![]() ![]() ![]() So be sure to claim all of your eligible costs. ![]() The good news is that you have a wide range of possible expenses you can claim to lower your tax owing by maximizing your tax deductions which will ultimately save you money. There’s no way to avoid paying taxes as a self-employed individual. This means on top of completing your standard personal tax forms, you’re legally required to report your self-employment income and expenses to the Canada Revenue Agency (CRA). Is freelance income taxable?Īs long as you’re providing a service or selling a product with an expectation of profit, you’re considered self-employed. Make sure to take advantage of your RRSP account and business expenses to reduce your tax bill. If you earn $60,000 from your full-time job and $20,000 from your freelance role in a tax year, only the dollars you earn above $75,001 are taxed at 30%. Once you hit a particular tax bracket, each additional dollar you earn gets taxed at the new rate - not your overall income.įor example: Suppose the tax rate for incomes below $75,000 was 25% and the tax rate for $75,001 – $100,000 was 30%. This also increases your taxable income for the year and can put you into a higher tax bracket. If you freelance evenings and weekends while working a nine-to-five, you can easily earn some extra money. What if you’re employed AND an independent contractor?īeing an employee and an independent contractor reveals two very different worlds. You can deduct expenses related to your work such as vehicle expenses, home office costs, supplies, etc.Instead, you may make your own quarterly estimated tax payments. There’s no employer to withhold taxes from your pay.Taxes are withheld from your paycheck each payday.How is being a freelancer different from being an employee for tax purposes?īeing an employee and being self-employed are different in a few keys ways: When you’re an employee ![]()
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