Self-employed
Are you self-employed? We can take care of your tiresome taxes as well as your books.
Our self-employed tax services include:
- Prepare Tax Returns for Sole Proprietors.
- Bookkeeping.
- Prepare Financial Statements.
- Financing (e.g. bank loans).
- Business consulting.
Client Testimonial:
I had a wonderful experience with Madan Chartered Accountant, they are very responsive, accessible any point of time, accountable and the most important they are trust worthy. Well done Madan and keep the customer focus up, this for sure will take you up and forward. - Mike Sa
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I am the owner of my own start up tech company. This will be the first year filing my income taxes. I wanted to know what sort of items am I required to complete before I file.
thanks
Hi Alex,
Before you start filing your company tax return, you should first organize your accounting records as follows:
1. Create a separate file folder for expense receipts for each month (January to December)
2. Attach the receipts (in chronological order) to the associated bank statement or credit card statement
3. Print out all sales invoices and arrange them by date or invoice #
3. Enter sales invoices, bank transactions and credit card transactions into an accounting program, like Wave Accounting. See http://madanca.com/do-it-yourself-bookkeeping/
4. Generate the income statement, balance sheet, and trial balance reports from the accounting program
5. Hire an accountant to prepared the year-end corporate tax return and financial statements
Hi,
I am a self employed individual. I want to know if I need to register for a hst account.
Hi Prince,
If your sales exceed $30000 then yes you will be required to register for a Hst account.
Thanks Allan. I do expect my small business to have over $30,000 in sales this coming year. Can you please provide me instructions on how I can register for HST?
Hi Prince,
You can register your HST account for your small business by:
– Internet at http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bn-ne/bro-ide/menu-eng.html.
– Phone at 1-800-959-5525.
– Mail or Fax by completing form RC1 request for Business Number http://www.cra-arc.gc.ca/E/pbg/tf/rc1/README.html
We do offer theses services at our firm along with HST returns for your sole proprietorship.
I was recently told I needed to set up a business number for my self employed business. I wanted to know how I would go about getting one?
Hi Jan,
You will need to provide the CRA with your name and scoial insurance number. Your self employed business can apply for a business number either by calling 1-800-959-5525 or by mail or by completing form RC1 Request for Business number and sending it to your local CRA office.
Hi,
I am newly self employed and was wondering how I can maximize tax savings this year.
Thanks
Firstly it is beneficial being self employed because of many tax deductions. One of these includes if you have a spouse or family member who has performed some tasks for your business and they can justly be paid for their services. This is helpful for children because they can make income that is not taxable if it is lower than the basic personal credit.A major tax saving can occur by claiming a home office. If you spend about 50% of your time there conducting business or by meeting clients, you can deduct a portion of mortgage interest, property taxes, maintenance and utilities including most expenses made to conduct business.
The last major savings is to incorporate your business either federally or provincially. This has the potential to save much more money than the others because it moves what used to be Self Employment Income (which is taxed 20%- 49%) to Corporate Business Income (which is taxed 15% for the first $500,000 of taxable income).
Hi,
Hello, I am self employed and use a home office. How do I account for this for tax purposes.
Hi Purdip,
You can deduct home expenses if you have a home office and use it primarily to earn business income. If you spend personal time and business time in a portion of the house, calculate the total daily hours to find your daily rate. Then calculate how large the room is in reference to the total house size. By multiplying these numbers you can deduct part of your property taxes, mortgage interest, CCA and maintenance costs such as heat, home insurance, electricity and cleaning materials. You can also carry forward any amount you did not deduct last year. You cannot use these deductions to create a business loss.
Hi,
How do I report my self employed business’s income? I mostly provide sales but perform a few different services.
to report your business and professional income, you should fill out Form T2125 Statement of Business or Professional Activities. Please file another T2125 for each other professional or business income source. Make sure for sales to keep track of the GST and discount charges. If recording sales on this form, make sure you fill out the Cost of Goods Sold section while filling out only the business portion of the costs.
Hello, I just started a business and would like to know how to do my own taxes and any benefits for this? Should I hire an accountant?
