They also administer benefit programs and tax credits, but most Canadians recognize them most for being tax collectors. The CRA ( Canada Revenue Agency ) is responsible for managing tax laws and policies. Unless you’re an accountant, you should seek the support of a registered CPA (Chartered Professional Accountant) like those we have at Hart Accounting Services. If you have a partnership or a sole proprietorship business, you’ll need to record your income and expenses on a T2125 form, which corresponds with your standard T1 personal income tax return.įor independent contractors who have a corporation, you’ll need to file a separate annual Canadian income tax return, which is generally a more expensive process. You can file as an independent contractor in Canada under the following business structures: For example, an independent contractor registered as a sole proprietor will file taxes differently than an incorporated independent contractor. It may come as no surprise to you that filing taxes as an independent contractor isn’t a cut-and-dry situation. We’re here to guide you through everything you need to know about paying taxes as an independent contractor in Canada. If your head is spinning with confusing tax terms, figuring out when to take advantage of tax deductions, and deadlines for payments, rest easy. However, among the many exciting learning curves of becoming an independent contractor, there’s one aspect that nearly everyone dreads-taxes. You can control when you work, how much or little work you want to take on, and where you operate. Being an independent contractor in Canada comes with benefits that traditional jobs don’t typically offer.
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