When you hear the phrase “I’m self-employed”, what springs to mind?
Your local lawn-care company? Your chiropractor who works out of their home office? Your childcare provider?
Any or all of these people could be considered self-employed and in today’s on-demand economy, there are many new versions of being your own boss which might not come right to your mind. If you just realized that you might be self-employed and need to talk to an expert to figure out your tax situation or get answers to your burning tax questions our TurboTaxLive is in your corner.
Here are 5 surprising ways to be self-employed.
1. Driving for Dollars
Ride-sharing and delivery has become a popular employment option for many people. Did you know that your Uber drivers, Uber Eats, Lyft, Skip the dishes or other types of ride-sharing drivers are self-employed? These driver partners use their own vehicles, choose how often they are available to work, and are small business owners.
2. From Candles to Condos
Direct sales are growing in popularity. Whether it’s buying scented candles from your neighbour or makeup from your daughter’s friend, many direct sellers are independent dealers. Real estate agents are also often self-employed rather than commission employees. This means that they don’t receive a T4 or have deductions withheld by the parent company. They track their own expenses and income.
3. The Write Stuff
Contract writing is also a great example of being self-employed which has been growing over the past few years. Not only can you now be paid “by-the-piece” for writing, new opportunities for editing, optimizing, and reviewing have sprung up as well.
4. One Person’s Trash
Reselling items online has turned into big business. If you’re thinking of starting a side gig selling items on sites like eBay, you could be considered self-employed. The profit you make from selling items is considered to be taxable in most situations. The good news is that if you’re self-employed, expenses related to your business are tax-deductible. For example, if you’re an online seller, the shipping fees you pay would be recorded on your tax return to help offset your income.
5. Caring for kids, pets, and other loved ones
Do you make extra cash pet-sitting or walking dogs? Do you operate an in-home daycare? If you answered yes to either of these questions, there’s a good chance you’re self-employed.
T4 or T4A?
If you receive a T4 for your work, you’re an employee and you have deductions for CPP, EI and income tax taken off your pay, and remitted by the employer on your behalf to the CRA.
If you have received a T4A (with amounts in box 20 or 48), you are indeed self-employed.
You could receive a T4A for a number of different ventures including direct selling, earning income from web pages, or even a one-day gig delivering phone books. It’s important to remember that if you have received a T4A, no deductions have been sent to CRA yet on this income. This means that any tax or CPP due will be calculated as part of your tax return.
In some situations, it can be hard to tell if you’re self-employed or an employee. The Canada Revenue Agency has specific rules to determine if you’re employed or self-employed which can be found here.
Using tax preparation software designed for self-employed taxpayers takes the guesswork out of taxes. With step-by-step instructions and easy-to-follow guides, TurboTax Self-Employed is the only software in Canada made just for you.
But, if you feel a bit overwhelmed, consider TurboTax Live Assist & Review for Self-Employed, and get unlimited help and advice as you do your taxes, plus a final review before you file. Or, choose TurboTax Live Full Service for Self-Employed* and have one of our tax experts do you return from start to finish.
*TurboTax Live™ Full Service is not available in Quebec