Artist with a side job?

Image: Senad Alic
For each column in the rechtReeKs series, the Arts Union chooses an appropriate image created by one of its member artists that has no relation to the issues in the article.

After a week in Zeeland, with the twittering of the birds still in my ears, ordinary life began again with all the worries, stammering and wise counsel that goes with it. Upon returning to the office, the (digital) files were figuratively piled high on my desk. In the pile ONEn file with a great question to answer in this column.

An artist who also works as a teacher at an art school wonders if this could affect his self-employment deduction. This is an important deduction for the self-employed whereby a fixed amount can be deducted from one's profits, thus reducing one's tax bill considerably. A nice tax break, in other words.

An artist who also works as a teacher at an art school wonders if this could affect his self-employment deduction

It strikes me that many artists have side jobs. They are self-employed and also work out of interest or for the sometimes much-needed side income. For the self-employment deduction, this can certainly be relevant. It can make the difference between a deduction or not.

To take advantage of the self-employment deduction, you must be an entrepreneur and meet an hour criterion. This means that in a year you spend at least 1,225 hours on your business, an average of 23.5 hours per week. This includes all time. This includes time spent on research, acquisition, grant applications and administration. A condition is that this time can be justified with invoices, applications and your diary, for example.

The hour criterion is often fairly easily met and seems guiding, but it is not. Entrepreneurship is at least as important. Besides the declaration of profit from business, what is important is that being an artist must be the main activity. Actually, the question is always: are you an artist with a side job or do you have a side job as an artist?

Are you an artist with a side job or do you have a side job as an artist?

While instinctively and artistically you are undoubtedly an artist with a side job, legally and tax-wise it is not necessarily so. Case law is based on the description commonly used in business economics. Therefore, to qualify as a business, there must be a sustainable organization of capital and labor and also profits must be made or expected.

This is quite factual and revenue-oriented. Case law shows this as well. For example, the court ruled that an artist who, in addition to her employment of three days a week, suffered a loss for several years in her practice as an artist could not use the self-employment deduction. There was no profit and none was to be expected, the ruling said. The same applies to the artist who earned almost all of his income from his job as a teacher. His activities as an artist were therefore regarded as 'other work'. In both cases the tax inspector was allowed to correct the tax assessment, resulting in an additional assessment (including substantial interest).

If you have a hybrid practice, keep in mind that the artistry holds sway and you remain essentially an entrepreneur.

With a small side job, this will be easier to sustain. You may also have additional benefits in that case. If the work of your side job is closely related to your work as an artist, it is possible to have the hours you make in employment count toward the hour criterion of your own business. This is possible with the so-called absorption scheme. This requires permission from the tax authorities first, so please contact them if this applies to your situation.

Meanwhile, I get to work on the rest of my pile.