When you’re self-employed, you’re responsible for remitting your taxes to the government. That includes paying income tax and the Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums that you would normally have deducted from your paycheque if you were an employee.

The CPP’s employee and employer components are both due if you’re self-employed. Fortunately, when you file your taxes, you may deduct the portion that your employer pays. In addition, you’ll be required to pay EI premiums, which are not deductible.

Income tax

You have to pay income tax on your net business income (business income minus business expenses) if you’re self-employed. Every year, you calculate your tax owing and file a personal income tax return.

Canada Pension Plan (CPP) contributions

The CPP’s employee and employer components are both due if you’re self-employed. You are allowed to deduct the employer part of your taxes.

How and When to Remit Taxes

As a self-employed person, you have to remit your income tax, CPP contributions, and EI premiums to the government quarterly. You can make your payments online, by phone, or by mail.

If you don’t make your payments on time, you may be subject to interest and penalties.

Self-employed people must file a personal income tax return every year. The tax return is due on April 30th, but you have until June 15th to file if you’re self-employed.

Tax resources for the self-employed

The Canada Revenue Agency (CRA) has some resources to help self-employed people comply with their tax obligations.

• Self-Employed Individuals Tax Centre – The CRA’s Self-Employed Individuals Tax Centre is a one-stop-shop for information and services for the self-employed.
• Guide T4058 – This guide provides an overview of the tax rules for self-employed people.
• Business and professional income – The CRA’s website includes information on the types of business and professional income that are taxable and deductible expenses.
• Self-employment kit – The self-employment kit includes information on registering your business, keeping records, and filing your tax return.
• Paying your taxes – The CRA’s website includes information on how and when to remit your income tax, CPP contributions, and EI premiums.

Conclusion

If you’re self-employed, you’re responsible for remitting your taxes to the government. That includes paying income tax and the Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums that you would normally have deducted from your paycheque if you were an employee.

Income tax, CPP contributions, and EI premiums are all payable quarterly. Self-employed people must file a personal income tax return every year.

The CRA has several resources to help self-employed people comply with their tax obligations, including the Self-Employed Individuals Tax Centre, Guide T4058, and the self-employment kit.

Contact Tax Eagles for Self-Employed Taxes

If you are self-employed, running your own business, or are a freelancer, contractor, or sole proprietor, you are responsible for paying your taxes. This can be a daunting task, especially if you are new to self-employment.

At Tax Eagles, we are experts in self-employed taxes and can help you navigate the complex world of tax filing and ensure that you are paying the correct amount of taxes. We can help you set up a tax plan that minimizes your tax liability and maximizes your deductions so that you can keep more of your hard-earned money.

Visit www.taxeagles.com for more information or to book a free consultation.