Self-employed taxes – 4 key questions to ask yourself before filing.


There are many things to love about being self-employed, but taxes aren’t one of them. Filing taxes when self-employed can be a lot more complicated. The good news is that we’re here with four questions to ask yourself before filing to help make the process a breeze.
When is the self-employed tax deadline?
Self-employed Canadians get almost two extra months to coordinate their taxes compared to the rest of Canada, but this also means that just when we finally escape the rainy, windy and sometimes icy spring weather, self-employed workers must lug out their paperwork.

If you are self-employed, your tax return deadline is just around the corner, on June 15th. That means that if you carried on a business in 2018, you should file with the Canada Revenue Agency (CRA) by that date to avoid a late-filing penalty. And although penalties can be avoided if you file on time, it’s important to note that interest will still be charged on any balance due from May 1st 2018. Hopefully by reading this article you’ll avoid missing the filing deadline altogether!

If you do end up missing it, the CRA will charge you a late-filing penalty equal to five per cent of the balance owing, plus another one per cent for every month you are late to a maximum of 12 months. Do you really want that?
Am I self-employed?
If you’re reading this article, you probably know you are self-employed, but just so we are all on the same page, you fall under this category if you retain control of how and when you do the work, supply your own tools to get the work done and run a financial risk if the venture is unsuccessful. Examples of self-employed Canadians include Uber drivers, freelancers and small-business owners who are not incorporated.

Some employers, however, treat their employees as self-employed when they should not be classified as such in order to avoid payroll taxes. If you are unsure of your status, you can request a ruling from the Canada Revenue Agency.
What business expenses can I claim?
Alright, time to get money back in your pocket (our favourite part). If you are self-employed, you can claim reasonable expenses incurred to earn your business income. However, you must keep a proper record of your income and expenses and prove your expenses with receipts. Receipts must include a description of the goods or services purchased, so you need more than just the electronic transaction record or credit card slip.

When should I claim GST/HST?
You are required to register for the GST/HST and start collecting it from your customers if your gross revenues exceed $30,000 in the last four calendar quarters or in any single calendar quarter. Keep in mind that registering for the GST/HST is beneficial to you since you can then get back the GST/HST you pay on your expenses in the form of input tax credits. If your revenues are under $30,000, you can still register voluntarily.

All in all, tax season doesn’t have to be a stressful or negative experience for Canadians and making sure you file by the June 15th deadline – and filing correctly – will ensure you have peace of mind to go about your life and your business without unnecessary headaches down the line.

A Tax Expert at H&R Block can help answer any questions around filing your personal tax return as a self-employed Canadian.