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Tax forms for self-employed workers.

March 26, 2024

As a self-employed worker there are many tax forms you’ll need to complete and submit to the Canada Revenue Agency (CRA). This blog will help you identify which forms are applicable to your unique tax situation.

Registering for a Business Number:

Before diving into the tax forms, it's important to ensure that you have a Business Number (BN). A BN is a unique identifier that Canada Revenue Agency (CRA) assigns to your business. Registering for a BN is mandatory for most businesses in Canada, including self-employed individuals.

Note: if you’re a gig worker, registering for a BN isn’t mandatory, but it’s recommended for easy tracking of income and expenses.

As a self-employed worker, you’ll be responsible for reporting your business income and expenses on your personal income tax return. The following are the key tax forms relevant to self-employment:

Form T2125 - Statement of Business or Professional Activities:

The T2125 form is used to report your business or professional income. It includes details of your business activities, income, expenses, and net income. You should complete a separate T2125 form for each self-employed business or profession you have.

What’s the difference between business income and employment income?

Business income is money that you earn from a profession, a trade, or any other activity you carry on for profit while working for yourself. Such as, having your own business, working as a freelancer, or doing independent jobs. If you provide a product or service and get paid for it, that money is considered business income.

Employment income refers to the money you earn as a regular employee, like wages or salary received from your employer and wouldn’t be reported as business income.

Form T2121 - Statement of Fishing Activities (if applicable):

If you’re engaged in commercial fishing activities, you’ll need to complete Form T2121. This form is specifically designed for reporting fishing income and expenses.

Form T2042 - Statement of Farming Activities (if applicable):

If you’re engaged in farming activities individually or through a partnership, you’ll need to fill out Form T2042. This form is specifically designed for reporting farming income and expenses.

Goods and Services Tax/Harmonized Sales Tax (GST/HST):

If your business income exceeds the threshold of $30,000 in the last four consecutive quarters, you’ll need to register for GST/HST.

The exception to this would be if you're a taxi operator or commercial ride-sharing driver (Uber, Lyft, etc), you need to register to GST the first day you earn business income.

GST34 - Goods and Services Tax/Harmonized Sales Tax (GST/HST) Return:

This form is used to report your GST/HST collected, input tax credits, and any net tax owing or refundable. The frequency of filing this form depends on your business revenue and the reporting period assigned by the Canada Revenue Agency (CRA).

Tip: Check out the RC4022 - General Information for GST/HST Registrants.

This helpful guide will provide information on GST/HST registration, collection, and remittance.

Payroll taxes (if you have employees):

If you have employees, you may have additional tax obligations related to payroll. Here are some key forms related to payroll taxes:

TD1 - Personal Tax Credits Return:

Employees fill out this form to calculate the amount of income tax to be deducted from their pay. As an employer, you need to keep a copy of each employee’s TD1 form.

T4 - Statement of Remuneration Paid:

As an employer, you’re required to provide your employees with a T4 slip, which summarizes their income, deductions, and taxes withheld during the year.

Form T5013, Partnership Information Return:

If you’re a self-employed individual who operates your business in a partnership, there are additional tax documents that you’ll need to fill out, such as the T5013 form.

The purpose of Form T5013 is to report the partnership's income, expenses, deductions, and credits for the tax year. It provides detailed information about the partnership's financial activities.

The form requires you to provide information about the partnership, including the names and identification numbers of the partners, their respective share of partnership income or loss, and any changes in partnership ownership during the tax year.

If the partnership has incurred a loss during the tax year, this information needs to be reported on Form T5013. Partners may be able to use their share of the partnership's loss to offset other income on their personal tax returns.

Navigating self-employment tax forms can be complicated but H&R Block Tax Experts are here to help. Find an office near you to book an appointment today or file yourself with our easy-to-use self-employed tax software, help is always available if you need it with our Expert Help service.

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