Legislators have written many lines in the tax code throughout the years to soften the hit of the extra costs taxpayers and the self-employed must shoulder as they continue to run their businesses. Yet despite this, many new self-employed workers don’t use these loopholes because they don’t know about them.
This is why It’s best to do your research starting as a remote worker so that you can take advantage of the assistance available to help lower your tax bill at the end of the year.
If you happen to be someone who recently went into a self-employed career, check out these few taxes write-off tricks.
Who Qualifies?
Even if you only go to the workplace occasionally, you might be able to claim freelancer expenses. To be eligible, the CRA has said that you must have spent a minimum of 50% of your working hours remotely in four consecutive weeks.
These qualifications include both full-time and part-time hours.
Those who do make the cut can deduct a flat rate, or even possibly part of their workspace costs, such as rent, heating, electricity, and in some cases, maintenance.
How Much Can I Deduct?
Generally, depending on the square footage of your workspace, eligible self-employed workers can deduct up to 20% from their business space.
Home Office Deductions
Self-employed workers can deduct their office expenses from their business income if applicable. This includes both individuals who work from home full-time as well as those who do freelancing as a side hustle.
For an insight of all the areas you might be able to deduct as a freelancer, it has been said you can claim the following:
. Heating
. Rent
. Minor repairs
. Mortgage interest
. Cleaning and maintenance
. Electricity
. Home Insurance (only applicable to those who are self-employed, or an employee and work based on commissions)
The CRA recognizes those listed above as legitimate expenses related to either running an at-home business or working out of a home office. A portion of each could be deducted at the end of the year during tax season.
Automobile Expenses
Many don’t realize it, but at-home workers have the opportunity to write off automobile-related expenses.
If applicable, numerous workers can deduct the total time their vehicle was used for business purposes. So, for example, if you had $7000 in total expenses (insurance, maintenance, licensing fees, etc.), you might be able to deduct up to $4000 during tax season.
Don’t Waste Your Savings
Once your taxes are filed for the year and you collect your refunded money, it’s best to be mindful of what you do with those extra savings. As we have learned in the past few years (with pandemics and lockdowns), unpredictability can strain your finances.
If you do happen to receive some money back, you should also consider using those refunds and placing them in a high-interest savings account. It’s a great way to have backup money in the case of emergencies but also has the opportunity to double your money faster than it would in a traditional bank account.
Those looking to start taking control of their investments should explore CapexCPA. This online accounting firm offers some of the best resources and tools to help taxpayers make informed decisions when dealing with their financial needs.
