How to file your tax return as a sole proprietor  

Becoming a business owner is life changing in so many ways, and taxes are no exception to the wave of change.

Whether you’re filing your business tax return for the first time or you’re used to it, check out this article for the specifics of the process of filing your tax return as a sole proprietor.

The deadline for filing your tax return is different.

Self-employed individuals, including sole proprietors, have until June 15 to file their tax return. This deadline also applies to spouses (if your spouse or de facto spouse is self-employed, you have until June 15 to file your return). Be aware, however, that the payment deadline for any tax balance owing is still April 30 . If you are not too reassured, know that one of our tax experts can help you file your return, thanks to TurboTax live Review-advice .

How do I know if I receive business income?

Not sure if the Canada Revenue Agency (CRA) considers you earn business income or not? Check out the following two blog posts on the TurboTax site to learn more about this:

Are you self-employed?

Whether you have income from several businesses, employment income and business income, or investment or pension income, you include them all in the same return.

All of your business income must be reported using Form T2125 – Statement of Business or Professional Activities.

One of the benefits of running your own business is having access to a wider pool of potential tax deductions. For example, you can deduct the cost of a new printer for your workspace through capital cost allowance (CCA) .

You must enter in the tax return (No. 2042-C-PRO) the amount of your turnover (CA) or your gross annual receipts. This amount will then be automatically reduced when calculating your tax by a lump sum (which varies according to the activity carried out by the company), namely:

This page includes a list of common small business deductions . All of your business expenses and deductions must be reported using Form T2125 and subtracted from your business income to arrive at your net business income or loss.

Did you know that you can  claim the business expense deduction  even before your business is in operation?

Which TurboTax software is best for your business?

Although all TurboTax software allows you to report self-employed income, TurboTax Online Self-Employed is the best choice for preparing and filing your tax return if you are a sole proprietor, a member of a partnership or any other type of self-employed.

And if you feel you need help, TurboTax Live Self-Employed Advice Review offers unlimited tax advice while you do your taxes and a final review before you file your tax return.

References and resources:

Self-Employed Expenses: Track Business and Personal Expenses

Self-Employed Tax Return Guidelines

This lump sum cannot be less than an amount of 305 euros representing your professional expenses.

In the event of mixed activities, the deductions are calculated separately for each fraction of the turnover which corresponds to the activities carried out. In this case, the minimum deduction is €610.

The professional income thus determined is then subject to income tax (application of the progressive scale) with, where applicable, the other income of your tax household.

However, if you meet certain conditions, you can opt for the so-called “payment in discharge” regime for income tax. This option allows this income to be subject to a fixed scale (specified below). It also allows you to pay the tax as you collect your turnover, at the same time as your social charges.