Sole Proprietorship / Self-Employed Services

If you are self-employed, it is essential to be aware of the amount of tax you are required to pay and the forms that you need to submit to the Canada Revenue Agency. To avoid any legal issues, you should maintain a record of all your income, expenses, and tax deductions throughout the year. This will assist you in accurately calculating the taxes you owe and avoiding any missed deadlines. By keeping detailed records, you will be well-equipped to handle tax season. We are always available to assist you in accomplishing this objective.

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Sole Proprietorship/Self Employed Tax Checklist

SOLE PROPRIETOR | SELF-EMPLOYED | RENTAL INCOME CHECKLIST

SOLE PROPRIETORS

As a sole proprietor you report your business income on your personal tax return (T1).You do not need to file a separate tax return for your business income.

All your T-slips as a sole proprietor
Any other source of income
Business income and expenses in detail for the year to be filed.
Invoices and receipt, and details of GST-HST collected and paid

BUSINESS INCOME

Invoices from sales or services
Sales records if any
Accounts receivable at end of fiscal year if on cash basis
Any other source of income, returns and allowances
Business chequing/savings account interest

INVENTORY

Opening inventory total dollar amount
Purchases during year
Ending inventory total dollar amount
Materials and supplies

EXPENSES

Advertising
Meals and entertainment: receipts should have a name of person and the purpose of the meeting/event
Vehicle expenses – fuel, insurance, lease/finance, payments with interest, repairs, maintenance, parking, car washes
Mileage log or kilometers driven for business purposes
Payroll data for employees; statement of account forcurrent source deductions if bookkeeping done by client.
Other employee expenses taxable or tax free
Professional fees – lawyers, accountants, and consultants
Office supplies and expenese
Interest expense – business loans, investments expensesand interest
Business travel expenses
Rent/property tax
Utilities/heat hydro, phone, internet
Accounts payable at end of fiscal year (cash basis)
Business assets and liability Insurance

HOME OFFICE EXPENSES

If you work from home, you may be able to deduct a portion of your home offices expenses. The tax rules differ, depending on whether you file as a sole proprietor or for a corporation.

Example of expenses:

Mortgage interest
Property tax/rent
Utilities – heat/hydro/phone/internet
Home insurance
Home maintenance and repair costs

CAPITAL ASSETS

Capital assets cannot be expensed in the year they were acquired but must be depreciated over time. Records of Purchase and sale for all Assets should be maintained.

Example of Capital assets:

Vehicles used for business
Machinery and equipment
Tools
BUI

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Sole Proprietorship / Self-Employed Services