If you’re feeling pressure as a self-employed, last-minute tax filer, let’s change that.
We’ll give you the support and tips you need to get organized and file without breaking a sweat. Why risk paying penalties and interest when you can file like a pro and get a potential rebate faster? It’s not too late. Let’s go!
- The tax deadline for self-employed filers is June 15, 2024. Avoid interest and penalties by paying any balance due by April 30, 2024.
- Use a tax checklist to make sure you have all the forms and receipts you need to file.
- Set yourself up for success by registering for CRA My Account and filing electronically via NETFILE
1. File on time
It’s important to file on time. Even if your business didn’t turn a profit. And even if you owe money you don’t have on hand. It’s better to pay a little interest than get dinged with late-filing penalties. If you can’t pay your balance owing, you should still file on time to avoid being charged the late-filing penalty.
Note: A 5% penalty on a $5,000 tax balance represents $250 (plus an additional 1% for each full month you file after the due date, to a maximum of 12 months.) The CRA also offers a payment arrangement for those who cannot pay their balance in full.
For Québec residents, the late filing penalty is also 5% on any balance due to the province.
If you’re self-employed, the Canada Revenue Agency (CRA) will give you until June 15, 2024 to file your taxes without penalty. The catch: if you do owe money, you’ll be charged interest from May 1st forward. Just another reason to file without further delay!
2. Figure out which self-employment category best describes you
For tax purposes, there are a few classifications you can fall under as a self-employed person. Each has its own tax requirements and nuances to wrap your head around.
- If you run a business by yourself and it isn’t incorporated, you’re either a sole proprietor or an independent contractor. This means you’ll file using a T1 and complete the T2125 – Statement of Business or Professional Activities (conveniently located within the T1).
- If your self-employed business is operated by two or more parties, you are in a partnership. In addition to filing your personal taxes, you’ll have other forms to complete, including the T5013, if your revenues, expenses and/or assets are high enough.
3. Find your industry code to file
Once you know your self-employment category, the next step is finding your industry code. You’ll need this 6-digit number when filling out the T2125 (Statement of Business or Professional Activities) to report your income. Without it, you can’t file electronically using CRA NETFILE.
4. Automate the filing process
There’s a lot of information to keep track of when you are self-employed. Signing up for CRA My Account is the first step to making it easier.
Once you’re registered, you can find all your personal information, make changes to past tax returns, see what your RRSP limits are, and view your Notice of Assessment. It’s just so handy.
5. Keep a checklist
There’s so much to keep track of when you run your own business. It can be dizzying. Wouldn’t it be nice if there was a tax checklist to help you do that?
Well, there is one. And it’s indispensable to any self-employed person.
TurboTax Self-Employed Tax Prep Checklist
6. Know what you can claim
To claim or not to claim? That is the question. Some expenses are obvious—some, not so much. We’ve rounded up some of the top deductions you could be eligible for so that your bottom line will thank you.
TIP: Watch out for expenses that aren’t 100% deductible. For example, items shared personally with your business and meals and entertainment are only deductible at 50% (and should be for meals with clients during business meetings, not solo caffeine runs).
Self-employed expenses calculator
7. Double-check your tax return for accuracy to avoid getting audited
No one likes an audit. Accuracy and keeping consistent records is half the battle. If your bookkeeping isn’t quite up to date, try spot-checking your sales against bank deposits.
For example, since many expenses occur monthly– multiply your rate by twelve to get a rough idea of your total annual cost. You can save and edit your figures in TurboTax, until you’re ready to file by June 15, 2024.
For more tips, check out ways to avoid the stress and inconvenience of an audit.
8. Get help when you need it
If getting your taxes out the door has become a bit of a mad scramble, TurboTax has tax experts standing by to offer immediate relief and support with last-minute filing. That amazing feeling of scratching !!TAXES!! off your to-do list is closer than you think.
Your taxes are done right, any way you choose.
File on your own, with live help, or hand your taxes off to an expert.