This document provides tax tips for creatives. It recommends setting aside 15-20% or even 25% of gross income for taxes. It is best to put tax money somewhere difficult to access, like a separate savings account. The document also discusses registering for the Harmonized Sales Tax (HST), including when registration is required at $30,000 in annual income. It notes the differences between the quick method and long method for calculating HST amounts. Filing deadlines and penalties for late filing or payment are outlined. Record keeping requirements of 7 years are mentioned along with tips for expense documentation. Options for employment insurance for freelancers are briefly covered.

1. Tax Tips for Creatives

2. Setting money aside for tax
 An estimate is the best we can do: usually 15-20% of
gross
 Writers tend towards the high end because their
expenses are low
 Start with 20% or even 25% to be absolutely sure
 After you have a few years’ track record, you can refine
your estimate

3. Where to set it aside
 Psychologically, it’s easier to save what we don’t see
 Put it somewhere you can’t easily get at it, e.g. an ING
account
 Alternatively, put your income into a holding account
and pay yourself a salary

4. Registering for the HST
 Charge it on top of your income
 Remit what you collect, but get back what you spend
 Financially, registering is always to your advantage
 Hides your income level from potential clients
 We can email you an 8-page primer on HST

5. HST: when and how
 Must register once you earn $30,000 gross in any 12-
month period
 You’re responsible for knowing that the time has come
 Getting caught years later is common

6. Quick method vs long method
 Long method is the default: paying the difference
 Quick method by request only
 Takes a set percentage of gross income

7. Filing on time
 Self-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

8. Keeping records
 Seven years from later of filing date or year to which
they pertain
 Consider making copies of thermal receipts
 Receipts must include address and date to be valid
 Credit card receipts aren’t considered valid receipts
 No receipts? A reasonable estimate sometimes works
 Car logs for use over 25% (try an app)
 Better an imperfect system that you’ll actually use

9. EI for freelancers
 No EI in the traditional sense
 Four other forms: Maternity, parental, sickness,
compassionate care
 Direct deal with Service Canada
 Can opt out until first claim
 Alternative: for-profit disability insurance
 Generally premiums can’t be deducted, BUT
 Payouts aren’t taxable either

10. (tax-related, that is)