Taxes & Money for Canadian Photographers and Creatives: What You Need to Know

As a Canadian photographer, freelancer, or creative, dealing with taxes and money might feel daunting, but it doesn’t have to be! When you understand the basics, taxes can actually become a tool for business growth instead of a source of stress. Trust me, as someone who’s been in your shoes, I’ve seen the power that comes from understanding my numbers and taking control of my finances.

The advice here on money and taxes for Canadian small business owners and freelancers is a condensed transcript of a conversation I originally had on an Instagram live in February 2021 with CPA Anisia Hurst. This was updated with Anisia again in March of 2024.

Anisia and I dove into the nitty-gritty of tax season, addressing some common questions from photographers and creatives, while offering practical, easy-to-understand advice that makes taxes a little less scary and a lot more empowering.

Anisia Hurst is a Chartered Professional Accountant with over 15 years of experience. She specializes in personal and corporate tax, estate planning, and tax compliance, and co-owns a creative business with her sister, Brianne Gabrielle Cakes.

Buckle up! While this guide is approachable, it’s filled with a lot of information!

---

Table of Contents

1. How much do I earn before I am a freelancer?
2. When do I start charging tax?
3. How much money should I put away per job?
4. How do I know how much to remit for taxes?
5. How much money should I set aside for myself after taxes (first year of business)?
6. Do I need multiple bank accounts?
7. What do I do as a sole proprietor?
8. How do I stay organized?
9. What can I write off for my business?
10. Where do I start to file my taxes?
11. Is there tax liability as a sole proprietor
12. Can I claim clothing as an expense?
13. What are common expenses that get thrown out?
14. How do I handle bad debts from clients not paying?
15. Should I apply for grants through my business or set up a nonprofit?
16. How do I position myself to reach my financial goals?
17. How much money should I keep in my business checking account?
18. Key Takeaways

---

How much do I have to earn before I can call myself a freelancer?

Short answer: If you’re earning any income from your work, no matter how small, congrats—you’re officially a freelancer.

Anisia Hurst: In Canada, there’s no magic threshold you need to hit to call yourself a freelancer. Whether you call yourself a small business owner, a side hustler, or a freelancer, if you’re earning income on your own, you’re considered self-employed. There’s no minimum amount of income you need to reach before the CRA (Canada Revenue Agency) sees you as a freelancer. So, if you’ve earned $50 or $50,000, you’re in business.

That said, many freelancers hesitate to take ownership of their business because they feel their income is too small. But recognizing that you’re running a business, no matter how small, is the first step to making smart financial decisions. Plus, even small amounts of income need to be reported when filing your taxes.

However, there is one number you should keep an eye on: $30,000. Once your revenue hits $30,000, you’ll need to register for GST and start charging taxes. Until then, it’s optional—but trust me, having a plan for when you hit that number is super empowering.

What is the threshold where small businesses have to start charging taxes?

Short answer: Once you make $30,000 in revenue, it’s time to register and start charging GST.

AH: Here’s the thing, the CRA isn’t going to send you a party invite when you hit that $30,000 threshold. You’ve got to track your income, and when you cross that line, you have to register for GST/HST and start charging it to your clients. Even if you’re feeling like “Oh no, now my prices will seem higher,” know that your clients will understand—it’s part of being a legit business. For freelancers and creatives, this can feel like a big milestone, and it’s a sign that your business is growing.

Also, if you’re close to that $30,000 mark within a 12 month period, start thinking about it early. There’s nothing worse than scrambling to figure out GST registration when you’re already swamped with client work.

How much money should I put away per job?

Short answer: Put away 20-30% of your income for taxes and keep it in a separate account you can’t touch.

AH: A good rule of thumb is to set aside 20-30% of every payment you receive for taxes. This might seem like a lot, but it ensures you won’t be caught off guard when tax season comes around. Freelancers and creatives don’t have taxes deducted from their income the way salaried employees do, so it’s your responsibility to save for taxes throughout the year.

