Self Employment – What you need to know come tax time.

First of all – are you self-employed, or are you an employee? CRA has a guide for determining your status, click HERE to view it.

As a freelancer or a self employed individual, your take-home pay is going to look a lot different than if you were an employee somewhere. Typically there’s no taxes, pension, employment insurance, or other deductions – and this can pose a problem when it comes time to file taxes.

Even as a freelancer, you are a business owner and with that comes the responsibility to comply with tax law accordingly.  It is your responsibility to track and report all of your income honestly when filing your taxes. But let’s be honest, taxes can be daunting; even more so when there’s not an obvious path to follow to comply. When your income varies so often (as many self-employed individuals’ does), it’s hard to know where to start.

“Financial literacy is a critical skill, [and] that literacy includes an understanding of taxation”(1). One of the best things you can do for yourself as a freelancer, is to invest some time and money into meeting with a financial consultant. They can help with year-round tax-saving strategies, suggest money management approaches, and help you find pertinent deductions to save you money. You might not think of it, but freelancers are entitled to deductions that include a home office, travel expenses,

So whether your work is online, face-to-face, or contracted in an external office here’s three quick tips for managing your taxes year-round:

  1. Take taxes into account when setting prices
  2. Invest in software + training for accounting
  3. Connect with a financial expert to see what deductions are available to you

At Hayter & Associates Inc., we want you and your business to succeed, and not be burdened by surprising tax owings. Our knowledgeable staff can help take all of the stress out of planning for, and paying your taxes. Contact us today to start planning your financial future.

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