A lot of people start out doing dance-related stuff as a side-hustle besides studying or their regular job. That is a great idea. What is not so great is that most of them don’t care about doing in the right way, which can lead to major problems later on. As soon as your income is above a certain threshold, most countries require you to pay taxes and/or mandatory insurance. I will not go into detail about this as taxes and laws are different from country to country and sometimes even from county to county.
What I want you to be aware of is the fact that the money you save by not registering your freelance activity and therefore not paying taxes is nothing compared to the potential issues you can run into.
What are the potential problems?
- When you get caught you have to pay the money you saved plus an additional fee, which sets you back money-wise.
- Depending on the severeness, you might get a criminal record. In some countries, it is legal and easy to check these. If you have a criminal record, a lot of people won’t hire you at all.
- Dealing with an examination of the tax office is a pain in the ass, that will keep you from doing your work.
- If you don’t work official, your time does not count towards your pension.
So what shall we do?
Inform yourself about the legal situation for freelance dancers in your country. Start with finding out if there is a lobby or special interest group for dancers. It’s most likely a part of freelance artists or freelance entrepreneurs. Google will tell you.
FOR AUSTRIA: You can find all the relevant info online. You need the “Finanzamt” of your hometown, the “Sozialversischerungsanstalt der gewerblichen Wirtschaft bald Sozialversicherung der Selbständigen” (Dance is a “Freies Gewerbe”) and for potential general questions the “Wirtschaftskammer”.
If you can not find the Infos you need online, call the office of said institutions and ask for an appointment to talk you through the process of setting you up for legal work in your field.
If there is really no interest group taking care of your work, then just hit up the municipal authorities and they will point you in the right direction.
It is possible to do everything on your own but I highly recommend working with an accountant and an attorney.
The accountant will take care of all your tax-related stuff and usually save you more money than he or she costs. Look for a freelance accountant and not one inside a big office. There are people specialized in small businesses. If your company will grow big, you can still change to a bigger office, when you need the additional manpower.
Hopefully, you will never need your attorney but in case you have issues, he can help with settling it. No matter if you need someone to defend you or someone is trying not to pay an invoice. Having legal expense insurance comes in handy if you need the attorney’s help.
With everything regarding taxes and law taken care of, you can focus on doing your work that matters. Do yourself that favour.