Many intelligent musicians and artists realize that they are running businesses, but there is often a slight discrepancy between how that is defined and how best to present the business to the government for tax purposes. You have probably heard the terms “sole Proprietor” and “Partnership” and “Corporation, but which one you are or should be, can get a little dicey.
I’ll keep this post short as I have found some great resources that sum up these business types better than I could do. This article on How To Start Your Business found on the Small Business BC website, takes you through the steps of determining which business model is right for you, registering your name or trademark, getting a business license and even considering paying into EI so as to be able to receive benefits down the road for maternity, paternity and illnesses. You should also check out this great podcast from the Canadian Independant Recording Artists Association (CIRAA): Accounting (Running Time – 21:03). You have to setup a free account to access the CIRAA podcasts, but it’s totally worth your while. This podcast talks a bit about how best to make the decision to incorporate your business and recommends that you meet with an accountant for a consultation prior to making the move.
If you are a serious musician and consider yourself more than a hobbyist, your music needs to be setup like a business. This could save you thousands of tax dollars down the road. Stay tuned for my next post on tax tips for musicians
Thanks for reading!