If you started driving a ride-share this year, it might be the first time you have been your own boss – setting your own hours and making countless decisions to improve the performance of your business. It also might be the first time you have had to report self-employment income on your income tax return.
TurboTax Self-Employed helps you file your personal and business taxes together, while providing extra guidance through self-employment income and deductions.
Filing Taxes with TurboTax, as a Ride Share Partner
Independent contractors, are generally required to file their tax returns as self-employed which means that along with whatever you are usually reporting, you’ll also need to report your income and expenses related to your ride-share job.
If you are self-employed, you will not be receiving a T4 slip from your ride-share partners, so don’t wait for it. Not receiving a T4 also means that deductions for CPP, EI, or income tax have not been subtracted from your income. The tax due to the government, as well as the CPP is calculated by TurboTax and is based on the amounts reported on your income tax return.
The CRA still requires one tax return as year end, and that return reports your income from all sources, including employment income (T4) and any self-employment income which is reported on the T2125 Statement of Business or Professional Activities. The T2125 requires that you input information from your ride-share partner as well as any eligible related expenses which are reduced from your self-employed income to determine your net income as a ride-share driver.
Canadian Pension Plan Contributions
Based on the CRA tax guidelines, self-employed taxpayers are also responsible for their own CPP contributions. Generally, if you earn over $3,500/year in net income from your self-employment, you’ll likely have CPP premiums due. The exact amount of CPP premiums due is based on your net income and calculated on the Schedule 8.
TurboTax Self-Employed makes completing your self-employed return easy. Just answer simple questions about your life and TurboTax combs through over 400 possible deductions and credits. With step-by-step guidance through the Business Expert Interview, recording your business income and expenses is a breeze. No tax knowledge or appointment required.
TurboTax allows you to claim the maximum deduction possible, or reduce your taxes owing, so that you can keep more of your hard-earned money in your pocket.