Congressional Republicans agreed on a new tax bill Wednesday and, while details are not yet available, it is known that both the Senate and House bills that preceded it would eliminate middle-class tax deductions for agent and manager commissions, union dues, training classes and other business expenses, while preserving deductibility of those items and more for top-earning talent, who typically use a mechanism called loan-out corporations, which are unaffected by the proposed change.
As a result, some working actors would see their taxes almost quadruple, according to an analysis by the stage actors union Actors’ Equity.
“These draconian changes are mean,” said Equity secretary-treasurer Sandra Karas, who is also a practicing tax lawyer and has prepared by her own estimate hundreds, probably thousands of entertainers’ tax returns. “They slap working people in the face … performers get the shaft.”
“I guess that’s the purpose,” she added during an interview several days ago. “It will change the math on how long people can stay in the industry.”
“This bill is not policy, it’s payback,” said California Association of Realtors chief economist Leslie Appleton-Young, who has been monitoring and analyzing the legislation.
…because of their high expenses, working- and middle-class entertainers do itemize, and for them the tax bill looks to be a disaster. They lose the personal exemption and the deductibility of business expenses and SALT.
* Another actor, who earned over $87,000 paid $9,665 but would have paid $13,294 under the Republican legislation, an increase of $3,629 of 37 percent.
* A married couple, both performers, who earned about $65,000(or about $32,000 each) paid $1,228 in taxes but would have owed $4,535 under the new law, an increase of $3,307 or 269 percent. In other words, their taxes nearly quadrupled.
(Excerpt) Read more at hollywoodreporter.com …