January 31, 2015

TAXES should be a 4 letter word

JANUARY 31, 2015

WAIT! I know, you’re about to close this page for something WAY more entertaining BUT, if you’re a self employed artist who is is thinking about applying for a mortgage in this century, you’ll want to stick around for this post. I’ll even ignore the fact that you spent $5 on coffee sitting beside your computer if you’ll just hear me out....

...still there?



Not a recommended topic for a party or a first date, but if you’re about to have the property conversation, you’re going to have to talk taxes, too.


So glad you asked.

* TAXES MUST BE PAID IN FULL before a lender will hand over the funds of your mortgage. You can always apply but, know that up to date taxes are a condition of your mortgage, and if you don’t fully pay all taxes owing before you close on your new home, the lender does not have to honour the contract. 

MY ADVICE: Be up to date when you apply for a mortgage (or at least have the paperwork filed). We’ll avoid surprises (for me) and disappointments (for you).

* YOUR NET WORTH (a.k.a. Line 150) on your tax return, is the magic number that we use to show how much you earned in any given year, more specifically, the two most recent tax years. For the self-employed this may feel daunting:

• Because you don’t consistently earn the same amount every year.
• Because you have so many deductions it looks like you live on fairy dust in comparison to your GROSS income.
There are ways to deal with this, however:

• many lenders will let you add 15% of your GROSS to your NET worth to bump up your income
• you can apply as a stated income client and use your GROSS income (this warrants further discussion - I’ll get to that later (or email me)

* PREPARE YOUR NET WORTH IN ADVANCE. Yup. If you know that you want to buy in the next year or two, or even as soon as this spring, you might want to re-think how aggressively you claim your deductions for all of those “business meetings” you’ve been having at “Coffee-Bucks.”

• more deductions = lower net worth
• lower net worth = harder to qualify for a mortgage
• less deductions = HIGHER net worth which is more helpful for your mortgage application.

Paying more in taxes to improve your NET worth for 1 or 2 years is NO FUN, but will potentially get you closer to your property goal. You can go back to claiming all of your deductions more aggressively after you get approved and settle into homeownership.

* FIND AN AWESOME TAX PERSON WHO UNDERSTANDS ALL OF THE ABOVE. My accountant is no longer taking new clients, so I was thrilled to find a tax professional to refer to you (ALSO a musician - applause!!!) who has found a niche for herself preparing taxes for hundreds of artists since 2006.

• Meet Tammi Hensch of HARMONY TAX SERVICES. A friendly, no-nonsense, financial professional who will look at your income, its various sources, and fluctuating amounts, entirely without judgement. Married to a musician as well, SHE IS ONE OF US, and I am confident that you will benefit from her experience as an artist working in finances. With an office in Toronto’s Annex and Hamilton, she’s convenient, affordable, and ready to help!

* START WHERE YOU ARE. Not everyone is up to date, organized, ready, willing, or able. Taxes, and money in general, can create a lot of anxiety and worry. I get it...and I can hear you from here:

• I’m behind on my taxes for more than a few years
• I don’t have everything organized
• I don’t think I can pay if I owe

MY ADVICE: It’s OK. Even if it’s a MESS, it’s still OK. Just start where you are. One receipt at a time.

Thanks for reading! 

All opinions expressed on this blog
are my own in their entirety.
Please see a tax professional to address
your specific tax inquiries.

January 10, 2015

Rags to Reasonable, welcome the the Cardinal Empire!

JANUARY 10, 2015

When I first ventured to Toronto in - wait for it - 1998!!!! - the phrase I heard most from the singing community was,

“Another SINGER from WINNIPEG...GEEZUS, what’s in the water out there?”

It’s true, there are a lot of us roaming the streets of Toronto and, as far as I can tell, the quality and quantity of singers from Manitoba continues to be strong. When I meet a fellow ‘Pegger there is an instant understanding between us; we don’t have to explain why we don't wear eyeliner, and we know the value of a sturdy pair of hockey mitts.

This past Thursday, most appropriately under a cold weather alert, I bundled up to go meet my new friend, fellow MB singer, and now MONEY BLOGGER (!!!!), Mr.

We had met a few times in the past through mutual prairie people but, when I heard that he had started a money blog for artists, I knew we had to connect;
kindred financial spirits! This guy was speaking my language. If you haven’t read his new blog, RAGS to REASONABLE, I recommend that you do!

Piping hot beverages in hand I asked him, “Why the blog? What was the tipping point from being merely interested in finances to wanting to sit down and actually SAY something about it...on line...for the world to see?

“I believe you should follow your curiosity”

(Nice one. I’m going to borrow that.)

With an excellent start in the Canadian Opera world, at the age of 29, he has already seen both sides of the coin: when things are going well, and those gig-less periods when you wonder what else you have to offer.

