Top tax tips for freelancers and contractors

Top Tax Planning Tips for Freelancers and Contractors 💸💰

Are you a freelancer or contractor looking to optimize your tax strategy? 🧐🤔

In this video, we'll dive into the top tax-saving tips to help you keep more of your hard-earned cash. 💰🤑

1. Defining Freelancers 💼💻
- Who qualifies as a freelancer or contractor?
- Understanding the difference between employees and self-employed individuals.

2. Common Deductions 🧾📝
- Eligible business expenses: home office, travel, meals, etc.
- Tracking and organizing your expenses for maximum deductions.

3. HST/GST Registration 🇨🇦 GST/HST number explained 💸
- When and how to register for HST/GST.
- The benefits and implications of HST/GST registration.

4. Importance of Incorporating 🏢🛡️
- Pros and cons of incorporating your freelance business.
- Liability protection, tax savings, and professional image.

5. Life Insurance 👨‍👩‍👧‍👦
- Why life insurance is crucial for freelancers and contractors.
- Types of life insurance and how to choose the right one.

6. Maternity Leave Planning 🤰🤱
- Tax implications of maternity leave for self-employed individuals.
- Strategies to plan for maternity leave and minimize financial impact.

Conclusion
By following these tax planning tips, you can maximize your deductions, minimize your tax liability, and secure your financial future as a freelancer or contractor. 💪💰

#TaxPlanning #Freelancers #Contractors #Deductions #HST/GST #Incorporation #LifeInsurance #MaternityLeave #MoneySaving 💸💰💼💻🇨🇦🏢🛡️👨‍👩‍👧‍👦 #️⃣

1. Subscribe to my YouTube Channel: Real Estate and Taxes with Lakshay

2. Tax planning tips for freelancers and contractors By Lakshay Gandhi CPA, CGA [email protected] [phone]

3. Agenda Defining Freelancers Common deductions HST/GST Registration Importance of incorporating Life insurance Maternity leave planning Conclusion

4. Self employed person test Does the worker or payer has control over the worker’s activities? Does the worker or payer provide tools and equipment ? Does the worker take financial risk (investment and management)? Does the worker hire subcontractors ?

5. Employees vs Freelancers When you’re an employee When you’re self-employed You get a T4 Slip No taxes withheld; instead you make your own quarterly tax payments Taxes are withheld from your paycheck each payday You can deduct expenses related to your work such as vehicle expenses, home office costs, supplies, etc

6. Common freelance professions include: Photography, and video editing Ride hailing services like uber and skip the dishes IT Consulting Social media management

7. List of deductible expenses Marketing costs like your website, print and digital ads, or SEO maintenance Equipment like a laptop, camera, or microphone Software subscriptions Your cellphone, mobile plan, and internet bill Travel, meals, and entertainment costs related to your business, such as taking a client out for dinner Training and professional development Business insurance, legal fees, and accounting costs.

8. Checklist of some deductions that a freelancer can be eligible for Car mileage for business use Travel costs Health insurance premiums Home office expenses, including Internet costs and office supplies

9. HST/GST Registration If earnings > $30,000 a year, then you need to register for Harmonized Sales Tax (HST) in Ontario. HST/GST Input Tax Credits HST registration makes you qualified for claiming Input Tax Credits (ITCs.) Through this you can create the HST that you owe, and as an outcome, you can manage the tax properly.

10. Setup corporations The most obvious example is that the tax rate for small businesses (9% to 13%) is considerably less than the personal tax rate for individuals (which may be closer to 50%). Tax and legal liability protection Beneficial at the time to sale LCGE

11. Get the right insurance Insurance is critical for self-employed Canadians since they don’t get coverage through an employer. Consider personal health insurance for benefits like eyeglasses, dental care and prescription drugs. Disability insurance, meanwhile, can replace part of your income if you lose your ability to work.

12. Planning to take maternity leave? Open an account of Service Canada Must contribute to EI (employment insurance) minimum 12 months before going on maternity leave $668 weekly maximum benefit for 40 weeks Maximum EI Premiums is $1,049.12 for 2024

13. Conclusion Maintain proper records -- new computer or paying for a quick client lunch, you must keep the appropriate receipts Setting aside money to cover taxes -- Make quarterly tax payments Penalties - If you file your tax return after June 15th , as a self-employed freelancer, the CRA charges a late-filing penalty. This penalty is 5% of your tax balance plus an additional 1% for each month you file after the due date, capped at a maximum of 12 months. Retirement planning – CPP isn’t enough – meet with your financial advisor

14. Thanks for listening! Any questions? Subscribe to my YouTube Channel: Real Estate and Taxes with Lakshay