**Disclaimer: This post is intended to inform you in general terms. As tax law changes from time to time, and I am not a CPA, accountant, or tax preparation professional, please take the time to do your own research and verify any of the information below to see if it’s applicable and deemed appropriate for you and seek professional advice on how to best legitimize and optimize write-offs to maximize your savings.**
With tax season upon us (sigh), you’re probably wondering what are some tax expenses you can write off.
Below you’ll find a high-level list. However, please note this is from a Canadian tax perspective for someone who is just starting out as a freelancer. For those in the US there may be overlapping similarities but please check with your local tax professional.
To keep things simple, let’s assume you’ve not made more than $30K a year yet because, Hey! you’re just starting out, and you are self-employed. This means you’re conducting your business as a sole proprietorship and not registered under LLC or Corporation.
Also, once you are going to be making more than $30K per year, you’ll have to consider registering for GST/HST in Canada, as you’ll have to charge that on top of your service cost. However, this is another article for another time. For the time being, just keep this information in the back of your mind.
OK fine (you’re thinking). But you talked about LLC or Corporation? Should I consider doing this and registering my business as a LLC or Corporation?
Typically, most people start to consider setting up their business as such when their career gains momentum and starts flourishing and is booking on a regular basis. However, it can also depend on other factors and your current financial circumstance. Thus, your best bet is to seek advice from a professional.
For our purposes today, we are just looking at reporting your self-employment income as a voice talent. How do I determine if I’m self-employed? You’re self-employed if you have all the freedom to control and accomplish the desired result to get a job done for a contract.
What are typical expenses you can write off:
- Insurance premiums on home studio equipment;
- The cost of repairs to home studio equipment;
- Capital cost allowance on voiceover and other equipment, i.e. laptop;
- Legal and accounting fees;
- Union dues and professional membership dues, industry related subscriptions, online P2P member fees;
- Agent’s commission;
- Marketing Expenses such as the production of your demo cost, the cost to create and maintain your website, and developing social media presence.
- Transportation expenses related to a business engagement (including an audition)
- The cost of setting up your home studio;
- Internet/ Telephone expenses, including an applicable portion of the cost of a telephone in a residence where the number is listed as a business phone;
- Costs to maintain the part of your residence used for professional purposes (i.e. utility), and
- Training Costs, ie. acting, voiceover, singing, lessons incurred for the general self-improvement in voiceover and growing your business;
This is a list of things that you can generally deduct within reason related to your voiceover business. Depending on where you are in your career, or if you have an expense that’s not on the list, check with your local tax professional to see if it may be deductible.
The key is being able to justify and substantiate the deduction.
With that said, help yourself and your accountant and keep detailed records of all your voiceover-related income and expenses (including receipts). If you travel and use your car to get you from one place to another, keep tabs of the date, engagement reason, and total mileage for the trip.