Yes I know that figures and money matters are boring for us artists but when you're a working artist you need to look at keeping accurate records and making sure you are taking care of your tax obligations. Here are some of my tips and advice for organising your records. Please keep in mind that you need to consult a professional for more detailed information. I personally use an accountant for my books at the end of each financial year because as an artist Im not really into bookwork, its boring and I simply don’t get it when it comes to such matters! Besides why do something that a professional in that field can do for me much better!
Create a Cash book
When doing your taxes (or in case of an audit) the most useful documentation you can have as a working artist, besides receipts, is to keep a cash book. You can use a notebook, a computer spreadsheet, or a column book for this purpose. Each time you travel anywhere or purchase anything that is tax deductible, make a notation in your cash book and keep the receipt. For and art or art business related purchases, write down:
For tax-deductible trips, write down:
For business-related meetings, write down:
For charitable donations, write down:
Organize your receipts
to manage your receipts, mark the same information as above directly on your receipts and keep the tax-deductible receipts organised in categorised folders or envelopes. Or if it’s easier a nail spike works well for some people and you simply take the receipts off at the end of each month and put in an envelope marked with the month and year, this works well for keeping them all together; I give those along with my cash book to my accountant at the end of each financial year. It keeps it tidy and organised and your accountant will save time which also saves you money!
Don’t forget that you need to keep your previous business records for the past seven years for tax purposes so store them somewhere safe.
All of this information is intended for general information only. You should speak to your accountant or get professional advice related to your specific situation, including any legal advice that may apply if unsure. For more information on filing your taxes, you can contact IRD http://www.ird.govt.nz/
Posted: Wednesday 13 January 2010