Self-Employed Tax Filing for June 15

Written by Julie McMahon. Posted in Canadian Tax

Self-employed Canadians Tax Filing for June 15

The tax deadline is coming up for self-employed Canadians and their spouses.

Self-employed Canadians and their spouses get a little extra time to file their tax returns, but with the deadline of June 15 coming up you may still be looking for some answers. Here are some common questions we receive about filing a self-employed tax return:

• Am I really self employed? Self-employment is determined by the amount of control you have over your work. If you are in any doubt about your relationship, you can request a ruling from the Canada Revenue Agency using Form CPT1, Request for a Ruling as to the Status of a Worker under the Canada Pension Plan and/or the Employment Insurance Act.

• What is the per kilometer rate I can claim? Unless you have already submitted a logbook to the CRA for a previous year, you cannot use a simplified method to calculate your auto expenses. You need to have a detailed logbook for the year to report your expenses correctly. Without a logbook, the CRA may deny your claim.

• Can I write off my mortgage? The answer is no. Self-employed Canadians are allowed to claim a portion of their mortgage interest based on the amount of space used for the business in their home. Mortgage principal is not a deduction.

• Can I use credit card statements instead of receipts? No. The CRA will want to see a receipt with a breakdown of the cost and taxes paid. Self-employed Canadians are more likely to be audited, so make sure you keep your receipts and other documentation to support your business expenses.

• Can I claim my home phone? If you only have one phone line into your home, you cannot claim 100 percent of the expenses for your business. The CRA will expect you to have some personal use, so you will need to calculate the percentage used for business and personal. The same applies to your internet connection.

If you owe money, the CRA starts charging interest on May 1. If you miss the June 15 filing deadline, you will be assessed the five per cent late filing penalty plus interest on the outstanding amount.

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