As a sole proprietor or self-employed business owner, you are in charge of your own business. You will face additional taxes and reporting requirements, but you may also be eligible for certain business tax deductions. We assist hundreds of self-employed business owners complete their self-employed tax returns in Toronto.
As a sole proprietor, you are in charge of your own business and to complete your self-employed tax returns in Toronto. As far as the tax code is concerned, you and your business are a single entity. While this entails certain freedoms, it also creates added responsibilities. You will face additional taxes and reporting requirements, but you may also be eligible for certain business tax deductions.
Under current income tax legislation, the business fiscal year-end must be December 31. The self-employed income tax is due by April 30 following the December 31 year end, but the personal income tax return including the proprietorship has a filing deadline of June 15. Quarterly installments for income tax and Canada Pension Plan may be required for the proprietorship.
As a sole proprietor, your self-employed income tax return in Toronto must include financial statements of one or more of the following applicable forms:
Let’s discuss some tax breaks available for self employed individuals when completing their self employed tax returns in Toronto:
If your spouse, kids or other family members performed some tasks for your self-employed business you can justify paying them salary or wages. The amounts you pay must be reasonable for the work completed in order to be deductible against your business income on your self employed tax return in Toronto.
If your home office is your principal place of business, or is used on a regular and continuous basis for meeting clients then you will be entitled to deduct a portion of different types of costs for your self-employed tax return in Toronto. These include expenses such as mortgage interest, property taxes, home insurance, utilities, repairs and maintenance and landscaping, to name a few. You will not be able to create or increase a loss from your business activities when deducting home office expenses on your self-employed tax return Toronto, but you could bring your taxable income down to zero with these expenses. If your home office costs exceed your income then the excess can be carried forward to future years to offset income from the business in the future for your self-employed tax return in Toronto.
When you are self-employed, you are generally entitled to deduct any reasonable costs incurred to earn income from your business for your self-employed personal tax return in Toronto. There are some restrictions on certain expenses, but the list of deductible expenses is long. Do not forget to deduct things such as advertising and promotion, meals and entertainment (generally 50 per cent of these costs are deductible), memberships, subscriptions, licences, office supplies, salaries and wages (including those paid to family members), telephone, vehicle expenses (a portion of gas and oil, insurance, registration, repairs, loan interest, lease costs, automobile club dues, car washes), among other costs. For an expanded list of deductible business expenses to claim on your self-employed tax return in Toronto contact us directly.
With the newly passed bill 145, real estate professionals in Ontario are able to incorporate as of October 1st, 2020. This means that realtors can benefit upon incorporation in ontario, from the substantially reduced corporate income tax rate. If your business has grown in size and profitability and you do not feel a self-employed tax return in Toronto is still the best option, you might want to consider carrying on business through a corporation. A small business corporation is entitled to a low rate of tax on its first $500,000 of active business income (about 15 per cent – but this varies by province). This can make sense particularly where you are able to leave some of your earnings in the corporation without paying it all out to yourself as salary or dividends.
Examples of individuals who may have to file their self-employed personal income tax return in Toronto are:
Contact us directly to learn more about self-employed tax returns in Toronto and how we can assist you with filings. Learn about financial accounting services Toronto.
Working in Real Estate exposes you to many tax and reporting requirements. We understand that it can be challenging to meet these requirements and manage all your business finances. Let us take care of your finances so you can focus on your business. The services we provide allow you to take advantage of the tax benefits available to you. In addition, other accounting services provided support your company for future growth and success. Contact SRJ Chartered Accountants to help you with all your tax and accounting needs.
Whether you are incorporated or self-employed. SRJCA is here to assist with any and all your tax needs. Speak to us on how we can help you build your financial profile.
SRJ Chartered Accountants has two conveniently located offices in the Greater Toronto Area. We are open to meeting clients at either locations, downtown Toronto office or head office in Mississauga. We have developed a team of highly skilled staff who are educated from the most prestigious tax and accounting schools in Canada. If you are looking for accountants or tax professionals specializing in servicing dentists in Toronto then come speak to our professionals at the firm and learn how we can help with all your tax and accounting needs. Learn about accountant for lawyers Toronto.