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Tips for Filing your Self-Employed Tax Return

by:
Jennifer Gorman, TurboTax Social Care Leader

If you started a new side gig, picked up freelance work or ditched your 9-5 for self-employment last year, congratulations! Being your own boss has its share of perks, but it also brings new challenges. If this is your first time filing your taxes as a small business owner (self-employed), here’s a few tips to make tax time easier.

Unless your business is incorporated, your still only filing one return.

Your self-employment activities are included in your “regular” personal tax return; it’s just an extra form. In addition to what you usually enter on your return (T slips, credits & deductions, etc.) you’ll also enter the details about your business, side gig, freelance work, etc. You’ll need:

  • Total income & expenses related to your self-employment.
  • Information about your business, like your GST/HST number (if you have one).
  • The industry code that describes your self-employment. Don’t know your code? No worries. Learn how to find yours here.

Pro Tip: Separating your business and personal expenses throughout the year saves headaches at tax time. Use one bank account for business, and another for personal banking.

Take the time to get organized before you begin your return. 

Rather than starting your return then having to stop to find that pile of receipts buried in your closet, gather the paperwork you’re going to need before you start. Sort your receipts into categories and add up your totals for each group. Find your:

  • Income amounts – how much your business has earned. This could be something simple like a receipt book or invoices. If you’ve kept a spreadsheet, even better!

  • Receipts for expenses. Common expenses include inventory, office supplies, advertising (like your business cards), meals, vehicle expenses, and bank fees.

  • Personal info for you and your family. You’ll need Social Insurance Numbers for you, your spouse, and any dependents who might have, along with everyone’s date of birth.

Pro Tip: A copy of last year’s return is always a handy tool. Reviewing what you claimed last year helps ensure you’re not forgetting anything this year.

According to a recent survey, getting organized is the most daunting part of the tax preparation process for more than a third of Canadians. Keeping track of your receipts year-round can make a huge difference at tax time. There are lots of great apps that can help. If you’re self-employed, QuickBooks Self-Employed is a mobile app that makes it easy to stay in control of your business finances while also helping you prepare for tax time thanks to effortless expense, mileage and invoice tracking, all in one place!

If your home is your headquarters, you may be eligible to claim business-use-of home expenses, including:

  • Utilities, like heat and electricity
  • Rent or mortgage interest/property taxes
  • Home phone & internet
  • Insurance
  • Maintenance & repairs

Pro Tip: To make tax time even easier, sign up for online billing for your utilities. Having all of your monthly bills in one place saves time, effort, and trees!

When you’re ready to sit down and do your taxes, choose a trusted tax software to help you save time, money and frustration. TurboTax Self-Employed is the only tax preparation software made specifically for self-employed individuals. It includes step-by-step guidance, helpful tips and automatically searches through all applicable tax credits and deductions you may qualify for to ensure you get your taxes done right!

Topics: Taxes

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