accounting

Getting Paid

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If you don’t print your own money then you have to make money the old fashion way by having a job. But a job works only if you get paid. (National Film Board of Canada / Library and Archives Canada circa 1955-1956.)

There have been only three times when I had difficulty getting paid. All were in the mid-1980s when I was just starting out:

1)   My first corporate customer was a very small pharmaceutical company. The company wanted the photos shot on transparency film because the images were for a slide presentation. I asked if they also wanted prints. No, they did not want prints, only slides. The job was done and the slides were delivered. The customer refused to pay because I did not deliver prints.
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Immediate Expensing and Income Tax

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A Toronto police detective examines fingerprints using laser light. The photo was taken on opening day of the new Forensic Identification Services crime lab in Toronto, 25 October 1999.

This is another view-from-my-office photo.

Right now, most Canadian photographers will be doing their annual income tax. Some business expenses are not deducted in full but instead they are depreciated over time. Capital Cost Allowance (CCA) is used to depreciate the value of photo equipment, computers, and other business purchases that have continuing value.
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Accelerated Investment Incentive and Photographers

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A picture of US actor Willem Dafoe during an interview in which he’s definitely not thinking about Canadian income tax.

Canadian professional photographers, like many other business owners, may be thinking about income tax this time of year. They may even be thinking:

. . . prior to the introduction of the Accelerated Investment Incentive, a property in Class 8, which has a prescribed rate of 20 per cent, would be eligible for CCA of 10 per cent of the cost of the property in the year it becomes available for use, due to the half-year rule. Under the Accelerated Investment Incentive, the taxpayer will be eligible for CCA of 30 per cent of the cost of the property—that is one-and-a-half times the CCA calculated using the prescribed rate of 20 per cent or three times the 10-per-cent CCA that could otherwise be claimed in the first year.

– Federal budget 2018

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Purchasing Photo Gear in December

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I rarely photograph US college sports but this is a men’s basketball game between Harvard University and the University of Buffalo. It was shot for, you guessed it, the Basketball Hall of Fame.

This picture has nothing to do with this post. It’s just another view-from-my-office photo.

Are you thinking of buying new photo gear or other expensive business items? If so, December offers a couple of tax benefits.

Many businesses, especially sole proprietorships, have their fiscal year match the calendar year because it makes doing your income tax easier. If this describes you then December purchases might be beneficial.
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Kilometric Rates For 2019

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Just wanted to point out that the Canadian government has posted its 2019 kilometric rates for car travel by government employees.

These rates are the bare minimum of what photographers should be charging for use of their vehicle.

Your situation may require you to charge more. For example, it costs me about 85¢/km to drive my car. This is much higher than the government’s 57¢/km (including tax) for Ontario.

 

Please check the date of this article because it contains information that may become out of date. Tax regulations, sales tax rules, copyright laws and privacy laws can change from time to time. Always check with proper government sources for up-to-date information.

 

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.

 

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