In 2025, more Canadians than ever are choosing self-employment — whether as freelancers, contractors, or small business owners. This path offers freedom, flexibility, and creative control, but it also comes with unique financial responsibilities. Understanding how taxes work for self-employed individuals is key to long-term success and peace of mind.
- You Are Your Own Employer — Know What That Means
When you’re self-employed, you’re responsible for tracking income, filing taxes, and covering contributions like CPP (Canada Pension Plan) yourself. There’s no payroll department to handle this for you, so it’s important to plan ahead for what you’ll owe.
- Business Expenses Can Lower Your Tax Bill
The CRA allows self-employed individuals to deduct legitimate business expenses — but only if properly documented. This can include home office costs, business travel, internet and phone bills, advertising, software, supplies, and more. Understanding what’s deductible (and what’s not) can save you thousands annually.
- Keep Impeccable Records Year-Round
Tax season should never come as a surprise. Staying organized throughout the year — keeping digital receipts, tracking mileage, and categorizing expenses — will make filing easier and reduce the risk of errors or audits.
- Consider GST/HST Registration Early
Once your revenue exceeds $30,000 in a 12-month period, you must register for GST/HST. Even before you hit that threshold, registering voluntarily can help you claim input tax credits on business purchases and show a more professional front.
- Tax Planning Should Be Ongoing
Many self-employed Canadians make the mistake of thinking about taxes only once a year. But income may fluctuate from season to season, so your tax strategy should be flexible and reviewed often. You may benefit from incorporating, setting up a holding company, or exploring income-splitting options — depending on your situation.
- A Professional Review Can Uncover Hidden Opportunities
At MrTaxes.ca, we specialize in helping self-employed Canadians optimize their tax situation. Our expert team can:
- Review past tax returns to recover missed deductions (up to 10 years back)
- Offer proactive advice to reduce what you owe in the future
- Help structure your business for maximum tax efficiency
- Financial Freedom Starts with a Plan
Being self-employed should bring freedom — not financial stress. The right systems, support, and strategies can make all the difference. With MrTaxes.ca by your side, you can spend less time worrying about taxes and more time growing your business.
Need help navigating your self-employment finances in 2025? Visit MrTaxes.ca and book your free review today.