Many “normal” people can’t help but look at the lives of celebrities with a little envy.
Whether or not fans keep up with the Kardashians, there are bound to be one or two actors or musicians who have a lifestyle they can only dream about.
There are also the hefty paychecks for their “jobs” that seem downright fun and enjoyable to anyone working a 9-to-5 or service industry job.
Of course, celebrities are people too, and they can’t escape death and taxes any more than anyone else can. But when a career revolves around glamorous parties, jet-setting to press junkets, or attending the biggest Hollywood events of the year, tax write-offs are a wild laundry list of luxuries the rest of the world would gladly hoard their tax refund to afford.
Personal Expenses of the Rich and Famous
The most surprising thing about celebrity taxes? What they can’t write off.
Limo service, hair and makeup teams, custom suits, and weekly manicures all seem like necessary expenses to keep the image and reputation of stars intact around Tinsel Town.
The IRS, however, does not agree.
As anyone who’s struggled through an expense report after a hectic work trip will know, anything that isn’t “strictly business” with a receipt and careful description of its relevance to work is a no-go when it comes to tax time.
This means many of the trappings associated with being a celebrity aren’t legitimate tax write-offs. Even if an audition calls for a specific new outfit or the next blockbuster requires rock-hard abs, any purchase that can be considered beneficial to a celebrity beyond the work at hand doesn’t belong on a deduction list.
After all, who doesn’t want a new outfit or a hot body?
No Business Taxes Like Show Business Taxes
Most celebrities have worked years to become successful and accomplished enough to rack up a considerable tax bill.
If a celeb wants to survive tax season audit-free, their CPAs have to be extra careful about what counts as a business expense.
According to the staff at MBA@Syracuse, the online MBA degree from Syracuse University, CPAs to the stars have to discern what costs are truly beneficial to the business of being a box office or Billboard chart darling, rather than just beneficial to the celebrities themselves.
Depending on their specific career, celebrities can write off as business expenses things that most people pull from their “fun budget.”
A magnificent gown for an award ceremony or a plane ticket to scout an exotic location for a new project could easily be justified as an unavoidable cost of doing business.
Netflix, books, movie tickets – these entertainment indulgences are legitimate research for a celebrity and safe to deduct, as long as they are tracked and recorded properly.
Other typical write-offs, like home office space or business travel, are also fair game if handled responsibly.
What about the other costs of being a star?
There are complex ways to register as a “single-employee” company and shield income from taxes when working with movie studios or record labels.
This is where having a lawyer and an accountant on retainer come in mighty handy – and an extra expense many celebrities can justify.
