Original Question: Adam Franklin, Posted March 7, 2019 at 4:37 PM
My wife works full time for an orchestra and receives all the benefits of such – predictable schedule, a contract for the year, insurance, etc. She receives a W-2 from them every January. She is for all intents an employee.
However, she also subbed for another much larger orchestra in another state this past year for about 12 weeks. These were anywhere from 1 to 3 week engagements. When she worked there, she was responsible for her expenses of travel, lodging, food. This added up to about 2500 miles round trip, a couple of flights, and around 70 days of meals. She received a W-2 from this group, even though she really didn’t enjoy any of the benefits of being an actual employee – she had no guarantees of work, no contract beyond 3 weeks, and definitely no benefits package. She did have taxes taken out and I believe pension contributions under the groups’ CBA.
What I am wondering is if she can treat this work and its expenses as any kind of self-employment and take above line deductions rather than fall under the unreimbursed employee business expense category, which creates a much more complicated situation – we would have to itemize her travel and costs for every ensemble rather than just the one she subbed with and a festival.
Unfortunately, if you receive a W-2, you are generally considered an employee for tax purposes. There are some exceptions; for example, taxable scholarships are frequently reported on form W-2 with no Social Security or Medicare taxes withheld. Statutory employees receive a W-2, but their income is reported on Schedule C allowing them to take deductions directly off income. To be considered a statutory employee, box 13 must be checked next to “Statutory Employee” on form W-2. The only Statutory Employees I’ve worked with are insurance agents and sales people, not musicians. To be an employee, length of engagement, benefits package, work guarantees, etc. are not really a factor. Many part-time employees do not receive any of these benefits, but are still considered “employees”. I assume your wife did have one benefit: the employer probably paid into her Social Security and Medicare accounts (if there is an amount in boxes 4 and 6 of the W-2, these amounts were withheld from your wife’s paycheck and also matched by the employer).
As an employee, expenses are reported either as miscellaneous itemized deductions on Schedule A or on form 2106 (Employee Business Expenses) which then flows to miscellaneous itemized deductions on Schedule A; form 2106 would be required with the mileage deduction you mentioned. There is one category of musician (or other artist) that can take expenses directly off income as an adjustment on page one of form 1040; this is a special category called “Qualified Performing Artist” (see my article about this on polyphonic.org), but one test to qualify for this status is that adjusted gross income (total of both spouses) must be less than $16,000, a difficult test to meet. If you cannot file as a qualified performing artist, I think you have little choice other than claim the expenses as unreimbursed employee business expenses.
Thank you for your question, but I doubt this is the answer you were looking for.