Tax Tips for Self-Employed Canadians: What You Need to Know Before Filing

Being self-employed comes with flexibility — and added tax responsibilities.

If you earn freelance, contract, or side business income, you must report it correctly on your personal tax return. Here are key things to keep in mind before filing.

1. Report All Business Income

Self-employed individuals report income using the T2125 form.

This includes:

• Freelance work
• Consulting services
• Gig economy income
• Commission-based earnings

Even if you didn’t receive a formal slip, income must still be reported.

2. Deduct Eligible Business Expenses

One advantage of self-employment is the ability to deduct reasonable business expenses.

Common examples include:

• Home office expenses
• Software subscriptions
• Advertising and marketing
• Office supplies
• Business-use portion of internet and phone

Proper categorization is important to avoid issues with the CRA.

3. Understand GST/HST Requirements

If your revenue exceeds $30,000 in a 12-month period, you may need to register for and collect GST/HST.

Filing requirements vary depending on whether you file quarterly or annually.

4. Set Aside Money for Taxes

Unlike employees, taxes aren’t automatically withheld from self-employed income.

Setting aside a percentage of each payment helps prevent unexpected balances owing.

5. Keep Organized Records

Maintain clear documentation of:

• Invoices
• Receipts
• Bank statements
• Mileage logs

Good bookkeeping makes tax season significantly easier.

Filing With Confidence

Self-employment taxes don’t have to be overwhelming. With proper reporting and expense tracking, you can stay compliant and potentially reduce your tax bill.

👉 Book a self-employed tax consultation today and file with clarity.