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As a Canadian consultant, you are considered self-employed and are responsible for reporting and paying your own taxes. This means you will need to file a personal income tax return and report your business income and expenses. You may also need to register for a GST/HST number if your annual revenue exceeds $30,000.
Yes, you can deduct business expenses that are necessary for earning income for your consulting business. This includes expenses such as office supplies, advertising, travel, and home office expenses. It is important to keep detailed records and receipts of all your business expenses for tax purposes.
If you are a Canadian resident, you are required to report and pay taxes on your worldwide income. This means that any income earned outside of Canada, including consulting services provided to clients in other countries, must be reported on your Canadian tax return.
There are several tax breaks available for Canadian consultants, including the small business deduction, which allows you to pay a lower tax rate on the first $500,000 of business income. You may also be eligible for deductions for eligible capital property, which includes computers, software, and other assets used for your business.
You will need to fill out the T2125 form, Statement of Business or Professional Activities, and include it with your personal income tax return. This form will allow you to report your business income and expenses, as well as any applicable deductions and tax credits. It is recommended to seek the help of a tax professional or use tax preparation software to ensure accuracy and maximize your deductions.