KELLY MCEVERS, HOST:
When we sit down to do our taxes, we usually are going to fill out the standard 1040 tax form, where most of the lines are straightforward - name, Social Security number, wages. But some lines are strangely specific, like line 24, which refers to performing artists. Jacob Goldstein of our Planet Money podcast wanted to know, how did actors, mimes and jugglers get on the tax form?
JACOB GOLDSTEIN, BYLINE: Behind every odd line on our tax code is someone who wanted something. In the case of performing artists on line 24, that someone is a New York actor named Sandra Karas. Back in the '70s, Karas was doing the things actors do - shows in little theaters, commercials. And one spring, she decided to do her taxes. She went to something called an IRS reading room, where they had lots of tax forms and books and instructions.
SANDRA KARAS: I went into the reading room, and I said, where's the publication on actors, you know?
KARAS: Where's that? Where's that part, you know? And they said, you know, well, there's expenses, there're employee business expenses. You know, my eyes started to glaze over and...
GOLDSTEIN: They basically said actors schmactors?
KARAS: Yeah, right. Well, we don't - we don't like to use the term schmacting, because I certainly don't do that. But they said, I don't think you're going to find an actor part, but, you know, you'll find a lot of things that are helpful.
GOLDSTEIN: Sadly for Karas, the tax code treated actors like everyone else. She could write off her expenses, though, and she had a lot of expenses.
KARAS: Agents' commissions, promotional materials, transportation just looking for work.
GOLDSTEIN: Taxes became something of a hobby for Karas. She took tax classes, started helping other actors write all those expenses of their taxes. Then, in the early '80s, she heard something alarming. Congress wanted to make it harder for people to write right off work-related expenses, so she went to the head of the theater actors' union in New York. He went to enlist some other unions. They started going to Washington, and they got Congress to pass a new law that made deductions even more valuable for performing artists.
KARAS: We couldn't believe it. We just couldn't believe that it had happened. It was a big deal for a lot of little people.
GOLDSTEIN: You save more money off your taxes this way.
GOLDSTEIN: That's the bottom line.
KARAS: Yes. It's a sweet deal.
GOLDSTEIN: This is the law that put performing artists on your 1040 tax form. Today, Sandra Karas is a lawyer who does tax work. She's gotten to know form 1040 really well.
KARAS: We could go line by line, you know, through the front of the 1040, and you're going to see a special interest on every line.
GOLDSTEIN: And you are one of - you are one of those special interests.
KARAS: Yes, I'm one of those special interests, yes.
GOLDSTEIN: Deductions like the one Karas got for actors are the financial equivalent of the government writing people a check every year. They're a kind of government spending, but they're sort of hidden in the tax code, and that is kind of the point. If you had gone to Congress in '86 and said, performing artists are important for our culture; people who are really struggling and have these unusual high expenses deserve a check every year, what do you think they would've said?
KARAS: (Laughter). What have you been smoking?
GOLDSTEIN: One last thing - the law only applies to performing artists below a certain income level. The idea was to help struggling artists. When the law was passed back in 1986, the maximum income was $16,000 a year. Today, the cap is still $16,000 a year. Almost no one qualifies for this anymore. Karas says she's hoping for another big push to get Congress to raise the cap. Jacob Goldstein, NPR News. Transcript provided by NPR, Copyright NPR.