Hi Yohan,
One of the best ways to do your own taxes is to get an intuitive tax software like TurboTax which asks questions through a setup wizard. Otherwise, software can only help with what you think is the correct way of doing things and does not take into account incorrect filing strategies or ethics. As a business there are tax benefits to hiring an accountant to do your taxes including profession fee deductions.
I do some consulting for friends and some ebay sales. Do I need to report this under self employed income?
Hi Jacob,
This depends on whether this is considered a commercial activity, if you intend to create profits on these services. This is called the profit test. If you are reselling a product that you once used for personal use or even selling art that has appreciated in value to a neighbour, this is not considered as regular business practice so it is excluded from income. If you intend to make profit or depend on these activities for livelihood while providing this service for many customers, this should be reported on income.
I run a small business but have only reported losses. Ive considered this just to be an expense Should I be considering this as business losses?
Hi Santiago,
Business losses can be just as important as business gains for tax purposes. Business losses are used to reduce other kinds of income. If you expect profits in upcoming years, you can apply these losses to next year’s gain.
Hi I was very happy to come across your blog. I am starting a subcontractor job all paperwork work done. I just have a question how do I start paying my taxes do I call cra or is there a form that I have to full out. I just don’t want to wait for the end of the year and do a full payment.
Hi Johnny,
Thanks for your question. You can pay tax installments through online banking. Your bank can show you how to do this.
“Hi,
I’m an owner operator. How do I go about incorporating my business to minimize taxes? What steps should I take to incorporate?
Thanks!”
Hi Tecain,
”
We can incorporate your business for you. The following steps should be taken.
1. Determine whether you require a federal or provincial corporation
2. Determine the officers directors, and shareholders of the corporation
3. Identify the classes of shares to authorize
4. Perform a search for the availability of the corporation name to be used
5. Identify address information of corporation”
I am seeking an independent contractor opportunity for a US IT firm. All the work will be done by me remotely from here in Canada. Do I need to involve a PEO agency or EOR company or can the US firm directly hire me as independent contractor? What are the tax implications for me?
Hi Nish, the US company can directly engage your services as you are an independent contractor. I recommend that you incorporate a company in Canada, and enter into a B-to-B relationship with your US customer. To avoid US withholding taxes of 30% on payments made by your US customer to your Canadian corporation, complete form W8-BEN-E, and state that you do not have a permanent establishment in the US. All income earned by your Canadian corporation will be taxable in Canada.
hi there, i am a new grad dental hygienist, started a new job recently in June, was paid by hour, was been told I have to do my own tax as I am self-employed? I am so new to this, my mom used to do my tax when i was a student, would you please give me some advice of what to plan for the next tax year? FYI im in Mississauga as well thx
Hi Ray,
It appears that your ’employer’ is treating you as an independent contractor (self-employed). If this is the case, then you will have to fill out form T2125, Statement of Business Income & Expenses and report your total income and relevant business expenses. Attach this form with your Canadian Personal Tax (T1) filing. However, I strongly suggest that you speak with your boss, as you may be an employee, in which case your employer is supposed to deduct payroll taxes from your paychecks and issue a T4 slip to you.
Hi. I am non – resident who would like to register a business in Canada to solely sell on amazon.ca eventually moving to Canada. Need some consultation on going about setting up. Please contact me at 8682759361
Hi Allix,
Thank you for reaching out to me. Most provinces in Canada require that a certain % (e.g. 25%) of the board members of the corporation be residents of Canada. However, the Province of British Columbia (BC) allows for 100% non-resident directors. I can set up a BC corporation for you for a fee of $1,200 + disbursements and taxes. To book an appointment with me, please contact my assistant Navpreet, navpreet@madanca.com
Hello,
Monday I will start a sub-contractor (self employed) Job here in Ontario and I would like an appointment on how to put money aside for my taxes in the upcoming year 2025. Also how much do you charge to do a set employed tax filing
Hi Andy,
The amount of money to set aside for your tax bill depends on your total income for the year. Put aside 30% of your gross income to be on the safe side. In addition, do not spend the HST that you collect. This belongs to the government and should be kept aside on top of the 30%.
My services and fees are as follows:
1.Tax Planning 30-minute session – $140
2.T1 Personal Tax Return – $270
3.Form T2125 (self employment income and expenses) – $385
4.HST Return – $200
5.Disbursements and taxes are extra