Self-Employed Business Tax

Professional Tax Services for Freelancers, Contractors, and Sole Proprietors in Toronto, Scarborough, Markham, Mississauga, Ajax, Oshawa, Oakville, Hamilton and across Canada

If you earn income through freelance work, consulting, gig platforms, or operate a sole proprietorship business in Canada, you’re considered self-employed for tax purposes. That means you are responsible for your own tax reporting, CPP contributions, and expenses, and must file a self-employed business tax return every year.

Our Small Business Tax Accountants specialize in tax preparation and planning for self-employed professionals and small business owners. We ensure full CRA compliance while maximizing deductions and minimizing surprises at tax time.

Who Needs to File a Self-Employed Business Tax Return?

You must file as a self-employed individual if you:

• Run a sole proprietorship or unincorporated business
  
• Work as a freelancer, consultant, professional, or independent contractor
  
• Earn income from commission, side hustles, online platforms (e.g., Uber, Lyft, Etsy, Upwork), or rental activities
  
• Are a tradesperson, therapist, tutor, artist, photographer, or similar service provider
  
• Work under a business name or receive T2125 business income
  

You are responsible for filing a T1 personal tax return, with an attached Form T2125 – Statement of Business or Professional Activities.

Source: CRA – Reporting self-employment income

Our Self-Employed Tax Services Include:

• Preparation and filing of T1 personal tax return with business income
  
• Completion of T2125 – Statement of Business or Professional Activities
  
• Expense categorization, optimization, and documentation
  
• GST/HST registration, collection, and filing (if applicable)
  
• Advice on deductible business expenses (home office, vehicle, supplies, etc.)
  
• CPP contribution calculations and optimization
  
• Tax instalment reminders and payment planning
  
• Recordkeeping setup and best practices
  
• Late filings and CRA correspondence support
  

Filing Deadlines, Tax Rates & Penalties

🔹 Key Deadlines:

• Self-employed individuals: Tax return due June 15, but any balance owing is due by April 30
  
• GST/HST returns: Usually due quarterly or annually, based on your revenue
  

🔹 Tax Rates (2025):

• Federal tax: 15% on first $55,867 (2025 indexed)
  
• Ontario provincial tax: 5.05% on first $51,446
  
• Marginal rates increase with income — combined top rate in Ontario exceeds 53%
  

CRA – Federal & provincial tax rates

🔹 Penalties for Non-Compliance:

• Late filing penalty: 5% of balance owing + 1% per month (up to 12 months)
  
• Interest on unpaid tax: Compounded daily interest starting May 1st
  
• Failure to report income: Up to 10% penalty on unreported amounts
  

Why Choose Us for Self-Employed Business Tax Services?

✅ Years of experience serving freelancers & sole proprietors

✅ Maximize deductions using current CRA rules

✅ Full support for GST/HST registration and filing

✅ Tax planning to reduce instalment burdens

✅ Help navigating CRA audits and reviews

✅ Personalized, year-round support—not just at tax time

Frequently Asked Questions (FAQs)

1. Do I need to file taxes if I only earned a small amount as self-employed?

Yes. Even small amounts of business income must be reported. You may also qualify for credits or refunds, so it’s in your interest to file.

2. What can I deduct as a self-employed individual?

Common deductions include home office costs, business use of vehicle, cell phone, software, advertising, travel, and more. We’ll ensure proper categorization and compliance.

3. Do I need to register for GST/HST?

If your business earns more than $30,000 in gross revenues in a single quarter or over four consecutive quarters, registration is mandatory.

4. Can I split income with my spouse or family?

Income splitting rules for self-employed individuals are limited under the Tax on Split Income (TOSI) rules. We’ll advise you on any allowable opportunities.

5. What happens if I file late or miss the deadline?

You’ll be charged late-filing penalties and interest on any balance owed. We can help you file past returns.

Get Professional Help with Your Self-Employed Tax Return

Avoid costly mistakes and CRA audits. Let our experienced Tax Specialists handle your self-employed tax return from start to finish—accurately and on time.
📧 Email us: info@maqcpa.ca
📞 Call us: (416) 901-4126