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Networking Seminar Notes.
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Networking Seminar Notes.
by Russell Brohier » Tue Feb 02, 2010 8:20 pm
This topic is for me to post notes from the various inforamtion seminars that we are doing.
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Russell Brohier - Posts: 20
- Joined: Mon Sep 21, 2009 7:59 pm
Re: Networking Seminar Notes.
by Russell Brohier » Tue Feb 02, 2010 8:22 pm
Taxation for Artists, February 2, 2010.
Nicola Rudzik, Artax
Similar Question which come up. Seminar is question directed.
Q1. Am I a business or not/
No marker to say you are a business. The true indicator is having a plan, an idea. Canada Revenue has recognised that artists may take a long time to show a profit. Rev. Can may allow you to write off for a number of years. Eventually they will like to see you making a profit. Being able to show you have background experience, education etc that will show that you will eventually make a profit. Renting a studio space is a write off.
Registration: Registration does not necessary mean you need a business account. You can still have cheques payable to yourself. Business account is not proof that you are a business. Personal business doesn’t really need the account. Keep a spread sheet.
When you are a business you are ahead of the tax game. You are able to deduct other expenses. Tax wise being a business is the way to go. Security wise is another story.
What do you do if you are both?
You can have a statement of business activities which will show that you can write of your art expenses from your other income.
You will need to have a cash reserve for paying taxes.
Some people with T4s can also write off expenses for the business.
Artists say they are so disorganised. Suggest that you keep envelopes for your receipts. Write on the receipts what was discussed. Keep envelops for types of expenses.
Income side you need to track more. Keep a spread sheet as to how much you received and from where. Track any income and when you have deposited it. Be more diligent tracking income.
Should I incorporate?
No is my usual answer. Usually when you are netting about 50k incorporation may work. Far more complicated with a separate corporate account. Need to do tax filing. With a corporation you need to put yourself on payroll and deduct payroll deductions (CPP, EI, and Tax). Go to a lawyer to make sure you incorporate properly.
Should I register for GST? You need to register if you make 30k gross in art/business income. This would include grants. Think about registering when you reach 20k. GST is charged on services only not products
PST. 8%: Purchaser exemption forms can be given to suppliers.
PST is charged when selling a product. Everyone has to register for PST/Vendors Permit.
http://www.rev.gov.on.ca/en/resources/s ... r_rst.html
RST decisions.
Photographers should charge PST and GST on everything. This is applicable for Commercial photographer, or commission work as photographer and painter.
You need to charge GST if you are selling your work within Canada. If you are selling something outside of Canada then you will need to keep track of your shipping records and sales records to prove the purchase was outside of the country.
HST: July 2010. Register after this comes into effect. Harmonized to 13%. If you are selling providing a service and make fewer than 30k you do not need to charge anything. If you provide a product you must charge 13%. You are now able to claim back the PST, thus lowering the price for businesses and in the end cost. As a business you can claim this back that you are paying. http://www.rev.gov.on.ca/en/taxchange/index.html
http://www.taxtips.ca/gst/onhst.htm
Keep receipts since you can not deduct without receipts.
Do not get caught up with the little things.
If you are in a common-law relationship you need to have your partner’s income and SIN.
Many artists get T$A slips for grants etc. If you get a $1000.00 you are actually getting less the GST.
RSPs deductions you deduct any contributions you make must occur March 1st to February 28th.
Medical costs include doctor bills, physiotherapy, and cost for medical drugs.
Children’s caregiver gets SIN to write off pay to the nanny etc.
Tuition can be written off. Workshops can be written off to your business.
Businesses:
If you are a registered business. List income, PST, GST Gross.
Meals you can only claim 50% including entertainment.
Totalling supplies or office supplies do not include anything that needs to be depreciated.
Electronics of any price need to be depreciated rather than written off. Computers and systems software is depreciated at different rates. Infrastructure equipment is also depreciated at different rates.
Cell phone need to show the dedicated business usage.
Transportation costs can be written off. Do not put TTC metro passes in this category though.
Home office: you can deduct a percentage of what you pay for the all house hold expenses (int on mtg only, gas, hydro etc.) Do not deduct more than 50% of the house because it will reclassify your home as a business space/commercial and you can be subject to other taxes.
Car you need to keep a mileage log regarding the car for your business usage.
New for 2009 going forward.
Home renovation tax credit: anything you bought for your home maximum credit would have been $1500.00.
Tax Free Savings Account is a bank account that allows your money to grow tax free, and it is capped at 5k. No penalties for withdrawals.
If you bought a new home as of January 27 2009 you get a 5k credit.
For any computer hardware and software between Jan 27 2009 to Feb 2011 you can claim 100% against your business.
If you are filing a few years at once call the tax office for the last information they have on record for you.
You can call that same number for RSP or other questions.
Art Donation: Art donation tax credit. According to Rev Canada you would need to report the donation as a sale. It is not a one to one write off. It is as if you sold the piece to the organisation, they gave you the money and you then donated back to them. It would be less than a third of the value.
Can deduct private health plan.
Business parking costs are not a percentage.
