*I am not a tax professional. This is meant to be an educational tool and NOT a recommendation. Each personal situation is different and there’s a lot of grey area in self-employed deductions. If you have questions (even just little ones) … talk to a tax expert.*
In the opera business you need to look fancy. Sometimes really fancy. I would say… the most fancy.
And so, even though we can’t really afford rent next month, we trek out and spend hundreds of dollars on suits and gowns.
For the business, right?
Except… that when I buy a suit ‘for business’ it might also be the suit I wear to my cousin’s wedding, and for that guys’ night when we promised we’d all ‘suit up’ and take Mark out for birthday drinks.
So when it comes to tax time… how do you treat those specialty clothes of yours?
Everyone needs clothes, but does everyone need a tux?
For some reason the CRA doesn’t have a specific section on performance clothes…. weird, right?
But I talked to several accountants who work with performers and here’s what the conclusion seemed to be.
Yes. You can deduct performance clothes.
Depending on your particular circumstance (and how much your other deductions are) it’s best to take a percentage of the cost (the percentage you use for business), which can be 100% if you think that applies.
How does that deduction work?
When you buy something like a computer, office furniture OR clothes… anything that lasts several years… you don’t get to deduct the full amount in the year that you bought it.
That’s because since you’re getting business use out of that item over several years, the CRA wants you to spread out the deduction over several years as well.
They call it a Capital Cost Allowance (because it’s super clear…ugh).
If you have an accountant, they’ll figure all this out for you… but just in case you’re into the nerdiness of it, you can check out how the CCA deduction works HERE (the example I used in that piece is for a computer. Your performance clothes go in Class 8 at 20%… all the other rules are the same).