Bet you didn’t get into vintage-selling because you love bookkeeping, right? If you have experience tracking expenses, then doing the bookkeeping for your own resale business is probably a breeze.

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But if you don’t, recording income and expenses, organizing receipts and getting ready for tax time can be extremely daunting and stressful.

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We asked Tova Epps, tax preparer at Artbooks, a Toronto-based tax office for artists and entrepreneurs, to help. She spoke to members of the Vintage Sellers Community on Nov. 23 to talk about bookkeeping and preparing for filing with the Canada Revenue Agency — well in advance of tax season in an effort to boost some good habits.

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Tova’s been doing taxes for the past 12 years, and as an artist and actor herself, she’s used to working with freelancers, artists, makers and sellers and can identify with their common tax scenarios.

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In the session, she covered what information resellers should collect and track throughout the year, how to prepare for tax season, GST/HST, bookkeeping softwares and more. We’ve rounded up a few of her tips below.

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1. Prepare for tax time in advance.

Everyone who earns income in Canada needs to file a tax return. Even if you’re not yet earning $30,000 in income a year — the minimum threshold to collect GST/HST from customers in Canada — you still must report your income from your vintage shop (even if it’s a side hustle).

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Self-employed individuals and solo businesses maintain a variable income, Tova told attendees of the session. That means the money you make goes up and down every month — some months you might sell more, and in other months less. There also may be months where you have other sources of revenue coming in, too.

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When you file your taxes, you might be in one of those lower periods, so you don’t want to get hit with a big tax bill all at once. Tova advised setting aside money every month into a separate account that you can use to pay your taxes by the Apr. 30 deadline.

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2. Know the difference between taxable income and eligible expenses.

In the session, Tova covered the basic taxable income a seller might encounter:

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• Employment income
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• Grants
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• Cash payments (from markets, cash consignment, etc.)
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• Investment income
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• Online sources such as Etsy, Patreon, etc.
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• Fundraiser income

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But you can claim expenses against your income so you don’t have to pay as much tax. Tova shared how to determine what business expenses are eligible for deduction, how to record them, and how to calculate inventory expenses.

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“Don’t look at your bank statements — they’ll have random deposits where you won’t know what they are,” she said. “You want to be looking at the root of what you’ve made. If you’re using a Square reader at a site, that’ll give you a decent report. Or a Stripe, or a Shopify, those are all going to give you reports. For your cash stuff, have a notebook or an invoice book to track.”

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3. Consistently track throughout the year.

“Make your bookkeeping pleasant,” Tova said. Set a calendar reminder to go through your sales and receipts once a month so that you don’t leave it until tax time, when it suddenly feels a lot more overwhelming.

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She advised members to figure out a system for tracking that works for them, and shared a few of the apps that are out there to help with bookkeeping, such as:

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• Quickbooks
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• Freshbooks
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• Xero
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• Wave
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• Kashoo

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But good old-fashioned Microsoft Excel or a pen and paper work just as well for those who are less finance savvy — there is less room for error.

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“If you’re going to use an app, they’re designed for people who have a bit of education about bookkeeping,” Tova says. “You need to establish the ‘rules’ that you’re going to use that are going to apply to your expenses, and be consistent...these apps work on predictability.”

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Once you get into the habit of tracking, determining the health of your business becomes a lot easier. “We don’t want to be spending so much money in running our business that [it’s] always losing money,” explained Tova.

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“The government assumes that most businesses will lose money for the first couple of years, and that’s okay. But after a couple of years you have to show what they call ‘an intent to earn a profit.’”

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Attendees of the session got an inside look at her methodology for simple income and expenses tracking, and access to our free sales tracking template to use for their own shop.

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Tax tips for sellers: Event replay

The full, recorded version of Tova’s workshop and our tracking templates are available to members of the Vintage Sellers Community.

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Join our group of resellers who are actively investing in professional development and exchanging best practices. You’ll get access to all of our events and webinars (and replays!), exclusive content on running and growing your vintage business, our private discussion boards and more. You’ll also be able to register for our upcoming session with the Canada Revenue Agency on Mar. 28, 2023.

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