You definitely want to be putting that into a separate bank account for the purpose of tax instalments, because I find that if you have it separate from your everyday money, it’s a little bit easier to keep that [account] designated for that purpose. If you see it every day, it’s in your everyday account, you think it’s money that’s available to you to spend and come tax time in April, you don’t have the funds to pay your tax bill. So I always recommend twenty five to thirty percent, unless of course you’re in a much higher tax bracket and always put it into a separate account.

It’s a little bit different when you’re self-employed versus when you’re working through a corporation or like an incorporated entity. Essentially, once you pay your tax on a self-employed income, that money is yours to do as you please. So you can allocate that money to savings, to paying bills, whatever you want it to be. It really depends in terms of what you’re looking for, what your goals are, that sort of thing. But my first thing is always make sure that you set aside money for taxes because, you know, the taxman is always going to come knocking.

How do I know how much to remit for taxes?

Short answer: Quarterly tax instalments if you paid more than $3,000 last year in taxes, if not, annually. Look at your previous year for the financial outlook of the next year to start calculating what you may owe in taxes.

AH: If you owed more than $3,000 in taxes last year, the CRA will require you to make quarterly tax instalments in the current year. Essentially, they want you to prepay your taxes in four chunks to avoid owing a big amount all at once at the end of the year. If you owed less than $3,000 last year, you can pay taxes annually, but it’s still a good idea to set money aside regularly so you’re not scrambling to come up with it at the last minute.

Start by looking at last year’s income and tax liability. If things are looking similar this year, divide what you owed into four quarterly instalments. If you didn’t owe more than $3,000, you’re off the hook for instalments and can stick to the annual system. But either way, it’s a good idea to plan ahead!

For example: based off of last year, I paid $10,000 in taxes — I’m probably going to owe pretty much something similar to that this year.

That being said, knowing that last year I paid $10,000 in taxes — which is above the $3,000 threshold, I would break that up into quarterly instalments. I now know that I’m going to have to pay $2,500 dollars in quarterly instalments every quarter going forwards.

How much should I be setting aside for myself after putting money away for my taxes (in the first year of business)?

Short answer: After taxes, the rest is yours.

AH: Okay, so let’s say you’ve set aside your 20-30% for taxes—what happens to the rest? First of all, it’s yours to do what you want with, but this is where your goals come into play. Are you paying off debt? Saving for retirement? Or reinvesting in your business? The trick is to use what’s left with intention.

In your first year, you won’t know exactly how much you’ll owe in taxes, so err on the side of caution. Once you’ve got a year of business under your belt, you can fine-tune how much to set aside based on your actual tax liability.

Do I need multiple business accounts?

Short answer: Yes, multiple accounts are a game-changer for staying organized and sane.

AH: I can’t stress this enough—having separate accounts for your business is one of the easiest ways to stay organized and avoid headaches down the road. At the very least, you need a business checking account, a tax savings account, and a business credit card.

I’ve seen clients try to run everything through one account, and it gets messy fast. You don’t want to be sorting through your bank statements trying to remember if that lunch was business or personal. With multiple accounts, everything is clear, clean, and ready for tax time.

What should I do in my first year of business if I’m a sole proprietor?

Short answer: Keep all business income separate and document everything. Even a separate account in your personal name will work better than nothing, though it is strongly recommended to open a business banking account to keep your finances separate.

AH: If you’re trying to slash everything through just one personal chequing account [it can get messy quick]. Let’s say it’s your first year, you don’t really know if this is going to become a thing: I think your accounting records have to be meticulous and nine times out of ten, they’re not from what I’ve seen with clients, from what I’ve seen in my own personal experience since your records, your personal tax records and your financial records are not going to be meticulous in that first year, I guarantee that.

I just always recommend to set up a separate account. Even if you don’t necessarily have a business account, you can still go to the bank and be like, I want to open up a new account still under my personal name, but then all of my business money flows through that account instead of my checking account.

