Are you self-employed? What to know as tax filing deadline approaches

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Canadians who are self-employed must file their 2023 income tax and benefit returns by Monday, June 17.

The official due date is June 15, but the Canada Revenue Agency (CRA) says because it falls on a Saturday, returns filed on or before June 17 will be considered on time.

The CRA issued a press release with details about filing on Wednesday. Here’s what you need to know.

What are your tax obligations as a self-employed individual?

The CRA requires Canadians who earn self-employment income from a business they operate themselves or with a partner to file a tax return each year. Anyone whose spouse or common-law partner is self-employed also must file their tax return by the June 17 date.

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Self-employed business owners must pay personal income tax, Canada Pension Plan contributions and employment insurance premiums, if eligible. Quebec is the only province requiring Quebec Pension Plan contributions.

“Don’t forget to register for a GST/HST account if you make more than $30,000 a year in revenue. You will want to make sure that you file your GST/HST returns on time to avoid any penalties and interest,” the CRA reminds Canadians in its press release.

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New changes to GST/HST electronic filing as of this year now also require GST/HST registrants with a reporting period that begins in 2024 to file their returns electronically.

The CRA also notes that those with incorporated businesses follow different tax filing rules.

“Filing your return will help ensure you receive any benefits you may be entitled to, and that those you already receive are not interrupted,” the agency says.

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When are payments due?

Though the tax-filing deadline for self-employed individuals is June 15, or Monday, the payment was due on April 30.

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“If you still have not paid your taxes, we encourage you to do so as soon as you can to avoid additional interest charges on your balance owing,” the CRA says. Payments can be made online or in person.

The agency also advises Canadians to keep detailed records of any money made and spent in order to accurately determine the tax owed and support any deductions or credits being claimed.

It says having these records on hand will make it easier to support your claims if the CRA decides to review your return for accuracy.

Platform and gig economy worker obligations

The digital era has offered Canadians a vast number of ways to be self-employed, including through platform and gig work.

The CRA defines the platform economy as “income generated on digital platforms like websites or mobile applications.” Examples include selling goods like clothing online and being a social media influencer.

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Canadians are required to report income earned through the platform economy, including gifts and donations.

The gig economy refers to short-term contracts, freelance or other temporary work, which may range from small tasks to highly specialized services.

“If you are connecting with clients through online platforms or applications (apps) such as Clickworker, Crowdsource, Fiverr, UberEats, or Skip the Dishes to provide them with your services, you are typically considered to be self-employed instead of an employee for tax purposes,” the CRA explains.

“Your work may be carried out anywhere, as online platforms can connect businesses and independent contractors from all over the world.”

If you are unsure about whether you are self-employed, more details can be found online.

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