You know what they say about which two things in life are certain...
Spencer MacIntyre might not be able to help you duel death, but he can take care of your taxes. The Toronto-based accountant started his firm SIFA Group seven years ago, working primarily with clients in the music, hospitality, and body modification industries -- in other words, a mix of W-2 and freelance/independent contractor work, every form of payment imaginable, and lots of potential write-offs to wrangle.
He generously took some time at the beginning of tax season to talk with Metalhead Money about how he helps clients on both sides of the border. Be sure to consult your own tax professional with any questions you have, but MacIntyre's insights are a good place to start...
Tell me about SIFA Group. How long have you been running this accounting firm? How have you built your clientele?
SIFA Group was started, accidentally, in 2015. I was working at a music industry-focused accounting firm for 2.5 years prior to that and had left to pursue other interests; the following tax season I was approached by a few former clients about preparing their tax returns. Needing the extra cash, I agreed and those clients were happy enough that they spread the word. After a few posts on Facebook, friends reached out and things started to snowball from 35 clients in my first year to over 1000 repeat clients and constantly growing.
SIFA Group has grown to a point I had never expected and now I deal with some incredible artists and their affiliates as well as aspiring, upcoming and emerging artists. This incredible journey has been built on referrals and my reputation for efficient, friendly and accurate work.
You are based in Toronto but also have some clients in the US. What similarities do you find with clients on both sides of the border?
I think the most common issue on either side of the border is where to start. To me, the beginning is considering your band a business. It’s a job. You’re an entrepreneur. Once you start looking at it that way the rest will follow. Also, missing receipts; keep your receipts from every purchase and make sure they’re well organized, flattened and away from everything that could potentially damage them or make them illegible…like air and the sun. Make sure to write notes on them as well. If it’s an electronic receipt keep it in your email. Hell, take a picture of every receipt and email it to yourself with a note about what it was for an how it relates to your business -- i.e. “meeting with accountant” when we’re having dinner.
US tax season is coming up. (And perhaps Canadian tax season as well??) Of course nothing on this blog should be taken as definitive tax advice and people should always consult with their own tax professional.... But if you're in an underground band that make a small amount of money, should you claim it as income? How does business vs. hobby work in the eyes of the IRS?
Yup! Canada’s tax deadlines are April 30 and June 15. April 30 for everyone and June 15 for individuals with self-employed income (such as income from music) though if you owe anything interest will start accruing after April 30.
(Editor's Note: The United States deadline to file 2021 taxes is Monday, April 18th, 2022.)
I believe that every band should claim their income, no matter how small, and begin to operate like a business. This will help you see and track your growth and prepare every band for that crucial moment when it all hits and they take off. A band can understand their finances better and know what potential deals and purchases will help or hinder the band.
Additionally, losses from business activities reported on your personal tax return can potentially increase one’s refund. Not to mention, the CRA and IRS require you to report income from anything they view potentially as a business.
What kind of deductions should professional musicians be aware of? How about freelancers or self-employed folks in any field?
There are a few similarities but the most common question I get is, “What can I write off?” Of course the CRA and IRS have their own categories for expenses. However I like to put those categories in to three of my own: operational expenses (guitar strings, gas to and from gigs, jam space rental), business growth expenses (advertising on facebook and Instagram, stickers, flyers) and expenses to improve your business. That last category includes classes, convention tickets, and my personal favourite category, “research,” which I refer to as “fun expenses.” “Fun expenses” include going to concerts so you can check out how other bands are doing their thing and network, Netflix and Spotify subscriptions to see what’s trending and being used in film... If you can tie the expense back to your band making money now or eventually, make sure your tax preparer, accountant, and bookkeeper know about it.
I typically associate accountants with only "doing taxes," but what other kinds of things would an individual or business look to an accountant for?
A lot of accountants offer advice to help grow and where to source additional income. Accountants usually deal with a number of businesses and can hook you up with their other clients in some cases (I know if a client needs a publicist, I know exactly where to send them). Additionally, some accounting firms offer bookkeeping to track your income and expenses for you, if you can afford it, definitely worth the extra money.
Any final words of accounting wisdom for hobbyists and professionals in the underground music world?
Keep your receipts. Make sure your accountant knows your industry or is flexible and can learn about the intricacies where music income can be sourced from so they know what to expect come tax time (I’ve seen some er, less than favourable, scenarios). It's important to remember that your accountant doesn’t work for the CRA or IRS -- so be honest and open with them so they can help get you the most optimal result.
Wanna chat? Book online at: www.sifagroup.ca
Connect with Spencer:
Personal IG: https://www.instagram.com/shitspennysees/
To learn more about budgeting, band finances, and more, order Money Hacks for Metalheads and Old Millennials in paperback and ebook formats: https://amzn.to/3lCsFdq
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