Tax For Artists

Understanding and fulfilling your tax obligations as a maker can be overwhelming. This toolkit provides you with links to various sites that contain plenty of useful information to help you get it right. Read on, it may not be as overwhelming as you think!

For advice on tax, we went straight to our auditor Brian Tucker. Brian is a CPA with over thirty years’ experience.

He has sat on the board of many arts organisations and is currently treasurer of several organisations including Arts Law Centre of Queensland and Museums Australia (Queensland).

Brian delivers an annual INFORM session for Guildhouse when he’s in Adelaide to answer all your questions about tax and artists.

A man in a studio space stands centre of the image, and is seen painting a nearly half blank canvas

Brian Tucker at Tjarlirli Arts

Lots of useful information about tax and book keeping for your arts practice can be found on Brian’s website. Brian’s site is a great resource for information that can help you determine if you’re actually in business, understand what qualifies as a tax deduction and explain some of your obligations if you take on contractors or employees.

To get you thinking about some of your obligations and responsibilities we asked Brian one simple question…

What are the first five things I should do if I’m starting a business as an artist?

1. Apply for an Australian Business Number (ABN) because you will need one for any business to business transactions; if you do not have an ABN, your client business is required to withhold 49% tax from any payment due to you. Unless your gross business income is going to exceed $75,000 per annum you do not need to register for GST but may do so voluntarily – seek advice.
2. Open a bank account so that you can readily identify business related income and expenses; non-business expenses will be recorded as ‘Personal Drawings’ which, in a way, is your ‘wages’. While a separate bank account isn’t absolutely necessary you will be conforming to the ATO’s expectations of what people in business ‘do’.
3. Set up a system to record your income and expenses; it may be an Excel spreadsheet, or accounting based software such as MYOB or Xero. If you go for the software, do spend some time learning how to use it or your accountant’s fees will be going up, rather than down.
4. Learn to become as obsessive about keeping any paperwork that includes currency-related numbers as you are about making and selling your art.
5. Become familiar with (and not frightened of) how the taxation system works – what income counts, what expenses don’t – and don’t allow yourself to be lectured to by people who probably know less than you.

You should also visit the following links for excellent resources and information:
• Business section of the Australian Taxation Office website.
https://www.ato.gov.au/Business/
• This section of the Department of Industry, Innovation and Science website will help you establish if the work you’re doing as a creative is for a business or a hobby.
https://www.business.gov.au/info/plan-and-start/a-business-or-a-hobby
• If you don’t have an ABN you may need to provide a Statement by a supplier not quoting an ABN form. Find out more about Statement by a supplier not quoting an ABN and download the Statement by a supplier form
https://www.ato.gov.au/Forms/Statement-by-a-supplier-not-quoting-an-ABN/

Keep an eye on our website for Brian’s next Tax for artists INFORM session for an opportunity to have your tax questions answered.

Guildhouse financial members are able to obtain one on one professional development support about many areas of their practice. Contact us for more information.