{"id":430,"date":"2014-05-26T09:28:56","date_gmt":"2014-05-26T13:28:56","guid":{"rendered":"http:\/\/minireference.com\/blog\/?p=430"},"modified":"2016-02-09T16:08:02","modified_gmt":"2016-02-09T21:08:02","slug":"filing-taxes-for-self-employed-business-income","status":"publish","type":"post","link":"https:\/\/minireference.com\/blog\/filing-taxes-for-self-employed-business-income\/","title":{"rendered":"Filing taxes for self-employed business income in Qu\u00e9bec"},"content":{"rendered":"<p>When you run your own business as a sole proprietorship, you must fill in two special tax forms when submitting you income tax return. The Canada Revenue Agency&#8217;s form <a href=\"http:\/\/www.cra-arc.gc.ca\/E\/pbg\/tf\/t2125\/README.html\">T2125<\/a> and Revenu Qubebec&#8217;s form <a href=\"http:\/\/www.revenuquebec.ca\/en\/sepf\/formulaires\/tp\/tp-80\/default.aspx\">tp-80<\/a>.<\/p>\n<p>The best place to start are the excellent PDF guides offered by the CRA and Revenu Qu\u00e9bec: <a href=\"http:\/\/www.cra-arc.gc.ca\/E\/pub\/tg\/t4002\/t4002-13e.pdf\">Canada Guide<\/a>,\u00a0<a href=\"http:\/\/www.revenuquebec.ca\/documents\/en\/publications\/in\/in-155-v(2013-10).pdf\">Quebec Guide<\/a>.<\/p>\n<p>Gross income =\u00a0<span style=\"font-size: 13px;\">Sales &#8211;\u00a0<\/span><span style=\"font-size: 13px;\">Cost of goods sold<\/span><\/p>\n<p>Where cost of goods includes:\u00a0<span style=\"font-size: 13px;\">Opening <strong>inventory<\/strong> (raw materials, goods in process, finished goods), \u00a0Net<strong> purchases<\/strong> (not including the cost of merchandise for personal use), <strong>Subcontracting costs,<\/strong> <strong>Direct labour costs,<\/strong>\u00a0and\u00a0<strong>Other costs<\/strong>.<\/span><\/p>\n<p>Next, you can add up all the <strong>E<\/strong><span style=\"font-size: 13px;\"><strong>xpenses relating to your business activities<\/strong>:<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 13px;\">Advertising\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Meal and entertainment expenses (1.25%-2% of sales).\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Bad debts\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Insurance premiums\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Interest\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Business taxes and licences\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Office expenses. (Not including home-office expenses below)<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Supplies <\/span><\/li>\n<li><span style=\"font-size: 13px;\">Legal fees <\/span><\/li>\n<li><span style=\"font-size: 13px;\">Management and administration fees\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Rent\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Maintenance and repairs\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Salaries or wages, benefits and employer contributions.\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Property taxes <\/span><\/li>\n<li><span style=\"font-size: 13px;\">Travel expenses, other than motor-vehicle expenses\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Telephone, electricity, heating and water\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Fuel and oil\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Delivery, freight and messenger services\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Motor-vehicle expenses, excluding capital cost allowance.\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Deduction respecting incorporeal capital property\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Capital cost allowance.\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Terminal loss.<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Other expenses<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 13px;\">Additionally, if you work from home, you can claim <strong>Home office expenses<\/strong>: <\/span><\/p>\n<ul>\n<li><span style=\"font-size: 13px;\">Heating<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Electricity<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Insurance<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Maintenance costs<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Mortgage interest<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Property taxes<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Other expenses (e.g. rent)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 13px;\">You&#8217;re allowed to claim some percentage $r, 0 \\leq r < 1$ of all these amounts proportional ratio of your home that you use for business purpose. Usually $r=0.5$, but it could be more or less depending on how many rooms you use and whether you meet with customers at home.<\/span><\/p>\n<div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>When you run your own business as a sole proprietorship, you must fill in two special tax forms when submitting you income tax return. The Canada Revenue Agency&#8217;s form T2125 and Revenu Qubebec&#8217;s form tp-80. The best place to start are the excellent PDF guides offered by the CRA and Revenu Qu\u00e9bec: Canada Guide,\u00a0Quebec Guide. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-430","post","type-post","status-publish","format-standard","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/posts\/430","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/comments?post=430"}],"version-history":[{"count":1,"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/posts\/430\/revisions"}],"predecessor-version":[{"id":744,"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/posts\/430\/revisions\/744"}],"wp:attachment":[{"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/media?parent=430"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/categories?post=430"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/minireference.com\/blog\/wp-json\/wp\/v2\/tags?post=430"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}