What is the best way to stay organized?

Short answer:

1. Keep business and personal finances separate
2. Have an excel spreadsheet or book keeping/accounting software like quickbooks online to keep track of your income and expenses
3. Have a date with your money every week or month to look through your finances, statements, and records to get comfortable with looking at your money

AH: Keep your business finances separate from your personal finances where wherever possible. That’s the first thing that’s going to help you stay organized, because during personal tax time, when it’s time to separate those expenses and income, it’s probably easy to pick out the income because it’s easily identifiable. But when it comes to the expenses, it’s going to be a little bit trickier as to justifying, “was that a business expense?” “What about that one?”

So the first thing: to keep yourself organized, separate your bank accounts into business versus personal. OK, the second thing I would recommend is use some sort of software and it can be as basic as Excel and and keeping track of all your expenses in an excel log or something like that, or if you’re ready to upgrade, maybe even quickbooks or something like that, some sort of accounting software. And you can use that to track your income and your expenses. You want to keep track of the date, you want to keep a description of the item and obviously how much it cost, or how much you earned. So I think both things are super important.

The other thing that I would probably say that is really important to keeping you organized and even building your confidence is just scheduling a money date with your finances.

It could be something that you’re doing every Friday or every Saturday or whatever day you pick a day every week, and you basically make that your money date, where you spend an hour looking at your finances, you go through your bank statements, you go through your credit card statements, and you basically go through all of your records and get yourself comfortable and start looking and tracking at the income and expenses.

I’m personally a huge fan of this: get accustomed to looking at your bank account daily. Every morning I wake up, I open my banking app and I look at my bank account and I do it for [all the accounts]. It makes you feel so much more comfortable knowing and seeing your numbers. Once you get comfortable with that, it makes your whole money date a little bit easier and more comfortable. And then you get into the whole idea of being a lot more comfortable and organized.

If you’re doing your bookkeeping, maybe not on a weekly basis, but maybe every few weeks or every month, depending on what works for you, you’re making a point in your scheduling that time to look at your money and do your bookkeeping so that when tax season rolls around, it’s not like a scramble. And it’s just like, oh, I just had like an hour or two to put some things together, boom. I send it off to my accountant and off we go.

What can I write off for my business?

Short answer: Look at the T2125 form from the CRA, it will give you the majority of answers to what expenses you can claim as a starting point. From there, your accountant can help you go through other any other deductibles.

AH: Look at the the statement of business activities, which is the form that you actually have to file as part of your personal tax return. When you report in self employment income, it’s called a T2125 . And essentially it lists out line by line all the different types of expenses that you can claim.

So I feel like that’s a really good place to start. Looking at the T2125, on the CRA website, take a look at it and go through line by line and get an idea. It’ll kind of give you a little bit of of knowledge and understanding in terms of what you can count right off what expenses are are taxable, what’s not deductible.

I tell clients to fill out the T2125 as best they can and they often do, but when in doubt, consult the T2125 form or ask your accountant for guidance.

Where do you begin when it comes to start filing my taxes?

Short answer:

1. Have your personal info ready and any updates that happened in your life (a marriage, children born, etcetera)
2. Have your last year’s notice of assessment – it will provide you with info on what deductions or credits you may be eligible for this year
3. Figure out all of your income sources for the year (T4, T5, or gov’t payments, investments)
4. Check the deadlines for filing
5. Look to your expenses and see what deductions are available
6. Ask your accountant for anything else they may need from you

AH: Start gathering the basics. Make sure that you’ve got your date of birth, social insurance number. If you’re filing with a partner or you have children or anything like that where you have children or got married during the year, those are the sorts of things that you want to be collecting at this point.

