Tax advice – Are you self-employed? The Canada Revenue Agency can help you understand your tax obligations

OTTAWA (ON), April 13, 2022 /CNW/ – If you’re self-employed, we understand that navigating your tax obligations can seem complicated. But do not worry ! The Canada Revenue Agency (CRA) is focused on your support. To prepare you for tax filing season, we’ve put together useful tips and information for the self-employed.

The tax 2021-the filing deadline for the self-employed is June 15, 2022
You have until June 15, 2022 file your 2021 income tax return if you or your spouse or common-law partner is self-employed.

The 2021 payment deadline is April 30, 2022
Although your 2021 tax filing deadline is June 15, 2022your payment is still due on April 30, 2022.

Since April 30, 2022 falls on a Saturday, your payment will be considered paid on time if we receive it or if it is processed at a Canadian financial institution, on or before May 2, 2022.

If you have filed your 2020 income tax and benefit return and qualify for interest relief, you have until April 30, 2022 to pay any outstanding income tax debt for the year of 2020 taxation to avoid future interest charges. This applies to tax due for the 2020 tax year only, not any previous tax year.

Even if you owe income tax, don’t risk having your benefits cut off if you don’t file a return. If you can’t pay your balance owing, we can work out a payment arrangement with you.

Liaison officer service

We offer a free liaison agent service for small business owners and freelancers to help them understand their business tax obligations. A visit (by telephone or videoconference) from a Liaison Officer is 100% confidential; the information you choose to discuss with a liaison officer will not be shared with other areas of the CRA or anyone else.

You can request a visit by phone or videoconference here.

Online tools to help you file

Do not waste time ! Sign up for direct deposit and file online to get any refunds you may be entitled to faster and to avoid delays.

Using the CRA’s digital services is the fastest and easiest way to view and manage your tax and benefit information. The CRA also encourages you to register in advance for My Account and My Business Account and gather all of your information to file your return.

The CRA’s Get ready to do your taxes page has information about online filing, deadlines, and other useful links.

COVID-19 Benefits

If you received federal, provincial, or territorial COVID-19 government assistance for your business, you must include these amounts in your business income or reduce your expenses by the amounts you received. This includes COVID-19 relief amounts such as:

  • Canada Emergency Wage Subsidy (CEWS)
  • Canada Emergency Rent Subsidy (CERS)
  • Tourism and Hospitality Recovery Program (THRP)
  • Hardest-Hit Business Resumption Program (HHBRP)
  • Canada Recovery Hire Program (CRHP)
  • Local containment program

If you have received a government loan (such as the Canada Business Emergency Account Program (CEBA), the loan is not taxable, but you must include in your business income any portion of the loan that is eligible for forgiveness.

If you received CRA-issued benefits in 2021, such as the Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CSSR), and Canada Recovery Caregiver Benefit (CRCB), a T4A information slip should have been mailed to you by the end of February 2022. Residents of Quebec should have received a T4A slip and an RL-1 slip.

Government of Canada T4A information slips Canada for COVID-19 benefits are also provided online if you are registered for My Account and have full access. To have full access to My Account, you must enter the CRA security code that we issued to you after you completed the first step of the My Account registration process.

T4A information slips, including information on COVID-19 benefits, are also available when you use Auto-fill my return in certified tax software. This service automatically populates portions of an income tax and benefit return with information the CRA has on file. To use the service, you must be registered with My Account.

If you received a T4A and/or RL-1 slip but did not apply for or receive reinstatement benefits, please contact the CRA as soon as possible by calling 1-800-959-8281.

When the COVID-19 related benefits were paid, part of the tax was withheld at source. If you end up owing more tax on top of that, we understand that paying could present significant financial hardship. Then our extended payment terms might be right for you. This will give you more time and flexibility to repay based on your financial situation. In certain circumstances, you can request relief from penalties and interest and reduce the amount you owe. Go to canada.ca/penalty-interest-waiver for more information.

There may be other effects to filing your return that are specific to the COVID-19 benefits you received, or if you are a resident of Quebec.

Support for farmers

Starting in 2021, the government of Canada proposed a new refundable tax credit, Refund of Fuel Charge Proceeds to the Farmers Tax Credit, as a means of returning some of the fuel charge proceeds from the federal carbon pollution directly to agricultural businesses in provinces that currently do not have a system that meets federal requirements. These designated provinces are alberta, Manitoba, Ontario and Saskatchewan. The amount of the credit is proportional to the amount of eligible farm expenses attributable to the selected provinces. For 2021, if you are a farmer in a selected province with eligible farm expenses of $25,000 or more, you can expect to receive a credit of $1.47 by $1,000 of eligible agricultural expenditure increasing to $1.73 in 2022. Form T2043, Reimbursement of Fuel Charge Proceeds to the Farmers Tax Credit, will need to be completed to calculate the amount of the credit.

The bill that includes this appropriation has not yet received parliamentary approval. We continue to encourage Canadians who are eligible to claim this credit to file their 2021 income tax and benefit returns on time.

Once the legislation receives parliamentary approval, the CRA will process the returns with the refund of fuel charge proceeds to the Farmers Tax Credit.

Payments

If you need to make a payment to the CRA, there are online options that are faster, easier, and more secure than sending a check by mail.

There are several ways to make a payment:

  • using your financial institution’s online or telephone banking services
  • using the CRA pre-authorized debit service offered by My Account and the MyCRA mobile web application, which allows you to:
    • set up a payment to the CRA from an account on a pre-determined date
    • pay an overdue amount or make installment payments
  • through the CRA My payment service, which allows you to make payments online. You can use this service if you have Visa® Debit, MasterCard Debit® or Interac® Online at a participating financial institution
  • by credit card, PayPal or Interac e-Transfer through a third-party service provider

If you still want to pay in person, you can pay:

To see all payment options, go to our Payments to CRA page.

Things to keep in mind:

  • In your return, you must report your income from any business you run yourself or with a partner.
  • In CanadaGenerally, a self-employed person must register for GST/HST if their income (and the income of any associated persons) from worldwide taxable supplies is greater than $30,000 during a calendar quarter or during the last four consecutive calendar quarters.
  • If you own a business or engage in commercial activities, keep complete records. Your records should contain enough information for you to determine the tax you owe and to be able to support your income and expense reports, as well as any deductions or credits you claim. Your records must be supported by original documents. Electronic versions of these documents are acceptable.
  • If you work in the gig economy, find out what you need to know with our gig economy tax tip. The gig economy relies on temporary and freelance work, or on short-term contracts ranging from a small task to a highly specialized service.
  • In case the CRA reviews your return, keep your documents even if you don’t have to attach certain supporting documents to your return or if you are filing online. The CRA may ask you to prove your claims for deductions or credits with documents such as canceled checks or bank statements.
  • Retain supporting documents and all required records for six years from the later of:
    • the end of the tax year to which they relate
    • the date your return was filed (if you did not file your return on time)
  • If you earn income that does not have tax withheld or does not have enough tax withheld during the year, you may have to pay tax in instalments. This can happen if you:
    • have rental, investment or self-employment income
    • receive certain pension payments
    • have income from more than one job

For more information, see our Small business and self-employed income page. You can also view our questions and answers on your tax filing page for more answers to common questions. This page will be updated periodically to incorporate changes that may affect you during tax season.

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SOURCE Canada Revenue Agency

For further information: Media Relations, Canada Revenue Agency, 613-948-8366, [email protected]