Self-employed RSWs incur a number of costs that they can claim on their income tax return. Depending on your business model, services provided, and office location, these general guidelines may apply to you:

  • Be aware of your income tax and GST/HST requirements. There are many resources from the Canadian Revenue Agency that can help, and a professional accountant’s advice when starting up business will go a long way to avoiding tax time headaches and being prepared for an audit.
  • Keep a written or electronic record of expenses and income including any GST/HST that you paid or collected.
  • Keep and organize all receipts and make copies of them to avoid receipts fading and becoming illegible.
  • Deduct any reasonable current expenses incurred to earn business income. This includes costs you may not be thinking of, like a portion of your heating bill, banking fees, using your car to see clients and association fees. The Canada Revenue Agency offers guides to help you interpret the eligible deductions within your specific private practice context.
    • Advertising
    • Allowance on eligible capital property
    • Bad debts
    • Business start-up costs
    • Business tax, fees, licences, dues, memberships, and subscriptions
    • Business-use-of-home expenses
    • Capital cost allowance
    • Current or capital expenses
    • Delivery, freight, and express
    • Insurance
    • Interest
    • Legal, accounting, and other professional fees
    • Maintenance and repairs
    • Management and administration fees
    • Meals and entertainment (allowable part only)
    • Motor vehicle expenses
    • Office expenses
    • Prepaid expenses
    • Property taxes
    • Rent
    • Salaries, wages, and benefits
    • Supplies
    • Telephone and utilities
    • Travel
    • Other expenses

Many small business owners hire a professional accountant, give them all of your receipts and records, and have them complete the income tax return. When hiring an account, be sure to check professional references and asking trusted friends and colleagues to recommend an accountant who specializes in taxes, has good communication skills and provides excellent service to clients of all sizes.

Helpful Links:

Canada

Business or Professional Income Tax Information

Canada

Tax tips for the self-employed