I would recommend that you start pulling your notice of assessment from last year. That’ll give you an idea in terms of what kind of deductions and credits that you claimed, because chances are you’re probably eligible for similar deductions and credits again this year. But just skimming through it, you might also see, oh, OK. Well, I had I had a child this year I’m entitled to child care deductions, you know, so it’ll it’ll start to ring a few bells in that regard though, I definitely recommend starting the information gathering stage. And then get your notice of assessment and start looking through that once you’ve got that, I think the next step is obviously to figure out your income sources.

Did you work for an employer that had just one T4, or did you work for an employer that had T4s? Were you self-employed? Like what we were just talking about? Start figuring out where your income is coming from.

Did you have government assistance?

[March is the time where you should start seeing your T4s, T5s, investment income slips start to come in]

Once you figure out what your income sources are, then you want to look at your expenses. Do I have any deductions available? Do I have any expenses that I can claim to offset my business income?

And I think those are the key areas that I would start, you know, that’s going to get you on the right track. At that point, once you have all of that information and you present it to your accountant, they’ll go through it and they’ll be like, oh, you missed this or you missed this or what about this?

What liabilities are there when I am a sole proprietor and haven’t separated my money into a business bank account?

Short answer: Not much liability from a tax perspective, but more of a liability from a legal perspective

AH: I think there’s not really much in terms of liability from a tax perspective, in the sense that, you know, you’re earning the income personally, you’re going to be taxed personally.

I think the liability comes in is from obviously a legal perspective and from that sort of perspective where, you know, you’re looking at insurance or you’re looking at, you know, can I be sued? Well, obviously, as a proprietor, without that corporate veil, you are your business. You’re one in the same. There’s basically no legal protection at all.

In terms of like being able to separate your bank account and and whether there’s any risk or liability there as a proprietor and whether you have it in a personal account versus a checking account for tax purposes, you’re considered one and the same.

Can I claim clothing like shoes or outfits for work use?

Short answer: Generally, no, unless it’s a uniform with your business logo or exclusively for work.

AH: In its simplest form is clothing, shoes, any sort of work outfits or anything like that that you’re purchasing for yourself are not deductible for tax purposes. You could maybe get some leeway with if it’s a uniform, for example, that it has printed on X Y Z logo, [you couldn’t wear the uniform anywhere else]. Let’s say you’re in Aritiza, for example, and you see cute dress and you want like a cardigan, and you purchased that for because obviously you need to look professional when you’re shooting a wedding and you purchase that and you’re like, OK, this is like my work outfit. Well, how do you justify that? You haven’t worn that somewhere else for personal purposes. And that’s the argument that a lot of taxpayers get into theory and it honestly is not justifiable.

People have actually taken this to tax court and they lost every single time. That being said, if you’re looking at things like building a photographer’s closet, that sort of thing, it’s not the intent is that it’s not for yourself. I think it’s more of a case that you could claim those sorts of items as business expenses in the sense of building a client wardrobe and offering [it to your client], then you can perhaps make that more of a reasonable claim and claim that as a business expense. But anything for yourself personally is a no go.

What are common business expenses, that get thrown out?

Short answer: clothing, vehicle expenses, meals and entertainment without justification

AH: I see a lot of people trying to claim clothing.

Another one that I see is vehicle expenses or personal use of a vehicle that there’s a lot of interest with around that. The other top thing I see is probably meals and entertainment. People try to flash through every single purchase that they make at a restaurant a business expense, but they can’t actually justify it and say who they were actually meeting. What was the purpose of that meeting or anything like that. So we see a lot of those types of items being being thrown out.

How do I handle bad debts from clients not paying?

Short answer: Start with a polite reminder and escalate if necessary.

AH: If a client hasn’t paid, start with a polite reminder email. If they still don’t pay, follow up with a phone call or a more formal notice. Offering payment plans can sometimes help if the client is genuinely struggling. In extreme cases, you may need to consider legal action or small claims court, but that’s usually a last resort.

To avoid this problem in the future, always require a deposit upfront before you start work. This ensures you’re paid something, even if the client disappears later on.

Should I apply for grants through my business or set up a nonprofit?

