Economical Sole Proprietorship Registration for Self-Employed Canadians

A small business corporation pays the federal small business rate of 9% on its first $500,000 of active business income for 2026, plus the small business rate of the province where it has a permanent establishment. Above that limit, or once the small business deduction has been ground down, the federal general net rate of 15% for 2026 applies. An unincorporated business works differently: the profit goes on the owner's personal return and is taxed at personal marginal rates.

A write-off is simply a deductible expense. You subtract it from the income it helped earn, so the saving equals the expense multiplied by your marginal tax rate, not the full amount spent. To qualify, the cost must be incurred to earn business or employment income, be reasonable in amount, and be backed by a receipt. Purely personal costs never qualify, and mixed-use items such as a vehicle or a home office are split by business-use proportion.

Scholarships, fellowships and bursaries are reported on a T4A, yet most students pay no tax on them. A full-time student in a qualifying programme who is eligible to claim the education amount is generally exempt on amounts received for that programme. Part-time students get a limited exemption tied to tuition and required materials. Amounts paid for services performed, such as a paid assistantship, or received as a research grant are treated differently and can be taxable.

Every current and past federal form, plus the full income tax and benefit package for your province, sits on the CRA pages at canada.ca, free to download and print. Signed-in users can also see the slips filed under their SIN, such as T4 and T5 information, inside CRA My Account. The CRA will mail a printed package on request by phone. Certified tax software fills the forms for you, so most filers never open a blank one.

Start with the basic personal amount, which is already printed on the form, then add only the credits you genuinely expect to claim, such as tuition you will pay this year, an eligible dependant, the age amount or an amount transferred from a spouse. Total them, sign and date, and give the form to your employer rather than the CRA. With two jobs, claim the amounts at one only. You can also ask for extra tax to be withheld.

For personal income tax, your account number is your social insurance number. For a business it is the nine-digit business number plus the two-letter program identifier and four-digit reference, so corporation tax, GST/HST and payroll each have their own account. Select the matching payment type and the correct tax year or period as well: a payment posted to the wrong program or year leaves the balance you meant to clear still outstanding and still accruing interest.

Both federal and provincial tax apply, and the rates are graduated rather than flat. For 2026 the lowest federal bracket is taxed at 14%, and the federal basic personal amount of $16,452 shelters the first slice of income, so tax on $49,000 works out well below 14% of the whole amount. Your province adds its own bracket and credits, and CPP and EI also come off employment pay. Use the CRA's payroll deductions calculator.

Sign in to My Account or My Business Account, open your profile and edit the telephone number there; the change applies immediately. Without online access, call the individual or business enquiries line and verify your identity, or send the change in writing to your tax centre. Keep the number current, because the CRA uses it for identity verification, multi-factor sign-in codes and contact about assessments, so a stale number can lock you out.

You must register for GST/HST and charge it once you stop qualifying as a small supplier. For 2026 the small-supplier threshold is $30,000 of taxable revenue, measured over four consecutive calendar quarters or in a single quarter. Under the four-quarter test you stay a small supplier until the end of the month following the quarter in which the trailing four-quarter total was exceeded; you must then apply to register before the day that is 30 days after the first taxable supply you make once that grace month ends, and registration takes effect on that day. Under the single-quarter test small-supplier status ends immediately on the sale that crosses $30,000, and that sale itself must carry tax. Below the threshold you may register voluntarily to recover input tax credits on your purchases.

Tax applies to profit rather than revenue: total sales less the expenses the CRA allows you to deduct. If the business is unincorporated, that profit is added to your other personal income and taxed at your marginal rate. If it is incorporated, the corporation pays tax on its own profit, at the small business rate on active business income up to the federal $500,000 business limit for 2026, and how you take money out decides the personal layer: a salary is deductible to the corporation, so it is taxed once in your hands, while a dividend comes out of already-taxed corporate profit and is taxed again personally at dividend rates.

GST at 5% applies to newspapers across Canada, because they are not zero-rated. Ontario gives a point-of-sale rebate for the provincial part of the HST on printed newspapers, so an Ontario purchase is effectively taxed at 5% rather than 13%. Digital subscriptions are taxable and the rebate does not reach them. A personal credit for digital news subscriptions existed for certain tax years, so check the CRA page for the years it covers before claiming it.

No. Where you give your spouse funds and they contribute to their own TFSA, the income and growth inside that plan are tax free and nothing is attributed back to you. There is no spousal TFSA, so the contribution uses your spouse's own room and the account belongs to them. Attribution can still apply later: once the money is withdrawn and invested in a non-registered account, income earned on it may be attributed to you.