5 Tax Tips for the Self-Employed

Filing due date
(not the same as the personal tax filing date)

If you were self-employed in 2020, the tax return filing due date is June 15, 2021 for you and your spouse/common-law partner (CLP). Normally our tax payment due date is April 30, 2021.

Paying by instalment

If you earn income on which no/insufficient tax has been withheld, you will likely have to pay tax instalments in the future. You will be obligated to pay instalments if your net tax owing when filing is over $3,000, or $1,800 if you live in Quebec. Instalments are due the 15th of March, June, September and December.

Home office and utilities

You may be able to deduct expenses for business use of your home, including utilities, property tax, mortgage interest and capital cost allowance (that's depreciation, in tax terms). Use a reasonable basis, such as the percentage of space used for work, divided by total home area.

Automotive log

You can deduct expenses for the percentage of your automobile mileage used to earn business income. This includes licensing, fuel, oil, insurance, maintenance and interest on money borrowed to buy a vehicle. You must keep a logbook in order to make this claim.

Keeping records

Keeping good business records is not just good practice; it is a legal requirement for you to support your income and expense claims. Do not send any records when you file your tax return, but you will have to produce them if the CRA asks to see them later.

For more information, please visit the Government of Canada website

The information contained in this article was obtained from sources believed to be reliable, however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters.
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