Tax Tips: Advice for Artists

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:

• The date
• The amount
• What you purchased
• The purpose of the purchase (how it relates to your business of doing art)
• Where you purchased it

For tax-deductible trips, write down:

• The date
• How many miles you travelled, car hire and any bus or taxi trips, and the cost of that plus any parking expenses you may have incurred.
• Where you travelled from and to.
• The purpose of the trip i.e. to meet with a gallery owner, organise an exhibition, travel from your first job to your second job etc.
• Keep any business cards or proof that you did these things as well.

For business-related meetings, write down:

• The date
• Who you met with
• The business purpose of the meeting
• Where you met
• Costs associated with the meeting like coffee at a café or parking costs etc.

For charitable donations, write down:

• The date
• The amount
• Who/what the donation was for

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/