There are two major elements to your life as an actor; there is the 'artistic side' (probably the part that you love) then there is the 'business side'.
Think about how a big company runs things. They have a business bank account and business credit cards, they keep records of all business expenses, they keep records of all sales, they pay all their expenses from their business bank account, and they know when they have made a profit. You would certainly never see the CEO going out and buying printer supplies from his or her personal bank account.
Ask yourself, do you run your acting business like this?
If the answer is 'no', then you are NOT running a business. What you are doing is merely engaging in a hobby, and it may be an expensive one at that.
You might be saying:
“But I’m no accountant, I’m an actor.”
However, as challenging as it may initially seem, you can and must learn to keep proper track of your business finances and keep them separate from your personal finances.
Let’s take a look at some of the critical steps you should implement immediately:
|#1 - Open a Business Bank Account|
You can easily start a DBA (Doing Business As) which will allow you to qualify for a business account. Place your personal earnings (your day job) in your personal account and put your business earnings (acting jobs) in your business bank account. Pay for all of your personal expenses (rent, groceries, clothes, vacations, etc.) out of your personal account and pay for all of your business expenses (acting classes, headshots, etc.) from your business account.
|#2 - Have a Separate Business Credit Card (even if the card is in your personal name)|
Charge personal items to your personal credit card (hopefully you are paying off the balance every month) and business expenses to the card that you have designated for business. This way, if you are carrying a balance on your business credit card, then the interest (finance charge) will be tax deductible. This is not possible if there is even one personal expense on the card.
Right now, you may want to say:
“STOP! I don’t make enough money from
my business to pay for all of my business expenses.”
If this is the case, simply make a loan from your personal account to your business account and make sure you record that loan. When the business becomes profitable, it can then repay the loan.
|Why is it Important to Treat Your Business Like a Business and Follow the Suggestions Above?|
• If your business is not run as such, you will never be successful. And if you do not treat your business as a business, you will never make a business income.
• If you do not keep appropriate records that clearly indicate you are running a business, if you are audited, the IRS may classify your business as a hobby. This could mean loss of tax deductions and you may even have to pay penalties. This is not what you need when you are trying to make your business profitable.
• You will be able to track the progress of your business easily. You will be able to look back a year from now and say, “Wow! My income went up by that much?” Or, “Yes! I finally turned a profit this year!”
You can do this. Have faith in yourself and your business. It will grow and you will be successful. Just remember to keep the personal separate from the business and keep clear records of the two. Then you can watch your business grow and never look back.
ABOUT MIATA EDOGA
Miata Edoga, President and Founder of Abundance Bound, is an actor and business owner, well known for her popular Wealth Education seminars.
Abundance Bound provides financial education seminars specifically for actors, who are dedicated to their craft, but tired of always struggling financially; and who want to build financial independence without sacrificing their artistic goals and dreams. Clients receive a very specific, step-by-step system on exactly what they need to do to eliminate debt and make and keep more money, giving them time, energy and freedom to focus on their acting careers and doing what they love most.