Essential 2024 Tax Filing Tips for Canadian Self-Employed Individuals
Givens LLP | APR 24 2024
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We know that sometimes, tax season can feel like a maze; it’s complicated and can have you running in circles. But with the right map and tools at your disposal (and some direction from your friendly neighbourhood CPAs), even this labyrinth can be solved. Let’s look into some essential tax filing tips for self-employed individuals for 2024:
Self-Employed Tax Items and Deadlines to Keep in Mind
- GST: If you are not yet a GST registrant, but are not an GST Exempt supplier, and your sales are over $30,000 you are required to register for a GST account.
- If you are already a GST registrant, it is mandatory to collect 5% on all sales for GST purposes and will need to file a GST return with your tax return. GST Returns are due to be filed by June 15th however any payable balances are due to be paid by April 30th
- Vehicle Expenses: Do you have vehicle expenses? If so, keep those documents on hand, and remember to use a mileage log so you can claim your eligible expenses, and ensure you have records in the event of a CRA Review. The good news is there are apps you can use for mileage log tracking!
- Other Expenses: Most advertising, promotion, insurance, supplies, meals, and entertainment can all be expensed through your business. Hold on to receipts for the next 7 years, remember to file them to ensure you save wherever possible. Refer to Canada Revenue Agencies detailed guidelines for any expenses in question if eligible or ineligible.
- Residence-Based Claims: Is your primary place of business your home? Utilities, home internet, rent expenses, and more can be claimed To reduce your balance owing. However, the final amount will depend on the square footage of your home and the space you use for work. NOTE: If you are a salaried or commissioned employee view the link below for CRAS up to date details. Tax Deductions
- T1 Deadlines: Be mindful of your self-employed filing deadline.
- Businesses and farmers that are sole proprietors will have different filing deadlines than corporations. The Tax Filing deadline is June 15, 2024. However, any existing tax owing to the CRA must be paid by April 30th, 2024.
Keeping Receipts as a Self-Employed Canadian
Think of your tax return as your business's story – a financial fairytale (hopefully with a happy ending!) To tell this tale effectively, you'll need all the juicy details:
- Receipts: Keep records of all business-related purchases, whether in paper or digital form, and organize them by category. This includes invoices, receipts, and other relevant documentation related to your business, rental property, farm income, and expenses. Invoices are essential for separating your individual income from your T4s (if applicable) since T1s will be taxed separately. Keep them organized by category for easy access for at least next 7 years.
- Business Expenses: Keep track of all expenses related to your business, rental, or farm income. Maintain documentation for tax deductions and other financial purposes. These should be tracked and held onto for seven years.
Leveraging Digital Tax Reporting Tools
Technology and self-employment go hand-in-hand. After all, when running lean, it’s important to have simple and effective tools that let you keep your books tidy while you grow.
The first tool we recommend is online record-keeping and accounting software—especially if it’s mobile. When paired with safety features like 2-factor authentication, a mobile accounting app can help you categorize expenses, track income, and even generate reports on the fly. Some software will also allow you to track mileage as you drive, giving you a to-the-meter record of your vehicle usage for write-off purposes.
Secondly, when it comes to filing time, tax filing services like TurboTax and NETFILE can help you file your business’s tax returns with ease. These services link securely with your government records, giving you a one-click import of data year over year and helping you visualize both T4 and self-employed income simultaneously.
Givens and Your Tax Returns
Feeling overwhelmed? Don't be! The Canada Revenue Agency has a treasure trove of online resources at your fingertips. Their website is brimming with helpful information, guides, and even online filing options to make things a breeze. Or, we’re available for comprehensive tax services, including GST and personal tax return filing.
Remember, you're not alone in this! If you feel like tax season is about to become a full-blown tax disaster, our CPAs at Givens LLP are here to help. We’re ready to navigate the complexities of tax filing, answer all of your questions, and ensure you're maximizing your deductions and credits.
So, take a deep breath, and let's face tax season together! With a bit of planning, organization, and maybe a dash of help from Givens, you'll conquer tax time and get back to doing what you do best—running your business!
