Accountant for Film, TV and Entertainment Industry Workers in Los Angeles

Situations We Handle

A W-2 actor or crew member with several employers. The IRS's own audit guide for the industry says that the majority of entertainers and technicians are treated as employees and receive a Form W-2, and a year of work on several productions produces a stack of them. Unreimbursed employee expenses are not deductible on the federal return because the miscellaneous itemized deductions subject to the 2 percent floor were suspended; Form 2106 remains only for Armed Forces reservists, qualified performing artists, fee-basis officials and impairment-related expenses, and a qualified performing artist is an employee of at least two employers who earned at least $200 from each of two of them, had performing expenses above 10 percent of performing-arts gross income and adjusted gross income of $16,000 or less. California does not conform: Schedule CA (540) line 19 takes unreimbursed employee expenses from a Form 2106 completed with California amounts, so agent commissions, union dues, headshots, equipment and classes still reduce California tax for an employee who itemizes. We prepare the federal return from the W-2s and the California return with the Form 2106 add-back, for $650–$900. See Individual Tax Preparation.

Residuals. Residuals are periodic payments for reruns of commercials, episodic television and other reuse; the payer typically reports them on Form W-2 or Form 1099-MISC, SAG-AFTRA is the primary collector and distributor, and residuals can also be paid to a loan-out corporation. Each residual W-2 or 1099-MISC goes on the return in the year it is paid, and when the loan-out receives them they are the corporation's income, not the performer's. We tie the statements to the return so that nothing reported to the IRS is missing from it.

A performer or crew member paid on 1099. Income from work as a nonemployee is reported on Schedule C whether or not the payer sent a Form 1099-NEC, and whether it was paid in cash, property or goods; the form itself is required for payments made in 2026 once a payee receives $2,000 or more in the year. Self-employment tax is 15.3 percent, 12.4 percent for Social Security on earnings up to $184,500 for 2026 and 2.9 percent for Medicare, on 92.35 percent of net earnings once they reach $400, with half of it deductible, and an Additional Medicare Tax of 0.9 percent applies above $250,000 for joint filers, $125,000 for married filing separately and $200,000 for others. An agent's commission, which the IRS guide puts at typically 10 percent of gross receipts, and mileage at 72.5 cents a mile for January through June 2026 and 76 cents for July through December are among the Schedule C deductions. Estimated payments are due once $1,000 or more of federal tax is expected, and California requires them from $500, paid 30, 40, 0 and 30 percent on April 15, June 15, September 15 and January 15. The return with Schedule C is $1,100–$1,800. See Freelancers and 1099 Contractors.

A loan-out corporation. California law describes a loan-out company as a corporation, or an LLC taxed as one, whose main activity is personal services for motion picture production companies and whose principal worker owns more than 10 percent of its stock; a motion picture payroll services company may be treated as the employer under Unemployment Insurance Code Section 679 and must report its payments to loan-out companies to the EDD each quarter, beginning with the quarter ending March 31, 2026. As an S corporation, the loan-out pays its shareholder-employee reasonable compensation through payroll before any distributions, judged on duties, time, training and what comparable businesses pay, and the health premiums of a more-than-2-percent shareholder go in Box 1 of the W-2. It pays California 1.5 percent of its net income with an $800 minimum, waived in its first taxable year, and an officer of the corporation is an employee for EDD purposes, so the salary carries unemployment insurance, employment training tax, disability insurance and California withholding. We compare the tax under each structure with your own booking figures before anything is formed, then set up the corporation and file Form 2553 within 2 months and 15 days of the start of its first tax year, run the owner's payroll, and prepare Form 1120-S with Form 100S and the owner's return from the same records. See CPA for S Corporation Owners and Business Formation.

7 percent withheld from a check. California withholds 7 percent on payments to nonresident payees for services performed in California, including nonresident entertainers, once the California-source payments exceed $1,500 in a calendar year; a loan-out corporation not qualified with the California Secretary of State and without a permanent place of business in California is a nonresident payee, and the withholding agent files Form 592 on April 15, June 15, September 15 and January 15 and gives the payee Form 592-B. Form 587 is what the payer uses to work out whether withholding applies, and Form 590 is the exemption certificate a California resident, or a corporation qualified to do business in California with a permanent place of business here, gives the payer; it does not apply to wages. Amounts withheld are credited on the California return from the Form 592-B figures.

Working on location. The standard meal allowance can be used by an employee or a self-employed person; lodging has no standard amount and is deducted at actual cost; meals are 50 percent deductible and entertainment expenses are not deductible; an allowance above the federal rate, or paid without substantiation of time, place and business purpose, is income. The high-low per diem rate is $319 a day for a high-cost locality, which includes Los Angeles, with $86 for meals, for travel from October 1, 2025 through September 30, 2026, and $329 with $86 for meals from October 1, 2026. A performer or crew member who works in another state during the year may have a nonresident return there; California gives a resident credit on Schedule S for net income tax paid to another state, and the return with several states is $2,500–$4,500.