I Do Declare

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This shouldn’t come as a surprise but when you do your annual income tax, you have to declare all your business income. Whether customers pay you by cash, cheque or credit card, it doesn’t matter. You have to report it all.

Business income from customers in other countries must also be declared on your Canadian income tax.

A few months ago, Canada Revenue Agency (CRA) sent a federal court order to payment processor Square Canada to turn over information on all its Canadian sellers who annually processed $20,000 or more anytime in the past five years.

According to The Globe and Mail, this is “part of an ongoing effort by the CRA to crack down on tax avoiders.”

In the USA, this has been happening for many years with Square, PayPal and all other third-party electronic payment processors. Every electronic payment processor in the US has to report to the Internal Revenue Service anyone whose payment volume annually exceeds $20,000 and 200 transactions.

The CRA is very concerned about self-employed people and those who get paid in cash. Always keep proper invoices, receipts and bank statements that can prove your income and expenses.

 

A Taxing Situation

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Now that it’s tax time and many folks are doing, or at least thinking about doing, their income tax, professional photographers might want to refresh their knowledge of allowable business expenses.

This list of business expenses and their brief explanations provide the starting point for completing tax form T2125.

This is only a starting point because “you can deduct any reasonable current expense you paid or will have to pay to earn business income.” The key word is “reasonable”.

The word “reasonable” is not defined in (tax) law but it has been shaped through Canada Revenue Agency rulings and technical interpretations. If your tax situation is even slightly complex, a good accountant can come in handy.

 

Life in the Slow Lane

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Most photographers go through a slow period, or two, during the year. Perhaps it’s the time from Christmas to the end of January or maybe it’s during a summer month. It depends on what type of photography you do. So what should a photographer do during a slow period?

What not to do

• Don’t panic (too much).

• Don’t use a slow period to catch up on your TV viewing.

• Don’t buy new gear. Don’t fool yourself into thinking that if you buy a new camera or lens, you’ll get more business. New gear won’t help.

• Don’t have a fire sale. Unlike a retail store, photographers don’t have marked-up merchandise on their store shelves that can be discounted. You have only time on your “store shelf” and, unlike a tangible product, time can’t be restocked.

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Avoid fake news about your company

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Thanks to recent events in the USA, the phrase “fake news” has become popular. Fake news, the intentional publication of hoaxes and disinformation, has existed for many decades. For example: while standing in a supermarket checkout lane, you’ve probably noticed all those crazy headlines on tabloid magazine covers: cures for cancer, alien invasions, Bigfoot sightings, the end of the world, and so on.

Sometimes fake news is used to sway opinion but mostly it’s used to make money.

Fake news isn’t used just to influence elections. It’s routinely used online to garner web clicks which in turn helps generate money through advertising. Sometimes this is outright fake news and other times it’s clickbait headlines to trick readers. Unfortunately many legitimate news outlets shoot themselves in the foot when they do the same thing:
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Violins and marketing photography

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When you play a violin piece, you are a storyteller, and you’re telling a story.

– Joshua Bell

You can replace the violin in that statement with a camera and it would still hold true.

A decade ago, The Washington Post did an unscientific social experiment where Joshua Bell, a well-known classical violinist, dressed in jeans, t-shirt and ball cap, performed incognito in a subway station. The newspaper wanted to see how many morning rush-hour commuters would stop to hear classical music being perfectly played.

On the morning of Friday January 12, 2007, Bell set up inside a Washington DC subway station and placed an open violin case on the ground for donations. The unannounced event was recorded by a hidden camera.

The Post was worried about huge mobs gathering and the possibility of needing police for crowd control. You can probably guess what happened.
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Point me in the wrong direction

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Thinking of starting a photography business?

Your first photography web site and your first business plan will fail. Guaranteed. You will have to make changes and try again. Then more failure and more changes, and more failure and more changes.

If you’re not prepared to be wrong, you won’t get anywhere important. And you won’t know if you’ve arrived anywhere important until you know where’s not important.

You must have a good answer to each of these questions or else you’re in the wrong place:

1) What problem will your business solve?

If your answer is that people want photography then you’re wrong.

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Worth Every Cent

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When someone asks you to work for free, they want photography that’s good enough, pictures that are better than nothing, photos that are worth what they’re paying.

When someone hires you to work for pay, they want photography that’s good, pictures that are better than anything, photos that are worth what they’re paying.

 

 

 

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