After a
lesson learned with the Canada Revenue Agency (gulp!) he took what he didn’t know about the business of being a singer and turned it into a passion.
(See? Kindred spirits!) Not only that, he is en-route to turning it into a potential side career, taking courses (in between his singing gigs) at the CSI (Canadian Securities Institute) with hopes of becoming a financial planner who,

“Serves the community in a way that KICKS ASS!”

(Couldn’t have said it better myself.)

Turning his former financial inexperience into his secret weapon, his primary goal is to be helpful. More specifically, he wants to give artists the tools to be in control of their financial futures. The BLOG is the first step. Getting Certified (a work in progress) is the next.

I had the opportunity to sit in on a chat that he gave at the UofT faculty of Music with the current Opera Diploma students. Most notably, he poked the bear and talked about budgets
(they all groaned or shifted uncomfortably in their chairs), as well as handy tips that he’s picked up from being a student at UofT, to an ensemble member at the C.O.C., to a self employed artist living the dream.

I hope you’ll take the time to check in with his
blog: I know I will! But for today, the thing that I hope to stress is that he is not afraid of changing
his definition of an artist. He can sing and he can help. Either way, he’s setting his own rules and following his own path of excellence: be it on stage, or one on one with a singer getting their financial sh*t together.

Welcome to the empire, Chris!

If you like what you see, 
please SHARE

Thanks for reading!

January 04, 2015

Don't think, just start.

JANUARY 4, 2015

At a particularly challenging singing lesson, I asked my teacher, “Is what I'm proposing to do even possible?”

He looked at me and said,

Anything’s possible if you don’t think about it too much. And YOU think about things too much. My career, on paper, looks crazy, but I do it just the same, ignore statistics and the way things should be.”

His career is a blog unto itself (apparently, so is his gorgeous NYC condo) but the point was if he overthought his crazy life plan (teaching on 4 continents, and starting a family) he would have stopped himself before he even started.

Stopping before you start is not a new idea, and I think that every singer, actor, instrumentalist, dancer (you name it!) has gone through the phase of,

• Will this actually work?
• Will it be worth it?
• Will I make an absolute FOOL of myself?”

Quite often, as long as it’s in our field, we do do IT, whatever IT is, regardless. If it works? Great. If it doesn’t, only 6 people showed up to witness defeat.

When we step out of the artistic comfort zone and into finances, however, I definitely think we stop ourselves before we get started more often than not.

Influenced by news reports saying, “Self-employed THIS, and self-employed THAT” we automatically decide that they are speaking directly to US, and that we should avoid catastrophe because statics have confirmed failure. THEY, the almighty, invisible, but ever-present, THEY, convince us to stop before we start.

This December I encountered conversations with artists who dipped their toes into the financial waters saying things like:

• How much do you officially need to earn to BUY a home in Toronto? To retire?
• I started to think about looking for a place but decided it would never happen.
• My rent is still less than a mortgage...I think.

My answers (a bit flippant, I know):

• It’s not how MUCH you earn, it’s what you DO with your earnings.
• There are as many financing options out there as there are sopranos in Canada. (I didn’t say it would be easy)
• Here’s where I go NUTS: No, your rent (in Toronto) *often* ISN’T less than a mortgage.

I’m not saying you can have your cake and eat it too. It can be tricky for the self-employed artist to qualify for financing, whatever the goal may be, but what I keep seeing, again and again, is that self-employed people stop before they start.

What artists don’t seem to know is that, unlike salaried people, because they HAVE TO SAVE, they HAVE something to offer, no matter what the goal may be:

• a house
• a family
• retirement
• investments
• travel

Financial news reports do not think the way you do about over-educated artists who can memorise complicated scores and wear tuxedos or gowns while living on cereal - they don’t think about you AT ALL.

ARTISTS are a different demographic entirely so, why we lump ourselves into the world of EVERYONE ELSE when it comes to finances is beyond me.

We’re smart and we’re surrounded by smart people. Just like many areas of society (especially when it comes to gov’t funding) our kind of SMARTS are not valued as highly as other fields. And we continue to buy into the same mentality just as quickly as we’ve been buying into the logic of a $5 coffee.

But! And this is a BIG BUT:

• Your smarts probably told you to start saving as soon as you left school.
• Your smarts probably set up an RRSP.
• Your smarts put money away for those months that you don’t gig and won’t make money, but will need to spend to prepare.

If someone told you that your career most assuredly would be feast or famine, you wouldn’t have started at all. Yet, here you are. You don’t over think WHY you create. You just have to do it.

Don’t over think your financial goals either. JUST START.

These are the things I think about on a Sunday, folks.

Thanks for reading!!!