Rolling up with the receipts
If you’re an artist, you might be surprised at what you can claim on your taxes—including literally the clothes off your back.
No one starts a band so they can do paperwork, but if you make money as an artist, that shiver that just went through you is brought to you by the cold wind of tax season.
“We do tax seminars around this time every year, one for musicians and one for actors,” says Donna Branston, a partner at DMCL Chartered Professional Accountants in Vancouver. “This is the main thing I always tell them: They think if they’re not making money, they don’t need to include anything in their taxes. But when you’re losing money you should still be including that, because those losses offset income tax—from, for example, your day job—or it carries forward to future years. It’ll reduce [the amount owing].”
Branston specializes in musicians and her clients include Bryan Adams, Tegan and Sara, and Side Door’s co-founder Dan Mangan. “If you think about Dan as having a business—he’s a business, so we are his financial arm,” she says of DMCL. “We are his CFO. We take care of all of his finances. We make sure he’s getting paid, that he’s paying all his people, paying taxes in Canada and internationally.”
If you’re a new artist starting out, you don’t necessarily need to hire an accountant. But “if you’re earning more income than you need for your personal expenses, that’s definitely time,” says Branston. “If you have international income, you probably need somebody to report it properly.”
The old shoebox of receipts joke is rooted in truth—“once in awhile someone will bring us some kind of bag”—but Branston advises adding that box up yourself and put it in a spreadsheet if someone like her is your final stop. “If you’ve got a box of receipts, you are paying somebody to add those receipts up,” she says, “and that is a big waste of your money.” There are also apps like Receipt Bank and MrReceipt that allow you to keep digital records and do away with haphazard record-keeping altogether.
There are a number of things artists can claim as expenses, including gear maintenance, strings and sticks, and music subscriptions like Spotify and Apple Music. A home office—“definitely claim some percentage of your rent or mortgage interest.” Branston identifies an oft-overlooked area as “things to do with their image: Stage clothing, gym clothing, tattoos, piercings.”
But don’t book that tattoo appointment just yet. “Be reasonable—if you’re an artist and you’re just starting out and you’ve made five grand and you’ve spent $2,500 on a full sleeve, don’t say that,” she says. “But people tend to self-audit, ‘Oh, I lost that receipt so I won’t include it.’ Why are you doing that to yourself? The only thing that’s gonna happen is they’re gonna say no. You’re not going to jail.”
Written by Tara Thorne
Tara Thorne is a writer, editor, and pop culture critic in Halifax