*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.*
Travel is the one of the best parts of being an opera singer.
Sure, there are the weeks when it’s really not that fun… the non-descript hotel rooms, the 12th meal in a row at Applebees… but at the end of the day, I really like it.
And the only thing that makes it better is that all of that travel is tax-deductible!
Or is it?
What part of travel can you deduct?
A lot of it.
- your flight/bus/train ticket
- your hotel
- transportation to the airport (taxi or public transport)
- food (but only 50% of the total amount)
That’s the lion’s share of your travel costs, and it’s all tax deductible under a few conditions…
The ‘just do it like a normal person’ rule of traveling
The CRA is more than happy to give you a deduction for your travel as long as your expenses are reasonable.
What that means in this situation is actually kind of interesting.
I was talking to a few accountants and they made it clear that when the CRA is trying to figure out ‘reasonable expenses’ for travel (and also for business food) they don’t have some kind of absolute moral standard:
“A plane ticket should never cost more than $600. That’s the definition of a reasonable plane ticket.”
They look at what’s ordinary and regular for people in YOUR industry.
So that means that a reasonable plane ticket for a giant billion dollar corporation might be business class… but if you’re a self-employed opera singer pulling in less than 50,000 dollars a year… a business class ticket is probably less reasonable.
A tax deduction isn’t something to take advantage of… just travel like a normal person, and then claim those costs for the deduction you deserve.
Backing up your claims
As with any deduction, you need to have receipts … but one accountant suggested you also have some real proof that it was a business trip.
If you’re there for a job, that’s easy… a contract can be produced.
But what if I went to Chicago hoping to get an audition with the opera house there. Turns out nobody answered my emails and I spent the next 5 days eating awesome food and watching the Bulls play.
Even though I might have gone there for business… no business was actually done.
My accountant friend said the CRA is always on the lookout for personal trips disguised as business trips.
It would be better if I could provide emails to an auditor proving I had actual auditions that had real potential of getting me work.
If a trip is part business and part personal you may want to talk to your accountant about just deducting a percentage of the costs.