Avoiding Hobby Loss

As artists, we not only put our hearts into our work but often times we also put a lot of money into our business in order to get out there and get exposure. Many people don’t realize that it’s not only art supplies or products we’ve created and purchased at wholesale to resell, but there are a lot of other expenses that go into being an artist: jury fees (to get into shows), show or booth fees (the cost to actually set up at an event — and many shows have both a jury fee and a booth fee), gas to get to and from the show, hotel, food while you’re traveling, online selling fees (like eBay and Paypal fees, or Etsy fees), postage (and maybe even postal box) fees, bookkeeping costs, legal fees, etc. The list goes on and on.

Really, when you start to add it all up, being an artist has to be a labor of love. It’s certainly not a get rich quick scheme.

The hard truth is that while you are getting established, there are only a few kind souls out there who will take a chance on you and buy your work. This means, you will most likely be paying out more money than you’re taking in. It takes awhile to really ramp up the process, especially if you don’t have publisher or gallery support. Even if you do have other people, it’s doesn’t mean you’re not going to have to get out there and get your hands into your own marketing. And, you have to keep it up. It’s too easy to lose momentum. I recently heard of an artist who gave up his website because he felt it was too expensive for his return on investment. I just felt sorry for him. I had to put my head in my hands just to keep from screaming in frustration. He’s got lots of fans. I just wonder what would’ve happened if instead of throwing in the towel, he had put an honest effort into consistently updating his website, maybe even learning how to do some of it himself if he really wanted to cut costs. Instead of being sporadic with his updates, he’d actually let his fans see a little into his life so they could feel like they actually knew him, what would happen to his stats then? Why not start a blog on his website? He has lots of valuable information and would be an awesome resource. Oh well, I guess golf was too important.

Anyway, I know a lot of us aren’t lucky enough to be successful yet. YET! But there are things we can do now, to protect ourselves in the future. One of the things we need to do is educate ourselves on the IRS hobby loss rules (since I’m writing in the U.S. I’m sure other countries have something similar in their tax codes; if you’re not in the U.S., please check our own countries tax laws and find out what you need to know). Here’s an article from Forbes I came across which I found interesting and I think you will too. Bottom line, if you want to be a business and be treated as such, do so from the very beginning. Keep good records. Keep your funds separate. We are always artists first, but we also have to be a salesman, marketer, and businessman. Oh, and keep good records and treat yourself like a business (if you missed that the first time).