Nicola has a version of a chart of tax info and deduction. Email artax@rogers.com if you wish to have Nicola do your taxes and she will email this form to you.
http://www.taxes.ca/info/info-cra.php
http://www.taxtips.ca/glossary.htm
Nicola Rudzik, Artax
Similar Question which come up. Seminar is question directed.
Q1. Am I a business or not/
No marker to say you are a business. The true indicator is having a plan, an idea. Canada Revenue has recognised that artists may take a long time to show a profit. Rev. Can may allow you to write off for a number of years. Eventually they will like to see you making a profit. Being able to show you have background experience, education etc that will show that you will eventually make a profit. Renting a studio space is a write off.
Registration: Registration does not necessary mean you need a business account. You can still have cheques payable to yourself. Business account is not proof that you are a business. Personal business doesn’t really need the account. Keep a spread sheet.
When you are a business you are ahead of the tax game. You are able to deduct other expenses. Tax wise being a business is the way to go. Security wise is another story.
What do you do if you are both?
You can have a statement of business activities which will show that you can write of your art expenses from your other income.
You will need to have a cash reserve for paying taxes.
Some people with T4s can also write off expenses for the business.
Artists say they are so disorganised. Suggest that you keep envelopes for your receipts. Write on the receipts what was discussed. Keep envelops for types of expenses.
Income side you need to track more. Keep a spread sheet as to how much you received and from where. Track any income and when you have deposited it. Be more diligent tracking income.
Should I incorporate?
No is my usual answer. Usually when you are netting about 50k incorporation may work. Far more complicated with a separate corporate account. Need to do tax filing. With a corporation you need to put yourself on payroll and deduct payroll deductions (CPP, EI, and Tax). Go to a lawyer to make sure you incorporate properly.
Should I register for GST? You need to register if you make 30k gross in art/business income. This would include grants. Think about registering when you reach 20k. GST is charged on services only not products
PST. 8%: Purchaser exemption forms can be given to suppliers.
PST is charged when selling a product. Everyone has to register for PST/Vendors Permit.
http://www.rev.gov.on.ca/en/resources/s ... r_rst.html
RST decisions.
Photographers should charge PST and GST on everything. This is applicable for Commercial photographer, or commission work as photographer and painter.
You need to charge GST if you are selling your work within Canada. If you are selling something outside of Canada then you will need to keep track of your shipping records and sales records to prove the purchase was outside of the country.
HST: July 2010. Register after this comes into effect. Harmonized to 13%. If you are selling providing a service and make fewer than 30k you do not need to charge anything. If you provide a product you must charge 13%. You are now able to claim back the PST, thus lowering the price for businesses and in the end cost. As a business you can claim this back that you are paying. http://www.rev.gov.on.ca/en/taxchange/index.html
http://www.taxtips.ca/gst/onhst.htm
Keep receipts since you can not deduct without receipts.
Do not get caught up with the little things.
If you are in a common-law relationship you need to have your partner’s income and SIN.
Many artists get T$A slips for grants etc. If you get a $1000.00 you are actually getting less the GST.
RSPs deductions you deduct any contributions you make must occur March 1st to February 28th.
Medical costs include doctor bills, physiotherapy, and cost for medical drugs.
Children’s caregiver gets SIN to write off pay to the nanny etc.
Tuition can be written off. Workshops can be written off to your business.
Businesses:
If you are a registered business. List income, PST, GST Gross.
Meals you can only claim 50% including entertainment.
Totalling supplies or office supplies do not include anything that needs to be depreciated.
Electronics of any price need to be depreciated rather than written off. Computers and systems software is depreciated at different rates. Infrastructure equipment is also depreciated at different rates.
Cell phone need to show the dedicated business usage.
Transportation costs can be written off. Do not put TTC metro passes in this category though.
Home office: you can deduct a percentage of what you pay for the all house hold expenses (int on mtg only, gas, hydro etc.) Do not deduct more than 50% of the house because it will reclassify your home as a business space/commercial and you can be subject to other taxes.
Car you need to keep a mileage log regarding the car for your business usage.
New for 2009 going forward.
Home renovation tax credit: anything you bought for your home maximum credit would have been $1500.00.
Tax Free Savings Account is a bank account that allows your money to grow tax free, and it is capped at 5k. No penalties for withdrawals.
If you bought a new home as of January 27 2009 you get a 5k credit.
For any computer hardware and software between Jan 27 2009 to Feb 2011 you can claim 100% against your business.
If you are filing a few years at once call the tax office for the last information they have on record for you.
You can call that same number for RSP or other questions.
Art Donation: Art donation tax credit. According to Rev Canada you would need to report the donation as a sale. It is not a one to one write off. It is as if you sold the piece to the organisation, they gave you the money and you then donated back to them. It would be less than a third of the value.
Can deduct private health plan.
Business parking costs are not a percentage.
Nicola has a version of a chart of tax info and deduction. Email artax@rogers.com if you wish to have Nicola do your taxes and she will email this form to you.
http://www.taxes.ca/info/info-cra.php
http://www.taxtips.ca/glossary.htm
-
Russell Brohier - Posts: 20
- Joined: Mon Sep 21, 2009 7:59 pm
2 posts • Page 1 of 1