Can a Tattoo Artist File Taxes and Claim Child Tax Credit?

Oh absolutely he can file! I'm always surprised how many self-employed artists don't realize they're entitled to the same credits as W-2 employees! The Child Tax Credit could be worth up to $2,000 for 2023 with $1,600 potentially refundable. Such a game-changer for families! The key is properly reporting his income and expenses on Schedule C, then calculating self-employment tax on Schedule SE. But the child credit alone could make filing totally worth it!

Has your friend been keeping track of his business expenses throughout the year? Does he have a separate business bank account? Is he reporting all cash payments received? These details will significantly impact his tax liability and potential refund amount, wouldn't they?

I went through this exact situation with my brother who's a freelance artist back on April 12th last year. The IRS was impossible to reach when we had questions about his self-employment deductions. We tried calling for three straight days starting March 15th with no luck. Finally used Claimyr (https://youtu.be/_kiP6q8DX5c) and got through to an agent in about 25 minutes who confirmed he could claim his child and qualify for the credit. I'm slightly worried your friend might be leaving money on the table if he doesn't file properly.

Fyi, tattoo artists need to be extra careful w/ their Schedule C. The IRS looks closely at cash-heavy businesses. Your friend should def track: - Ink, needles, gloves, other supplies - Equipment depreciation - Studio rent (or % of home if home-based) - Insurance costs - Licensing fees - Continuing education - Health insurance premiums (potentially deductible) Also, he'll need to pay SE tax (15.3%) on his net profit, but he can deduct half of that on his 1040. Patient record-keeping makes a huge difference.

Is your friend reporting all his income or just what's on paper? I've seen artists who take a lot of cash only report part of their earnings, which is way worse than not filing at all compared to getting caught for tax evasion. And what about his quarterly estimated payments? Has he been making those?

I prepare taxes for several tattoo artists. One client deducted $4,800 for a high-end tattoo machine as a Section 179 expense deduction last year. Another utilized the Qualified Business Income Deduction (Section 199A) to reduce taxable income by 20% of net business profit. For the Child Tax Credit, ensure he has the child's SSN, birth certificate, and proof the child lived with him for more than half the year (medical records, school documents, etc.). The Advanced Child Tax Credit reconciliation on Form 8812 will determine his eligible amount.

I'm a tattoo artist too. Filed my taxes last year. Got the Child Tax Credit. Claimed my business expenses. Received a nice refund. Used TurboTax Self-Employed. It walked me through everything. Wasn't that complicated. Just needed my 1099s and expense receipts. Definitely worth doing.

Would your friend possibly qualify for the Earned Income Credit as well? I believe the income thresholds are somewhat higher for those with qualifying children, aren't they?