Art Articles & Reviews

Let the Canada Revenue Agency help you master the art of filing taxes

Although not everyone was a promising Picasso or a budding Beethoven growing up, most would agree that any artistic endeavour is a reward in itself. Painter, sculptor, author, poet—your creativity and passion contribute to a booming cultural scene and an abundance of extraordinary art to inspire Canadians. But no matter what your medium, taking advantage of deductions and credits available to you means more money in your pocket to pursue your artistic endeavours!

Most artists are considered self-employed and the income you receive as an artist can include artists’ fees, commissions, prizes, awards, fellowships, and endowments. If you received an artists' project grant, you may be entitled to an exemption to reduce your taxable income. For more information, go to www.cra.gc.ca and search artists' project grants.

Expenses can be an important factor in determining an artist’s tax obligations. You may be able deduct the costs of creating a work of art in the year the costs are incurred, rather than in a later year when the art is sold. Doing so may allow for an immediate benefit on your current tax year by reducing income tax. For more information, go to www.cra.gc.ca/forms and search Interpretation Bulletin IT-504R2, Visual Artists and Writers.

You look for opportunities to market your work and promote yourself. Did you know that any reasonable expenses you incurred to earn income may be deductible? These costs may include home-studio expenses, meals and entertainment, motor-vehicle expenses, out-of-town travel expenses, art supplies, and even legal and professional fees! Remember to keep your records and supporting documents for six years after you file your income tax and benefit return in case we ask to see them later. For more information, go to www.cra.gc.ca/selfemployed and select “Business expenses.”

As an employed artist, such as a salaried musician in an orchestra or an art teacher, you may be able to deduct expenses paid to earn artistic income. You may also choose to deduct some of these expenses separately as artists' employment expenses to allow for a greater deduction. If you have to provide your own musical instrument, you can claim the instrument’s maintenance costs, rental fees, insurance, and capital cost allowance. To find out more about deducting employment expenses, go to www.cra.gc.ca/employmentexpenses and select “Employed artists.”

If you donate a work of art that you created, you may be able to claim a non-refundable tax credit based on the eligible amount of your donation, as long as your donation falls under the definition of gifts of certified cultural property and is given to a designated Canadian institution or public authority. For up to five years, you can carry forward the amount of this non-refundable tax credit to use on a future return. For more information about gifts and donations, see Pamphlet P113, Gifts and Income Tax, available on the CRA website.

Don’t forget that the deadline to file your income tax and benefit return is generally April 30. However, if you or your spouse or common-law partner is self-employed, the deadline is June 15. Remember, in both instances, if you have a balance owing for 2014, you have to pay it on or before April 30, 2015. 

Filing electronically with NETFILE is easy, secure, and lets the CRA process your return much faster. If you’re entitled to a refund, you can enjoy your money in as little as eight business days when you combine online filing with direct deposit—music to your ears! For a list of software and web service choices, including some that are free for everyone, go to www.netfile.gc.ca/software.

Take advantage of the CRA's e-services and complete your tax-related business when it’s convenient for you. For more information, go to www.cra.gc.ca/electronicservices.

Don’t miss the latest CRA news or tax tips on Twitter: @CanRevAgency

On behalf of artists in Canada, I would like to thank the Canada Revenue Agency for sending this helpful information for artists.

Paul Constable, Director