I recently spoke at a creator economy conference, on a panel called “The Business of Being a Creator.” One of the key topics? Taxes!

We joked that in a world of free PR and viral video strategy, our panel was the most “boring” of the day. But afterwards, we had a number of creators come up to us saying,“this should be taught in schools.”

And it’s true. I’ve been an entrepreneur for the last 12 years, and have made my fair share of mistakes simply because, “you don’t know what you don’t know.” If there’s one thing I do know, it’s that the more you make, the more you pay.

Having gone from freelancer and full-time content creator, to small business owner with 15 employees, here’s some tips I’ve learned along the way:

Do’s

1. Open a separate bank account for all money coming into your business. This is a simple one, but when you’re a content creator and YOU are your business, it’s tempting to just pool it all into your personal income. What I love about separating the two (even if you’re a solopreneur or sole proprietor) is that it gives you a super clear view of how much you’re actually making compared to your 9-5. This helps you forecast and save for taxes.

Tip: When I incorporated my company, Hermana Agency, I opened an ATB Small Business Account, which had low fees & perks that helped me get started!

2. Set aside 20-30% from every brand deal for taxes. Yes, it’s a lot. But if you get in the habit of setting it aside every time money lands in your bank account, it becomes like clockwork. It’s also better to save more than you need, so you don’t end the year panicking over a big tax bill.. If and when you incorporate, the small business tax rate is lower! But it’s more complicated (legally and accounting-wise) to upkeep a corporation (vs. being a sole proprietor), so definitely speak to an accountant to understand at what point it would make sense for your business.

Tip: Open a savings account for taxes, so the money you set aside can make some money for you throughout the year! You can set these up as a recurring transfer if you have a steady income stream or make one time payments on ATB Personal. 

3. Speak to an accountant about “write-offs” to reduce your taxable income. For content creators, you can write off things like:

• Editing software subscription
• Website domains
• Transportation to & from client meetings or brand events
• A portion of your rent if you work from home
• Gifts for clients (ex. sending flowers as a thankyou)

4. Keep your receipts for every business related expense. Like the things mentioned above.

Tip: Create a folder on your computer to store photos of receipts from the year, instead of keeping the physical ones - it’s way easier to organize. Just make sure to back it up in the cloud or in accounting software!

Don’ts

1. Don’t make personal purchases from your business account, or vice versa. It’s not the end of the world, but it does make it harder to accurately predict your profit and plan for taxes. Plus, you might forget about business expenses you made on a personal credit card, and lose out on that write off, resulting in owing more taxes than you should (yes, I’ve done this before and kicked myself for it).

2. Don’t give in to lifestyle creep. It’s easy to get excited when you’re getting larger brand deals, and money is hitting the bank! But numbers can be deceiving - remember, if you’re a sole proprietor, your take-home is closer to 70-80% of the amount on the invoice.

3. Don’t file late! Take it from someone who has made this mistake before - filing late makes the tax anxiety, and your bill to the CRA so much worse! There are penalties to filing late, so try your best to get things organized by the filing deadlines:

• If you’re self-employed, June 15 is the deadline to file taxes
• If you owe taxes, they must be paid by April 30 to avoid interest

4. Don’t beat yourself up over poor tax planning. This stuff isn’t taught in schools, and still raises questions for seasoned entrepreneurs. One of my favourite sayings is that “worrying means you suffer twice.” You might stress about tax season, just to end up with no tax bill at all. On the other hand, if you’re hit with a shocking tax bill, take it as a learning moment to better prepare next year (and also, be grateful that it means your business did well!).

If you’re wondering how your personal finances impact your company’s growth check out this article by ATB!

Meet Kayley

Kayley Reed is the founder and CEO of Hermana Agency, a boutique management team for digital influencers. She has been an entrepreneur for over a decade, with much of that time spent as a content creator and freelancer before launching Hermana in 2021. Now, she leads a team of 15 women and has worked with brands like Google, Calm, L’Oreal, YSL, Patron, and Revolve.