Canadian Tax Questions - Royalties and Deductions

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RobMattingley
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsExclusiveForum Moderator
Posted Mon Mar 11, 2013 8:31AM

My Fellow Canadians:

From reading various threads of tax questions on iStock, there were a few couple things that didn't appear to have everyone in agreement.  Given that several of these threads were in years past, I thought it might be a good time to post again to see if a consensus has been made - and given the search functionality it is quite possible that I missed an important thread. 

I am going to try to phrase these questions in such a way that they can easily be found by a Google search.

Question One: Which line do I enter my iStock royalties on a Canadian Tax Return?
The T5 that we receive says that we should put the royalties on line 104 or 121.  In doing some research, it sounds like line 135 is also an option if there are expenses to deduct.  Do any of you take advantage of this option or do you simply use the standard line 104 or 121?

Question Two: What capital cost allowance (CCA) class do you classify your photography and lighting equipment as on your Canadian Tax Return?
In order to deduct expenses for my new camera and studio lights, I need to determine which CCA class to use for the depreciation.  From what I can tell, both camera equipment and lighting equipment would probably fall into Class 8 - Miscellaneous which has a rate of 20%.  Is this what you use?  If not, which class do you use and what is your reasoning behind it?

Any advice or additional information you can provide would be greatly appreciated.

Thanks,
Rob
kelvinjay
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsMember is a contributor and has less than 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloadsExclusiveMember has won a contestForum Moderator
Posted Mon Mar 11, 2013 8:41AM
Moved to OT - as this is essentially a question about how people arrange their tax affairs, rather than photography itself.
RobMattingley
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsExclusiveForum Moderator
Posted Mon Mar 11, 2013 8:42AM
Posted By kelvinjay:
Moved to OT - as this is essentially a question about how people arrange their tax affairs, rather than photography itself.

Thanks Kelvin - I had no idea where to post this!
RobMattingley
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsExclusiveForum Moderator
Posted Sun Mar 17, 2013 6:54AM
Can any of my fellow Canadians answer these questions? I posted this around the time of the forum changes so I think perhaps it was temporarily lost - and not that people don't actually know! I have talked to an accountant but he deals with Corporate Tax typically and doesn't do enough personal tax returns so couldn't really answer the questions (and given that I'm not paying him I don't want to make him do a bunch of research on my behalf if I don't have to). I'm just hoping that others of you have had to deal with the same issues and now know the answer.

Thanks to everyone who can offer any insights!
wolv
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a contributor and has less than 250 Video downloadsMember is a contributor and has less than 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloadsExclusiveExclusive iStockphoto Videographer
Posted Mon Mar 18, 2013 9:36AM
I use line 135 for iStock income so I can deduct business expenses such as equipment, supplies, home office etc. Industry Classification Code - 541920. CCA Class 8. This is the way I have been doing it since I joined iStock ten years ago.
RobMattingley
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsExclusiveForum Moderator
Posted Mon Mar 18, 2013 12:17PM
Posted By wolv:
I use line 135 for iStock income so I can deduct business expenses such as equipment, supplies, home office etc. Industry Classification Code - 541920. CCA Class 8. This is the way I have been doing it since I joined iStock ten years ago.

Sounds like I was on the right path so I'm glad to hear that is how you file as well.  Thanks for your response Don - much appreciated! 
wolv
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a contributor and has less than 250 Video downloadsMember is a contributor and has less than 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloadsExclusiveExclusive iStockphoto Videographer
Posted Mon Mar 18, 2013 3:16PM
YW, glad I could help.
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