post-tax dollars and then you get some of the overpayment back.

CallMeAl, you and your agent are indeed paying taxes on the same money, but are not earning it for the same job. You are earning it from performing acting services for hire for company X (Paramount, NBC, whoever) Company X is your employer. Your agent is earning it from working to secure employment for you. You are your agent's employer.

ManagerDad, withholding IS tax. You pay the tax to the government by them withholding it from your check. If you overpay your tax liability because they took too much out, you get a refund of overpaid taxes.
 
Posts: 368 | Location: Los Angeles | Registered: December 27, 2009Reply With QuoteReport This Post
Al Pacino
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There's a line somewhere on the tax form that you put commissions on, you can also do it as a business expense especially if you got taxed on it.
 
Posts: 266 | Location: seattle | Registered: August 14, 2007Reply With QuoteReport This Post
Newbie
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Im doing my taxes this weeekend and i have the same problem.

Any other additional advice on this subject?
 
Posts: 2 | Location: los angeles, ca | Registered: March 09, 2013Reply With QuoteReport This Post
Morgan Freeman
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Damn. How do you keep track of all this throughout the year?
 
Posts: 120 | Location: LA | Registered: August 26, 2011Reply With QuoteReport This Post
Newbie
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This is a very messed up situation. I have been unable to take my due and commissions as deductions on my taxes because I get hit with the Alternative Minimum Tax. That means that about 10% of my income is being taxed twice (by my manager and myself), and all my other income related expenses are not deductible as well. I attempted to put it all on a Schedule C back in 2004 and 2005 and got audited with hefty fines. I tried to explain the unfairness of the situation to the auditor and she just had glassy eyes, couldn't care less. If you fall in this sweet spot, don't make enough to be incorporated but make enough to be effected by AMT, you're gonna be treated very unfairly by this rule and there is nothing you can do about it. I am rather shocked that this issue has not been addressed and remedied by our union or people in the tax field. It is mind boggling like some many other unfair laws in our tax codes.
 
Posts: 1 | Location: CA | Registered: February 04, 2014Reply With QuoteReport This Post
Al Pacino
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You don't need to make a certain amount to be incorporated, that's not how that works, so I'm not entirely sure what you're trying to say (C-corps are subject to the AMT, although S-Corps aren't).

I'm just gonna suggest VITA as has already been suggested in another thread.
 
Posts: 741 | Location: New York | Registered: January 25, 2013Reply With QuoteReport This Post
Newbie
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Having worked as an actor for over 35 years, I’ve encountered this situation many times. My solution is to find a few employers every year who will pay me on a 1099, rather than on a W-2. I can then deduct agent and manager commissions, union dues, electronic submissions, pics & resumes, etc directly against the 1099 income. Many smaller employers are willing to pay on a 1099 — independent films, theater companies, still photo shoots, college/school teaching honorariums etc. Although you have to pay additional self-employment tax for FICA and MEDICARE on 1099 income, some years I’ve been lucky to have 5k-6k in 1099 income, but whittled it down to $0.00 with business expenses. And then you get to take the standard deduction with your W-2 income.
 
Posts: 1 | Location: NYC | Registered: February 05, 2014Reply With QuoteReport This Post
Jack Nicholson
posted Hide Post
quote:
Originally posted by FkdbyIRS:
This is a very messed up situation. I have been unable to take my due and commissions as deductions on my taxes because I get hit with the Alternative Minimum Tax. That means that about 10% of my income is being taxed twice (by my manager and myself), and all my other income related expenses are not deductible as well. I attempted to put it all on a Schedule C back in 2004 and 2005 and got audited with hefty fines. I tried to explain the unfairness of the situation to the auditor and she just had glassy eyes, couldn't care less. If you fall in this sweet spot, don't make enough to be incorporated but make enough to be effected by AMT, you're gonna be treated very unfairly by this rule and there is nothing you can do about it. I am rather shocked that this issue has not been addressed and remedied by our union or people in the tax field. It is mind boggling like some many other unfair laws in our tax codes.
use tax software, dont get greedy
 
Posts: 307 | Location: LA | Registered: June 04, 2012Reply With QuoteReport This Post
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