Self-Employed Tax Returns
T1 personal returns with a complete T2125 business statement for Calgary contractors, freelancers, consultants, and gig workers.
If you earn income without an employer withholding tax for you, the CRA treats you as carrying on a business. Your income and expenses are reported on form T2125, which attaches to your regular T1 personal return. That applies whether you are a journeyman contractor invoicing a general, a consultant with three clients, a rideshare or delivery driver, or someone freelancing on the side of a full time job.
Two things catch self-employed people out. The first is the deadline split: your return is not due until June 15, but any balance owing is due April 30, and the CRA charges interest from May 1 regardless of when you file. The second is CPP. As a self-employed person you pay both the employee and employer share on your net business income, which roughly doubles the CPP cost compared with a salaried job. That amount surprises people in their first year, so we calculate it early and tell you what to set aside.
The deductions available are broader than most people claim, but each has rules. Vehicle costs are prorated by business kilometres and need a log. Home office expenses are prorated by the area used regularly for work. Tools, equipment, and computers are usually capitalized and depreciated rather than expensed in full. Meals are limited to fifty percent. We go through your year, apply what genuinely qualifies, and keep the claim defensible if the CRA asks for support.
What's Included
- T1 personal return with a complete T2125 statement of business activities
- Full expense review covering vehicle, home office, tools, supplies, and subcontractors
- Capital cost allowance on equipment, vehicles, and computers
- CPP on self-employment earnings calculated, plus an instalment plan for next year
- GST registration and filing where your revenue has crossed the threshold
FAQ
I got a T4A instead of a T4. What does that mean?
A T4A generally reports payments made to you as a self-employed contractor rather than as an employee. No tax was withheld, so the income goes on a T2125 and you are responsible for the tax and CPP owing on it. You can also deduct the expenses you incurred to earn it.
Can I write off my vehicle if I use it for work?
You can deduct the business use portion of your vehicle costs, including fuel, insurance, repairs, and capital cost allowance. The CRA expects a log recording business kilometres against total kilometres for the year. Without a log, the claim is difficult to defend on review.
Do I need to pay tax instalments?
Generally yes, once your net tax owing exceeds three thousand dollars in the current year and in either of the two prior years. Instalments are due quarterly. We calculate the amounts with your return so you are not hit with interest for missing them.
Need help with Self-Employed Tax Returns?
Tell A4SB about your accounting needs and we can discuss the support that may be relevant to your situation.