How is it already April and taxes are due? Last month, I was already feeling a sense of dread as the April 18th deadline approached, the pile of W2s and 1099s just kept getting bigger, and letters from the IRS remained unopened on my desk. I don’t even have a retirement account. I frantically Googled how to do finances on your own and came across an email from the Roundtable about a webinar on taxes for teaching artists. It felt like a sign.

There’s something comforting about commiserating in the daunting task of finances as a community. I have eleven W2s for 2021 and five 1099s, while my sibling with their salaried job has only one W2, earns more than me, and lives in a state without local and state taxes.

Additionally, I struggle as an artist who teaches with managing my earnings. Sometimes I’m paid weekly and other times monthly. Sometimes I do a gig and that money has to stretch over the course of three months. How do I manage that? For example, I’ll teach a stage combat workshop in the Bronx, get hired to do voiceover for a book, and then receive a stipend to sit on a panel for the Roundtable. Once I get the check for these gigs and then spend that money on rent, groceries, and Netflix, I move on to the next set of gigs. At the end of the year, I get a bill owing over 10k in taxes and freak out, asking how did this happen? 

On March 1, 2022, Dominic Comperatore of Empire Taxes led an unrecorded Zoom, in which he broke down the mystery of the 1040 as if it was an old stand up routine of his. It was really helpful to see the writing on the whiteboard of why I end up owing money on a 1099. There are many gigs that I do where I am considered an independent contractor, meaning I am self employed . Whereas when I am employed on a W2, I get taxes taken out. Dominic had a great explanation of the difference between these two forms. If you do a gig and your employer says they’ll pay you $100 and you get a check that is $67 you were working on a W2. However if you received exactly $100 then you were an independent contractor and when it comes to tax time, the IRS will be asking for the taxes on that job.

He explained the various taxes are taken out of W2 paychecks – Federal taxes, State Taxes, then Local taxes for us NYC folx, Social Security tax and Medicare tax. Social Security and Medicare taxes equal approximately 7.5% of your gross wages and your employer matches that tax and sends it to the IRS totaling 15%. So if you’re self-employed and no taxes are taken out, not only do you owe Federal, State, and Local but also the 7.5% for social security and medicare and the extra 7.5%  that your employer would have matched. He named that additional 7.5 % self employment tax and it’s in your best interest to save 20-30% of your earnings in a separate account (so you won’t be tempted to spend it) for tax season if you do independent contract work. 

He gave a similar webinar on taxes for the Actors Fund, an organization that offers free financial services and finance literacy, which is where I met Rebecca Selkowe, who teaches financial wellness. She helped me tackle my budget and get out of credit card debt in a webinar workshop she leads called “Managing Cash Flow”.

Managing Cash Flow was an opportunity for me to learn a freelancer’s budget and I got to see exactly where I am in regards to money. It gave me the courage to open the IRS letters, doctor bills, and credit card statements. That was the hardest part—preparing myself for the truth. And once I did, I had people to talk to about it. And it was much better to know than to spin circles and guess. I knew I didn’t have any retirement plan and I knew I had debt. However, once I took the class and faced everything, I was held accountable to these tasks on a weekly basis and I had an expert to guide me, which made it easier to tackle.

One thing that I learned from taking all these classes is how helpful communal learning is and how having a money buddy makes the work a lot easier. Growing up, there were topics that my family did not discuss, one of which was money. What scared me the most about stepping into a career as an artist was the financial instability. I needed an outlet or someone trusted to talk to about my financial struggles with and create a course of action. It took me a long time to finally get a Roth IRA and what helped me get there were the emails with my money buddy about my fears and research. It really helped me feel less alone.