5 tax tips for the Self-employed

There are certain peculiarities in how and when you pay your taxes if you are self-employed, as well as some distinct tax advantages. Make the most of them by following our tax advice.

1. Self-employment tax filing deadline

It is not the same as the personal tax filing deadline.

Instead of the customary April 30 tax filing deadline, if you were self-employed, your tax return filing deadline is June 15 for you and your spouse or common-law partner. Remember that if you owe taxes, you must pay them by April 30 (but you don't have to file the return until June 15).

2. Paying taxes in installments

Tax instalments are simply income tax payments sent to the Government of Canada on a quarterly basis to offset the taxes you would ordinarily pay with your return in April.

If you make money and no or insufficient tax is withheld, you will very certainly have to pay payments in the future. Also, if your net tax owing when filing is more than $3,000 (or $1,800 if you live in Quebec), you must pay in installments. On March 15, June 15, September 15, and December 15, installments are due.

3. The home office and the utilities

You may be able to deduct expenses for home-based business use, such as utilities, property taxes, and mortgage interest. Utilize a realistic basis, such as the percentage of work space split by total home area.

You can also deduct capital cost allowance, which is the depreciation on a firm's facility, furniture, or equipment.

4. Automobile log

You can deduct the percentage of your automotive mileage used to generate business profits. This covers licensing, fuel, oil, insurance, maintenance, and interest on a vehicle loan. To make this claim, you must keep a logbook.

5. Maintaining records

It is not only good practice to keep good business records; it is also a legal necessity to support your income and expense claims. You do not have to transmit any of these records when you file your tax return, but you must provide them if the Canada Revenue Agency requests them later. And you must maintain those records and supporting documentation for six years after the end of the previous tax year.

Go to the Government of Canada website or download the Government's Handbook to fully understand your tax requirements.