Tax Preparation for Self-Employed Artists: Q&A with James Lanning and Jennifer Collins of Keen

As a self-employed artist, you likely have some questions related to filing your taxes that are unique to your situation, e.g., What tax deadlines apply to you? Can your phone be claimed as a business expense? What about professional development opportunities?

If you find yourself with similar questions come tax filing season, you won't want to miss our free, online workshop on September 25 with James Lanning and Jennifer Collins of Keen (a local financial services company that helps entrepreneurs and organizations manage and grow their business).

Hot on the heels of their popular session on financial planning and bookkeeping for arts-based businesses, we're pleased to have James and Jennifer return for "Tax Preparation for Self-Employed Artists" to answer all your burning tax-related questions. (This session is part of our Financial Literacy workshop series, supported by TD Bank Group through the TD Ready Commitment.)

We tossed a few questions their way in advance of their session. 

James Lanning and Jennifer Collins of Keen Financial.

Business & Arts NL: What are a few simple things that self-employed artists can start doing now to make it easier for them come tax time, or to help simplify their tax filing experience?

James & Jennifer:

1. Separate your personal and business finances, if you haven't already - we suggest opening a separate bank account and use it exclusively for your art-related income and expenses. This separation simplifies record-keeping and ensures you are not mixing personal expenses with business ones. This will save you and/or the person you are hiring to file your taxes a ton of time come tax time.

2. Save receipts and other supporting documents. Keep digital or physical copies of all receipts related to your business and maintain an organized filing system.

3. Set aside money for taxes. This is crucial as we've seen many self-employed individuals find themselves with large amounts owing to the CRA without the funds to pay it. Any income you earn for your products or services is subject to tax. So putting away a percentage of income each month into a savings account, or making quarterly tax instalment payments to the CRA, can help you avoid this situation.

Business & Arts NL: A couple of topics you'll be covering during your workshop include recording business income and allowable deductions. Are there any special considerations self-employed artists need to take into account when it comes to the former (e.g. grants) and the latter (e.g. home office expenses/rent)?

J&J:

Grant revenue

When receiving grants, it is important for artists to understand the nature and purpose of the grant in order to determine taxability. In most cases, grants are taxable income and artists will be able to deduct the eligible expenses they incurred to fulfill the grant in order to reduce the amount of income to report. However, these expenses cannot exceed the total amount of the grant, and cannot include:

• Personal living expenses while at your usual place of residence

• Expenses for which you can be reimbursed

• Expenses that are otherwise deductible when you calculate your income for the year (other business expenses not related to the grant)

Home office expenses

Self-employed artists can claim home office expenses if they use part of their home exclusively for their art business, such as creating artwork, managing their business, or meeting clients. Artists can deduct a portion of their home expenses, including rent or mortgage interest, utilities, insurance, and maintenance, based on the percentage of the home used for business.

Business & Arts NL: Are there any other specific things that artists who are self-employed need to be mindful of when preparing their taxes that may not apply to those in other professions (e.g., deadlines, things that may qualify as a business expense, etc.)?

J&J: While the personal income tax filing deadline in Canada is April 30th, self-employed individuals, including artists, have until June 15 to file their taxes. However, any taxes owed must still be paid by April 30th to avoid interest charges.

Artists can claim specific business expenses that may not be as common in other professions, including:

• Art supplies (e.g., paint, canvases, clay)

• Gallery fees or exhibition costs

• Professional development (e.g., workshops, art residencies)

• Commissions paid to galleries or agents

• Costs related to promoting and marketing their work, like website maintenance or social media ads

• Studio rent, whether in-home or external space

Workshop: Tax Preparation for Self-Employed Artists
Date/Time: Wednesday, September 25 from 12:30 – 2:30 pm NST
Location: Online via Zoom
Price: Free
Registration: Click here to register for the workshop "Tax Preparation for Self-Employed Artists"