Studio Deduction Basics

• As an artist running a business, the sale of your art, you can deduct the studio costs along with other deductions on the Schedule C form you file as a sole proprietor business. The Schedule C is a form you submit along with the regular 1040A or 1040 form that calculates your profit and loss. The studio rent paid over the year would be deducted from your gross sales, reducing them so you pay less tax.
  
  

Calculating the Deduction

• The full rent can be deducted, provided you use the entire space for your art. Add the total rent over the year to get the total. For example, if you pay $675 monthly over a full year, that amounts to $8,100. If you share the space with another artist, record only what you pay.
  
  

Studio in the Home

• A studio in the home is trickier. You must figure the proportion of the space to your home. Do a square footage measurement of the studio. Divide that by the home's square footage to get a percentage. For example, a 315-square-foot studio in an 1,820-square-foot home is 17.5 percent. Multiply that by the home rent to get the studio deduction. The maximum deductible percentage for the studio is 55 percent of the total home square footage.
  
  

Exceptions

• There are some caveats. The space must be dedicated solely to the art business. If you watch television in the studio to relax at night or use it for other purposes, it is not deductible. For a studio in the home, you may not deduct the rent unless you report a net profit that year. You may, however, note what the deduction would have been and carry it over into a future year where you log a profit, and claim it then.