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    How to File Taxes if You’re Self Employed

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    freelance taxes canada

    With tax season approaching, now’s the time for small business owners to start planning their returns. Read our article for some tips on how you can get prepared.

    Millions of self-employed Canadians gaining their main income from either small business or freelance opportunities. While this comes with plenty of benefits and freedoms, one of the downsides is that they’re responsible for their own taxes. Filing taxes can be a complex and daunting task, but it doesn’t have to be. Here are some tips on how to file self-employed taxes in Canada.


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    1. Gather your documents

    Preparation is the name of the game when it comes to doing your tax return, so make sure you have everything you’re going to need. Here’s a list of some of the things you’ll need before you file your taxes:

    • Personal information. You’ll need your name, date of birth and social insurance number (SIN)

    • Business information. This includes your business name and address, your industry code, and GST/HST number, partnership number, or business identification number.

    • Income information. For this, you’ll need to know how much net income you made from your business throughout the tax year for tax purposes.

    • Expense information. This is where keeping track of your receipts throughout the year makes it easier on you come tax season. For this step, you’ll need receipts, statements, and bills of all your deductible business expenses. Be sure to do a little digging into what expenses are and aren’t deductible.

    Doing a little preparation beforehand and throughout the year could mean more cash back (or less owing) when your return is finally filed.

    2. Log into the Canada Revenue Agency website and create an account

    Creating an account with the Canada Revenue Agency website is a simple process that can save you a lot of time and energy. All you need to do is head over to their website, click ‘Sign up Now’, and fill out your information. Setting up a CRA account online will give you access to view your tax deductions and activity for free, as well as other online services like direct deposit sign-up. Plus, you’ll be able to manage your information from the comfort of your own home — no waiting in line or trying to make it to the post office before closing time. Registering on the CRA website guarantees a user experience that saves both time and money.


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    3. Follow the instructions on how to file your taxes as a self-employed individual

    Filing your taxes as a self-employed individual can seem overwhelming and complicated, but there are some helpful resources available to make the process much simpler. From new business owners to seasoned entrepreneurs, everyone needs to understand the basics of taxation. To get started, the first step you should take is determining if the IRS considers you a self-employed individual — if any income was earned outside of an employer/employee relationship, then the answer is yes. After establishing that you are self-employed, you will be able to file and report your taxes accordingly with Schedule C – Profit or Loss from Business. The IRS website has plenty of guidance on tax responsibilities for those who are self-employed so it’s worth reading up on relevant material before tackling your taxes. You can also try checking out your local library for any materials they may have that can provide you with more detailed instructions.

    4. Make sure to keep track of your expenses throughout the year so you can claim them on your taxes

    Keeping track of your expenses throughout the year can have many benefits, especially when it comes to filing your income taxes. Not only will you save yourself time and effort trying to remember every dime spent, but you will be able to maximize your tax return by claiming all that you are eligible for. Start off the new year by planning ahead and setting up folders or spreadsheets of your taxable income and expenses so that nothing gets forgotten come tax season. Keeping a few receipts here and there might seem like an inconsequential task, but it could make all the difference in how much money goes back into your pocket once you deduct expenses.


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    What expenses can self-employed Canadians claim on a tax return?

    Self-employed Canadians may be able to claim a variety of expenses on their tax return, including those for business use of the home, vehicle costs, travel expenses, meals and entertainment, capital cost allowance (depreciation), fee-for-service contract payments, office supplies and equipment, interest paid on business loans or lines of credit, salary and wages, health plan premiums and more. Make sure to fully research which expenses you can claim so that you get the most out of your tax return.

    5. If you have any questions, there are many resources available online or you can speak to an accountant

    If you’re uncertain or confused about any kind of financial matter, then you’re certainly not alone. There are many helpful resources available to you, both online and in person. You can look up answers on the Internet or ask questions directly to an experienced accountant who can guide you along and answer all your queries. Doing so will ensure all your questions are answered accurately and help to alleviate financial worries. Whether it’s simple queries or resolving more complex tax laws, having access to independent advice is invaluable in order to get the right guidance at the right time.

    Filing small business owners or freelance taxes in Canada doesn’t have to be a daunting prospect. As long as you’re organized and prepared, paying your taxes can actually be quite easy. Gather your documents, log into the CRA website, and follow the instructions. Keep track of your expenses throughout the year so you can claim them on your return, and if you have any questions there are many resources available to help you out. With a little bit of preparation, filing your taxes will be a breeze.

    Being a self-employed small business owner comes with a lot of responsibilities. APOLLO Insurance is here to help with insurance solutions that are designed to protect you from unforeseen events that could end up crippling you financially. Get a free quote today and have your new policy emailed straight to your inbox within minutes.


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    Originally published January 12, 2023, updated August 25, 2023

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