Does the mere thought of filing your annual tax return send you into a tizzy? You’re likely not alone. And if you’re a self-employed artist, you may have even more questions, like if you can claim your car or guitar, how a home office factors into the equation, and on it goes.
Thankfully, there are people who can help you navigate the sometimes murky waters of tax time and help you get the biggest bang for your buck. Jennifer Gorman is the Social Experience Manager for TurboTax Canada and for over three decades, has helped hundreds of self-employed Canadians file their tax returns with ease. On January 23, she will lend her expertise during a tax workshop at the Emera Innovation Exchange at MUN Signal Hill Campus. We recently caught up with Jennifer to talk tax in advance of her seminar.
Business & Arts NL: As it states in your workshop title: “Filing your tax return as a sole proprietor is easier than you think.” In your experience, what are some of the common misconceptions that sole proprietors have with regards to filing taxes?
Jennifer Gorman: I’d have to say the fact that your business income, no matter how big or small, must be included on your tax return. A common myth is: “I only made $5,000 last year from my little business so I don’t have to report that.” That’s just not the case. Including your business income on your tax return is a must.
Your tax return is one of the best ways to see if your business is actually making money. It might be the only time all year that you have all of the expenses and income figures in front of you. Use that information to make decisions going forward. Did you spend much more than you thought on supplies last year? Maybe it’s time to find a new supplier or push for a discount.
Business & Arts NL: Filing your tax return can cause a few headaches if you’re not prepared. What are some things that sole proprietors can do throughout the year to make tax time go more smoothly?
JG: Having a good filing system makes tax time a breeze. Whether you use an app like QuickBooks Self-Employed or go old school with some shoeboxes for receipts, try to keep your paper organized as best you can. Tip: Be sure to write a quick note on the back of business-related receipts. Trying to remember what business-related item you bought at Pipers last year isn’t easy!
Business & Arts NL: For those artists who work out of a home office, what are some things they should keep in mind with regards to what they can/cannot claim, etc?
JG: The word to remember is reasonable. The calculation of the expenses is based on the size of your home office versus the size of the rest of your home. If you claim 800 sq feet of space in your 1,000 sq foot home as office space, that’s not going to fly with CRA.
Another tip for home office expenses is to sign up for online billing as much as possible for utilities. That way all of your bills are easily accessible at tax time.
Workshop: Tax Tips for Artists
Date/Time: Wednesday, January 23 from 1-3pm
Location: Emera Innovation Exchange, MUN Signal Hill Campus
Price: Free for Business & Arts NL members, or $10 for non-members (includes a free 1-year Business & Arts NL membership)
Registration: Click here
