Being your own boss has many perks.
You get to choose what hours you work, what projects you work on, and never have to report to anyone but yourself. The fast-growing On-Demand Economy as changed the game for individuals at all stages of life, and empowered a new generation of income earners to try out a wide range of alternate options.
While the on-demand economy has paved the way for innovation and development, it comes with its own set of complexities in the form of filing taxes. That’s why we’re covering all the information you need to complete your return as a self-employed member of the on-demand economy.
We’ve teamed up with the different partners – such as Uber – to help you get access to the best tools you need to get your taxes done accurately.
The On-Demand Economy
For almost 20 years, the rise of ‘unconventional employment’ has been unprecedented – this includes temporary work and freelancing – and has grown at almost twice as fast as traditional employment. More and more of us are looking for ways to earn additional income, and accepting the risks that come with no guaranteed hours or benefits.
One of the most common examples of working in the on-demand economy is driving as an Uber Partner, but there are other ways people around the country are earning money too. Kutoto, Favour, AskForTask, Kleanr, AirBnB and Date Night are some of the most popular options across Canada.
Income earned through any of these platforms is somewhat the same, with the major differences coming in the form of expenses that you can claim. As an Uber Partner, you can claim gas, rider entertainment, car insurance premiums and cleaning fees as business expenses. We’ve got great articles that go into more detail on our Business Expense Tips for Uber Partners post.
Filing Taxes for the On-Demand Economy
If you earned any income in 2016 from any form of non-traditional employment (where your taxes aren’t deducted at source), you will have to file your return as a self-employed worker. You don’t necessarily have to be a sole proprietor, partnership or incorporated, as some on-demand economy gigs won’t provide income slips or statements.
So whether you’re doing it full time or just as a side hustle, income earned as on-demand economy service provider should be filed. Read up on the best Tax Tips for Freelancers and learn how to claim all the deductions that apply to you.
Low Income Earning
Working for yourself has its fair share of challenges, and often times it doesn’t generate as much as you’d like. After all, the nature of the system is to help supplement additional sources of income. You might find yourself making an annual amount that falls under the low income category. Lucky for you, we’ve covered this in our 4 Tax Tips for Low Income Earners post – it’s a great resource for anyone filing a return and looking to maximize their refund for tax year 2016.
Don’t forget, the tax deadline is April 30th, but since the date falls on a Sunday, the Canada Revenue Agency is accepting returns filed until midnight on May 1st.
Good luck with your taxes!