Los Angeles attracts artists, creators of content, filmmakers, and freelancers to create their ideas a reality. Following your dream, though, remember to tap into valuable tax deductions that minimize taxable income while leaving more of your hard-earned money in your bank account.
If you're a LA-based freelancer, creative, or small business owner filing Schedule C for your operations, here are 12 unique deductions to assist you in maximizing your 2024 tax benefits.
1. Creative Supplies and Equipment
Whether you're filming a YouTube video in Venice or capturing stunning photography in Santa Monica, equipment of your profession is tax-deductible.
-Qualifying Deductions:
Cameras, lenses, and audio recording equipment.
Lighting kits, gimbals, and tripods.
Software and editing apps (like Adobe Creative Cloud or Final Cut Pro).
External storage media and computers.
2. Home Studio and Office Space
The majority of LA creatives work out of their homes or have a small studio to work in. If you allocate part of your home to business, you can claim a home office deduction. Remember, it must be an extra and separate room used only for this purpose.
3. Training, Classes, and Skill Development
In order to stay current in the constantly changing creative field, it is necessary to invest in yourself. Luckily, costs associated with honing your craft are deductible.
-Eligible Deductions:
Acting or improv classes, workshops on photography or film, software training programs or websites such as Skillshare or MasterClass.
4. Website, Hosting, and Online Platforms
Whether you’re showcasing your portfolio or selling digital art, your website expenses are fully deductible.
- Eligible Deductions:
Domain registration and hosting fees, website design and maintenance, E-commerce platform fees (like Shopify or Etsy).
5. Marketing, Promotion, and Advertising
Promoting your services is key to success in LA’s competitive creative space. Any money spent on self-promotion or branding can be deducted.
-Eligible Deductions:
Google ads, Instagram promotions, and Facebook ads, business cards, flyers, and promotional materials, fees paid to social media managers or for SEO services.
6. Travel and Transportation
If you're traveling around LA to meet clients, attend photoshoots, or industry events, your transportation and mileage can be deducted.
-Qualifying Deductions:
Business mileage ($0.67 per mile for 2024), parking, tolls, and ride-sharing services like Uber and Lyft, airfare, hotel stays, and per diem for business travel.
Pro tip: Use apps like MileIQ to automatically log business mileage.
7. Wardrobe, Props, and Costumes
Performers and actors in LA can deduct the cost of specialty wardrobe, props, and costumes required for work.
- Eligible Deductions:
Clothing and costumes that require performance, props or set design materials used in film, theater, or content creation.
Remember: Normal street clothing is not deductible, even when worn for work.
8. Software Subscriptions and Creative Tools
Subscription services that enhance your creative business are tax-deductible.
- Eligible Deductions:
Adobe Creative Cloud, Canva, Figma, and other design programs, audio and video editing software, project management tools like Asana or Trello.
9. Coworking Space and Studio Rentals
If you work out of a coworking space like WeWork or lease a studio for creative purposes, these costs are deductible.
- Eligible Deductions:
Monthly coworking memberships, private office rentals, studio space for photography or film.
10. Licensing, Union Fees, and Professional Memberships
Most freelancers and creatives in LA have professional memberships with deductible costs.
-Eligible Deductions:
SAG-AFTRA union dues, CPA, or other licensed professionals' licensing fees, local group memberships like the Los Angeles Chamber of Commerce.
11. Insurance Premiums
Business insurance is a necessity, and certain insurance policies are deductible.
-Eligible Deductions:
General liability coverage, errors and omissions (E&O) coverage, cyber protection or data security insurance.
12. Event, Networking, and Industry Expenses
Network while attending events, so key in LA's creative universe.
-Qualified Deductions:
Costs on expo booth rental or industry trade shows.
Conference or networking mixers related to your line of work.
Bonus: Tax Incentives Unique to California
If you're working in the booming LA sphere of film, television, or digital media, you can earn California's Film & TV Tax Credit Program, or some other incentives aimed at the creative business sphere. These are for larger productions over $1 million.