Short answer: You can apply through your business unless the grant specifically requires nonprofit status.

AH: If you’re applying for grants, check the eligibility requirements. Many grants are available to small businesses, but some may require you to be a registered nonprofit or charity. If most of your work involves community projects or charitable causes, it might be worth looking into setting up a nonprofit. Otherwise, applying through your business is often enough.

How do I position myself to reach my financial goals?

Short answer: Align your actions with your financial goals and review them regularly through your money dates.

Anisia Hurst: One of the most important things when it comes to reaching your financial goals is consistency and intentionality. You have to set those goals clearly—whether it’s earning a specific amount, paying off debt, or saving up for future investments in your business. Once you have that clarity, the next step is aligning your daily actions with those goals. This is where your “money date” plays a crucial role. During your regular check-ins, you can assess what’s moving the needle toward your goals and what might be slowing you down.

We often overlook how interconnected everything is, but regularly reviewing your money allows you to make those adjustments. For instance, if you set a goal of making $10,000 a month but realize you’re not meeting that consistently, then you can ask yourself: “Do I need to raise my rates? Find another revenue stream? Is my market willing to pay more?” That way, you are constantly aligning your efforts to support the lifestyle and goals you’ve set.

Having these regular reviews, whether weekly, monthly, or quarterly, removes the emotional charge around money and makes the whole process feel less overwhelming. Think of it as course-correcting. You’re making small changes along the way to keep yourself on track without overwhelming yourself with unrealistic expectations. Plus, these money dates aren’t about shame—they’re about empowerment, helping you understand what’s working and what’s not. They help you fine-tune your strategy, allowing you to achieve more without sacrificing your creativity.

How much money should I keep in my business chequing account?

Short answer: At least one month’s worth of business expenses, with any extra allocated to specific savings goals.

Anisia Hurst: A good rule of thumb is to keep at least one month’s worth of business expenses in your checking account at all times. This ensures that you can comfortably cover your immediate operational costs, even if client payments are delayed. Beyond that, where your extra money goes depends on your financial goals. For instance, if you’re planning to scale your business, invest in new equipment, or expand, those funds can be set aside in a separate account designated for those purposes.

Anisia also emphasized that it’s helpful to keep a separate account for taxes and savings. This will give you more control over your cash flow and keep you from accidentally spending money meant for tax remittances or emergencies. Additionally, having multiple accounts—such as one for taxes, one for an emergency fund, and another for business growth—helps you maintain discipline in how you manage your cash flow.

For example, if you have no immediate growth plans and are comfortable with where your business stands, you might focus on paying off high-interest debt (anything above 9%). On the other hand, if you’ve already taken care of that, you can start investing in tax-advantaged accounts like your Tax-Free Savings Account (TFSA), which is particularly advantageous if you’re in a lower tax bracket. The goal is to ensure that you’re not only prepared for today’s expenses but also setting yourself up for long-term success and financial flexibility.

Key Takeaways

• If you’ve made money on a product or service you’ve created, you’re a freelancer
• Once you hit $30,000 in revenue you need to register for GST
• Put away 25-30% of your income for taxes, and if you owe more than $3000 in taxes, you will be required to remit quarterly in the upcoming year.
• Once you set aside 25-30% of your income for taxes, the rest of the money is yours to distribute how you see fit.
• Have a separate business account for all your banking, and if you are not going to set up a separate business account in your first year, set up a separate account under your personal name
• Using an Excel spreadsheet or accounting software like QuickBooks will help you stay on top of your finances,
• Have a money date every week or months to look through all financial statements records and get comfortable with looking at your numbers
• Review the T2125 form provided by the CRA to see what you can and cannot write off for your business
• Grant money is taxable income—track how it’s used for business purposes.

I hope this information makes your next tax season easier and it’s a less scary approach to brewing your money in your business as well as personal life. I truly believe there is power in knowing your numbers as it will allow you to start figuring out what your next move can be, whether it’s in business or life.