It’s that time of year again. Doing a tax return is painful for just about everyone. For artists and performers, it can be especially excruciating, given their often self-employed status and the labyrinth of deductions for those types of returns.
Siblings Mark and Alyssa Fox can help. The Foxes began working for the accounting firm of their aunt, tax accountant Lynda Mohs, while in college. After graduating with psychology degrees, they earned Enrolled Agent certification. They chose this accreditation in lieu of certified public accountant status because of their desire to work with small businesses and self-employed people rather than public companies. Enrolled Agent testing, conducted directly by the Internal Revenue Service, involves only tax law, from individual to corporate taxes to estates and retirement plans.
The Foxes started Fox Tax Service in 2004. Their first clients were creative-type friends whose returns they had filed on weekends. But word of mouth spread fast, and the Twin Cities creative community has been doubling the firm’s clientele base every year since it opened. Fox Tax now also offers bookkeeping, payroll, and consulting services.
To help artistic clients keep financial things together between visits to Fox Tax, the firm developed the Creative Tax Planner: A Guide for Artists and Musicians. On the whole, recordkeeping isn’t a strong suit for artists. According to Mark Fox, “creative people tend to be rather disorganized.” The kit includes a day planner, receipt file, and a glossary of what to keep track of and general tax rules. It has earned accolades from the likes of local rocker Mark Mallman, whose testimonial on Fox Tax’s Web site reads: “The Creative Tax Planner is a godsend on tour and lets me worry about the show, not the dough.”
Because the IRS code for so many of Fox Tax’s clients is “independent writer, artist, and performer,” Mark Fox says it’s difficult to pinpoint the number of musicians, visual artists, and performers he serves. However, of the firm’s 2,500 clients, more than 75 percent are self-employed in some way or have a small business, and a few hundred are S-corporations and partnerships. The rest are individuals. More than half of the firm’s clients are self-employed in a creative field. And thanks to the Internet, Fox Tax’s customer base extends beyond Minnesota.
Fox Tax’s bright and airy modern offices also include a gallery space in the front lobby.
“The gallery definitely works for marketing,” says Mark, citing street traffic that’s increasing as their Northeast Minneapolis neighborhood develops; nearby art openings typically draw a crowd of a few hundred people.
“I’ve taken some of my interests and made them part of this business,” he continues, “which then allows some tax advantage, but also it’s a business advantage. It brings me business, but I also get to do—and deduct—what I love.”
