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By Lisa Gittens, Tax Expert at H&R Block
Special to the Financial Independence Hub
With more than half a million Canadians entering the ranks of self-employment each year according to Statistics Canada, the self employed are truly a (work) force to be reckoned with. As such, they should also be reminded their tax return deadline is just around the corner, on June 15th.
If you carried on a business in 2016 [sole proprietorship with a December 31st year-end: see Editor’s Note at the end of this blog], you should file by that date to avoid a late-filing penalty. And although penalties can be avoided if you file on time, it’s important to note that interest will still be charged on any balance due from May 1st 2017.
If you’ve recently joined the ranks of self-employment or have been self-employed for many years, here are a few pointers that can help you file this tax season:
Are you self-employed?
Although most people know if they are self-employed, generally speaking, you fall under this category if you retain control of how and when you do the work, supply your own tools to get the work done and run a financial risk if the venture is unsuccessful. Examples of the self-employed include Uber drivers, freelancers and small-business owners.
Some employers, however, treat their employees as self-employed when they should not be classified as such in order to avoid payroll taxes. If you are unsure of your status, be sure to request a ruling from the Canada Revenue Agency.
When to claim GST/HST
