Keeping CRA Happy While You Do You

Tax Tips for Creatives

Setting money aside for taxAn estimate is the best we can do: usually 15-

20% of grossWriters tend towards the high end because

their expenses are lowStart with 20% or even 25% to be absolutely

sureAfter you have a few years’ track record, you

can refine your estimate

Where to set it asidePsychologically, it’s easier to save what we

don’t seePut it somewhere you can’t easily get at it,

e.g. an ING accountAlternatively, put your income into a holding

account and pay yourself a salary

Registering for the HSTCharge it on top of your incomeRemit what you collect, but get back what

you spendFinancially, registering is always to your

advantageHides your income level from potential

clientsWe can email you an 8-page primer on HST

HST: when and howMust register once you earn $30,000 gross in

any 12-month periodYou’re responsible for knowing that the time

has comeGetting caught years later is common

Quick method vs long method

Long method is the default: paying the difference

Quick method by request onlyTakes a set percentage of gross income

Filing on timeSelf-employed people and their

partners/spouses have an extra six weeks: June 15 filing deadline

File on time (send in your return) even if you can’t pay on time

Late filing penalties for filing late, separate from interest charged for paying late

Late filing penalties are higher (5-17% or even double that) while interest is about 0.5% per month

Keeping recordsSeven years from later of filing date or year

to which they pertainConsider making copies of thermal receiptsReceipts must include address and date to be

validCredit card receipts aren’t considered valid

receiptsNo receipts? A reasonable estimate

sometimes worksCar logs for use over 25% (try an app)Better an imperfect system that you’ll

actually use

EI for freelancersNo EI in the traditional senseFour other forms: Maternity, parental,

sickness, compassionate careDirect deal with Service CanadaCan opt out until first claimAlternative: for-profit disability insurance

Generally premiums can’t be deducted, BUTPayouts aren’t taxable either

Ask me anything!(tax-related, that is)