Low-Cost Sole Proprietorship Tax Filing for Self-Employed Canadians

The route depends on the structure. A sole proprietor or partner reports business income on Form T2125 and files it with the personal T1 return; for the 2025 year the self-employed filing deadline was 15 June 2026, while any balance owing was due 30 April 2026. An incorporated business files a separate T2 corporate return for each fiscal year, due six months after that year end, on top of whatever the owner reports personally.

The usual reasons are a return picked for review, a slip or receipt the CRA is still waiting on, a first return or an adjustment, or a paper filing, which runs on a considerably longer standard than the roughly two weeks for an online return. A non-resident return can run to sixteen weeks. Check My Account for the return status and for any letter asking for documents, then answer it promptly, since the file stays open until you do.

For your own tax information, ask for a personal information request through the federal ATIP online portal, or submit the government's request form to the CRA's access to information office. Name the years and the type of record - notices of assessment, audit working papers, collections notes - because a narrow request is answered faster. Check CRA My Account first: slips, notices and account balances are already there at no cost.

Sign in to CRA My Account and check your account balance and your latest notice of assessment: they show tax owing, instalments credited and any refund due. Without online access, call the CRA's individual enquiries line, or ask for the balance in writing. Filing an outstanding return is often what triggers a refund, since credits and benefits are only calculated once the return is assessed.

Line 43500 is your total payable. Add net federal tax from line 42000, your provincial or territorial tax, CPP contributions payable on self-employment and other earnings, any EI premiums on self-employment income, and any social benefits repayment. That total is what you owe before credits for tax already paid; subtracting your total credits gives the refund or balance owing at the end of the return.

Taxation is a government collecting compulsory payments from people and businesses to fund public spending. In Canada that covers income tax on earnings and profits, GST/HST on most goods and services, payroll contributions, and property tax charged by municipalities. Doing your taxes means filing a return that reports your income and claims your deductions and credits, so the amounts already withheld at source or paid by instalment are settled against what you actually owe for the year.

Every business pays tax on its profit, but a business with no profit for the year pays no income tax and may still have to file. A corporation must file a T2 within six months of its fiscal year end even in a loss year. A sole proprietor reports the business on a T2125 inside the personal T1. Losses can often be carried back or forward. Payroll and GST/HST obligations are separate and do not depend on profit.

Take the gross pay for the period, subtract registered pension contributions, union dues and the enhanced portion of your CPP or QPP contributions to reach taxable pay for the period, then apply the tax tables for your pay frequency and reduce the result by the credits from your TD1 forms and by the credit for your base CPP or QPP contributions and EI premiums — those two are withheld alongside the tax rather than taken off the pay the tables are applied to, and a Quebec employee also has QPIP withheld and provincial tax taken under Revenu Québec's own tables. Treat the result as an estimate, since withholding annualises a single pay period and ignores other income, bonuses and deductions. The CRA payroll deductions online calculator reproduces the employer calculation. Your return settles the real figure.

Register for GST/HST once taxable revenue passes $30,000 over four consecutive calendar quarters or within a single quarter, which for 2026 is unchanged. After that you charge tax on your sales, claim input tax credits on business purchases, and remit the difference with your GST/HST return on the reporting period the CRA assigns, monthly, quarterly or annually. Pay online through CRA My Business Account, your bank, or preauthorised debit. Late remittances draw penalties and interest.

Yes. Salary is employment income and fully taxable, and it appears on your T4 with the tax, CPP and EI already withheld. Taxable salary also captures most benefits an employer provides, so a company vehicle, group life insurance premiums or a taxable allowance are added to the slip. A few payroll amounts work the other way and reduce the income you are taxed on, notably registered pension plan contributions and union dues.

Car insurance is deductible only to the extent the vehicle earns income. A self-employed person or a corporation deducts the business-use share of insurance alongside fuel, repairs, licence fees, interest and capital cost allowance, prorated by business kilometres over total kilometres driven in the year. An employee needs the employer to certify that using their own vehicle is a condition of the job. Commuting does not count, and without a kilometre log the CRA can deny the whole claim.

A T4E is the slip Service Canada issues for Employment Insurance and certain related benefits. It shows the total benefits paid, income tax already withheld, any benefits you had to repay and any benefit repayment required because of your income level. Report the amounts on your personal return on the line for Employment Insurance and other benefits, not on the employment income line — EI benefits are taxable but they are not employment income. Keep the slip even where no tax was withheld, because the benefits remain taxable and the CRA already holds a copy.