If you believe you have all of your expenses covered, we salute you. But today we want to walk you through a couple of small expenses that may not seem like a big deal, but have the potential to change the outcome of your tax return by a couple hundred dollars.

Here are some of the expenses that self-employed people most frequently forget.

If you frequently work on your computer:

Have you been considering those SaaS software tools that you pay for on a monthly basis? These expenses are the easiest to track down. Just take a look at your credit card statement:

  • Cloud servers: Dropbox, Drive, Box…
  • Editing Software: Office 365, Adobe…
  • Communication tools such as Skype or Zoom.
  • The “trendy” ones since Covid-19 have hit such as DocuSign (electronic signing), Asana, Trello (collaborative tools) …

If you are in the artistic field:

Creating music or painting canvases is, without a doubt, more exciting than managing your taxes. But a quick look at this checklist may be worth it, I promise.

  • The expenditures you have each month that are directly related to your art. For example, are you into music? Spotify and Landr are probably a must.
  • List the individuals you worked with and compensated: The dancers for your show? 15% in fees to an agent perhaps?
  • The ones you don’t pay are also worth your attention: Don’t include in your income the customerswho haven’t paid your bill. It would be a shame to pay taxes on an amount you didn’t collect.
  • Courses, workshop and trainings are also deductible: Regardless of whether you have participated in improv workshops or have subscribed to MasterClass, artistic training is valuable to you when it comes to taxes.

If you are driving a vehicle:

The conventional expenses are known to most self-employed workers (gas, insurance, permits, license plate…) but some expenses are worth a little attention.

  • Depreciation: you can deduct 30%/year of the value of your vehicle. The vehicle was purchased a few years ago? No problem, find its value in the CanadianBlackBook.
  • Did you purchase your car using debt financing? Interest is deductible. Make sure you find the total amount of interest paid in the year.
  • Tire and oil replacement, windshield cleaning and maintenance can add up to $500/year. Keeping the receipts can translate to an extra $250 in your pocket.

If you have international customers:

  • Whether you are a freelancer on Upwork, Fiver or other international platforms, be sure to reach out to them to discuss taxes. Indeed, some platforms may withhold a tax on your earnings that cannot be recovered. Avoid paying the same tax twice.
  • If you travel to foreign countries to do business for your clients, beware of taxes and payroll taxes that may reduce your profits. You may have to apply for a certificate of residency from the ARC.
  • If you are on a business trip, ALL your expenses related to these contracts are deductible. This includes hotel, 3 meals/day, cab, airfare… In addition to keeping the invoices, keep track of the exchange rate on the day of transaction. A change of a few points in the rate can mean savings thousands of dollars.

If you are a broker/trader, advisor, financial planner

You’ve certainly experienced the typical situation where you’ve barely had the pleasure of collecting a commission and it’s already gone. But where does the money go?

  • Permits/Licences : OACIQ, real estate board, Centris, affiliation…
  • Sales Incentives: Referral commissions and small gifts offered to customers.
  • If your significant other or overage child is assisting you with paperwork, keep track of his or her hours and tasks and pay him or her, especially if the tax rate is lower than yours.

Any other expenses?

If you are still wondering which expenses are deductible and which are not, ask to yourself: “Is this expense relevant to my business? If the answer is yes, you have a 99% chance that it is deductible.

Are you done with your accounting? Here are some tips for scraping up extra dollars:

  • Quickly go through all your bank and credit card statements for the year and ask yourself the following questions for each transaction:
    • Was this expense used for my freelance activities?
    • Does it appear in my accounting?
  • Take 10 minutes a day, for the next three days, to walk around your house/apartment and check for any missed expenses. You might have forgotten to add up your desk chair and seeing it will trigger an “Aha” in your mind.

Still not sure? Our accountants can provide assistance.

Tax declaration Services for Companies