Union vs Non-Union
Every serious actor who has worked in the industry has heard of union work and non-union work. Although most actors strive to become a member of Actors' Equity or the Screen Actors Guild, some actors find it more beneficial to stay non-union. It is also not uncommon, especially in the Twin Cities, to find actors that do both union and non-union work. This distinction has a tremendous impact on how you can deduct expenses. Here, I will show you the three biggest differences between union work and non-union work when it comes to the subject of taxes, and how you can navigate through these difference when it comes time to file your return.
NOTE:This advice also applies to anyone who plans to work as an independent contractor.
Difference #1: Employee vs Independent Contractor
Union: You are considered an employee, which means you have to deduct all of your business expenses as an employee and NOT as someone who is self-employed.
AS OF 2018 ONLY EMPLOYEE EXPENSES INCURRED BEFORE JANUARY 1, 2018 ARE DEDUCTIBLE FOR FEDERAL RETURNS. THIS MEANS THAT UNION-RELATED EXPENSES ARE NO LONGER DEDUCTIBLE FOR FEDERAL RETURNS AFTER THE 2017 TAX YEAR.
HOWEVER, UNION EXPENSES ARE STILL DEDUCTIBLE IN SEVERAL STATES (i.e. MN, CA, AND NY). BE SURE TO CHECK YOUR LOCAL STATE LAWS.
Non-Union: You are considered an independent contractor, which allows you to deduct all of your business expenses as a self-employed individual.
This is the most important difference between union and non-union work because all of the other differences that will be discussed here are built on this fundamental distinction. This distinction also applies if you are hired in any other capacity outside of acting. Generally, if you are hired as an independent contractor you are not required to fill out an I9 form before you begin work. If you are ever unsure about whether or not you are considered an employee, simply ask your employer if you are an independent contractor or an employee.
Difference #2: W2 vs 1099-NEC
Union: You will receive a W2 form in the mail from your employer when tax season arrives. As a result, your income, social security, and medicare tax will be withheld from your paycheck.
Non-Union: If you made more than $600 during the year with a SINGLE employer, then you will receive a 1099-NEC form from that employer when tax season arrives. If you made less than $600, then your employer is not required to send you a 1099-NEC form. However, you are still required to report all of your income from your non-union jobs. Also remember that no tax will be withheld from your wages, so depending on your circumstances, you may have to pay estimated tax throughout the year. See Estimated Tax for more information.
Difference #3: Form 2106 vs Schedule C
Union: Your business expense deductions will need to be reported on form 2106, which goes with a Schedule A, when your actual tax return is prepared. This means that, for the 2017 tax year, you can only claim business expense deductions if you choose to itemize as opposed to taking the standard deduction. Remember that employee expenses will no longer be deductible for federal returns after 2017, but will be deductible for certain state returns.
Non-Union: Your business expenses will be recorded on a Schedule C, which will then be deducted directly from your gross income IN ADDITION to your standard deduction or itemized deduction.
This is why it is important to keep union and non-union business expenses separate. If you work in any other capacity, such as a designer, director, choreographer, or technical director for a community theatre, school, or other organization, it is important to remember that expenses related to W2 wages should be treated as union work and all others as non-union work.