OTTAWA (ON), June 2, 2022 /CNW/ – The Canada Revenue Agency (CRA) is here to help you and your business meet your tax obligations.
If you are self-employed or your spouse or common-law partner is self-employed, you have until June 15, 2022to file your 2021 income tax and benefit return.
What are my tax obligations as a self-employed person?
If you have earned self-employment income from a business you operate on your own or with a partner, you must report this income by filing a tax return.
When you are self-employed and operating your business, you must pay:
- income tax
- Canada Pension Plan contributions
- Employment Insurance premiums if you are eligible and registered to participate
Reporting your income also means that the CRA will have the most accurate information on file to determine if you qualify for provincial and territorial tax credits and benefits, the GST/HST credit, and the Canada family allowances.
Even if your tax filing deadline is June 15, 2022your payment was due on April 30, 2022. As of April 30, 2022, falling on a Saturday, your payment was considered paid on time if we received it, or if it was processed at a Canadian financial institution, no later than May 2, 2022.
If you still haven’t paid your taxes, we encourage you to do so as soon as possible to avoid additional interest charges on your balance owing. You can pay online in several ways:
- through your financial institution‘s online or telephone banking service;
- using the My payment service. This service allows you to make payments to the CRA with your Visa® Debit, Debit MasterCard® or Interac® Online card from a participating financial institution. You can also access My payment from My Account or the MyCRA mobile web application;
- Use My Account or the MyCRA mobile web app to:
- set up a pre-authorized debit agreement;
- pay an overdue amount or make installment payments;
- make pre-authorized payments from your Canadian checking account to the CRA;
- by credit or debit card, PayPal or Interac e-Transfer, through a third party service provider.
You can also make payments in person. Options include payment:
If you received federal, provincial, or territorial COVID-19 assistance for your business, you must include these amounts in your business income on the last day of the claim period to which it relates, or reduce your expenses by amounts you have received. This includes COVID-19 relief amounts such as:
- Canada Emergency Wage Subsidy (CEWS)
- Canada Emergency Rent Subsidy (CERS)
- Tourism and Hospitality Recovery Program (THRP)
- Hardest-Hit Business Resumption Program (HHBRP)
- Canada Recovery Hire Program (CRHP)
- Local containment program
If you have received a government loan (such as the Canada Business Emergency Account Program (CEBA), the loan is not taxable, but you must include in your business income any portion of the loan that is eligible for forgiveness. The forgivable portion is taxable in the year the loan is received.
If you received CRA-issued benefits in 2021, such as the Canada Recovery Benefit (CRP), Canada Recovery Sickness Benefit (CSSR), and Canada Recovery Caregiver Benefit (CRCB), a T4A information slip should already have been mailed to you. Residents of Quebec should have received a T4A slip and an RL-1 slip.
Government of Canada T4A information slips Canada for COVID-19 benefits are also available online if you are registered with My Account and have full access. To have full access to My Account, you must enter the CRA security code that we issued to you after completing the first step of the registration process.
Information from your T4A information slips, including COVID-19 benefits, is available when you use Auto-fill my return in certified tax software. This service automatically populates portions of an income tax and benefit return with information the CRA has on file. To use the service, you must be registered with My Account and have full access.
When the COVID-19 related benefits were paid, part of the tax was withheld at source. If there is not enough tax deducted at source, you may have to pay taxes. We understand that this payment could present significant financial hardship. Then our extended payment terms might be right for you. This will give you more time and flexibility to repay based on your financial situation. In certain circumstances, you can request relief from penalties and interest and reduce the amount you owe. Go to canada.ca/penalty-interest-waiver for more information.
Filing your tax return may have other effects that are specific to a COVID-19 benefit you received or if you are a resident of Quebec.
Support for farmers
Starting in 2021, the government of Canada proposed a new refundable tax credit, Refund of Fuel Charge Proceeds to the Farmers Tax Credit, as a means of returning some of the fuel charge proceeds from the federal carbon pollution directly to agricultural businesses in provinces that currently do not have a system that meets federal requirements. These designated provinces are alberta, Manitoba, Ontario and Saskatchewan. The amount of the credit is proportional to the amount of eligible farm expenses attributable to the selected provinces. For 2021, if you are a farmer in a selected province and you have eligible farming expenses of $25,000 or more, you can expect to receive a credit of $1.47 by $1,000 of eligible agricultural expenditure increasing to $1.73 in 2022.
The bill that includes this appropriation has not yet received parliamentary approval. We continue to encourage eligible Canadians to claim this credit by completing Form T2043, Refund of Fuel Charge Proceeds to Farmers Tax Credit, and attaching it to their 2021 income tax and benefit return.
Once the legislation receives parliamentary approval, the CRA will process the returns with the refund of fuel charge proceeds to the Farmers Tax Credit.
File your tax return electronically
If you choose to file your return electronically on your own, there are a variety of NETFILE certified software products to meet your needs. Some software products are free.
For the 2021 tax year, before filing your tax return electronically with NETFILE, you will be asked to enter an access code after your name, date of birth, and social insurance number. This unique code can be found to the right, below the Notice Details box on the first page of your previous Notice of Assessment. If you are registered for My Account, you can also use Auto-fill my return in certified tax software to retrieve your NETFILE access code. Your access code will allow you to use information from your 2021 tax return when confirming your identity with the CRA. Your access code is not required when filing your 2021 tax return, but without it, you will have to rely on other information for authentication purposes.
Online services for companies and freelancers
ARC offers easy-to-use digital services for businesses and freelancers. You can use these services to register, make payments and obtain detailed information about your account.
Free tax help for small business owners and the self-employed
If you are a small business owner or self-employed, the CRA offers free liaison services by telephone or videoconference. Liaison officers can make your job easier by helping you understand your tax obligations, answering your questions and making sure you are aware of possible business deductions. For more information, see our Free Tax Help for Small Business Owners and Self-Employed people page.
Keep receipts and documents
It is important to keep complete records of the money you earn and spend. Your records should provide enough detail to determine the tax you owe and support any deductions or credits you are claiming. You must keep all supporting documents for your records.
Sometimes the CRA reviews returns to ensure that income, deductions, and credits are reported correctly. If the CRA reviews your return, having your receipts and records on hand will make it easier for you to deal with your claims.
More help for your business
The Canada Business app simplifies access to government services for small and medium-sized businesses Canada. Designed for business owners, the app puts government programs and services at their fingertips. Download it from the App Store or Google Play.
More Ranking Tips
For more helpful tips and information, check out our self-employed tax tips.
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SOURCE Canada Revenue Agency
For further information: Contacts: Media Relations, Canada Revenue Agency, 613-948-8366, [email protected]