For those in the Hollywood entertainment industry or closely connected to it whose incomes were significantly displaced during the Writers Guild of America (WGA) and Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) strikes, it may be advantageous to consider some overlooked end of the year tax planning ideas. For many professionals in and around the entertainment industry, years of accumulation of retirement assets have led to meaningful balances in IRAs, 401(k) plans, SEPs, and other pre-tax retirement accounts. As taxable income for tax year 2023 is likely to be substantially below normal, potentially resulting in a much lower income tax bracket, it may be advisable for entertainment industry professionals to consider Roth conversions of some of their pre-tax retirement assets.
In early May 2023, the WGA went on strike after the guild and the Alliance of Motion Picture and Television Producers (AMPTP) failed to reach an agreement before their contract expired. The strike was prompted by unresolved issues in negotiations with studios including fair compensation for writers in the era of streaming services, a lack of transparency in streamers’ viewership data, and the impact of Artificial Intelligence (AI). In July 2023, SAG-AFTRA announced it, too, would strike after contract negotiations failed, citing similar concerns over streaming revenue and AI.
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