Tax Time: Frequently Asked Questions

Hello All,

The deadline to file your taxes is speedily approaching - April 30th if you are a regular taxpayer or corporation owner that takes a salary or dividend. (Self employed/small business owners still have some breathing room until June 16th).

For those of you who have done your taxes, you can give yourself a huge pat on the back and enjoy the feeling of being stress free.

For those of us who haven’t (myself included), there’s still time. If you’re planning to file on your own, the weekend is a great opportunity. Simply gather your tax documents (T4s, T5s, RRSPs, medical expenses, donations, etc.), choose your tax software, and find a quiet place to get it done.

In this week’s newsletter, I’m answering some of the questions I’ve received over the past couple of weeks:

Can I claim home office expenses as both an employee and a sole proprietor?

No—you can’t claim the same expenses twice. If you work from home as both a T2200-backed employee and a sole proprietor, you can either claim one or the other (recommended), or allocate your home expenses proportionately between the two—usually based on time or space used. CRA expects a reasonable, consistent method.

I bought a computer in December—can I claim it under the DIEP rules?

Yes. Proprietors and partnerships can now claim 100% CCA on up to $1,500,000 per year of eligible assets acquired after January 1, 2022 and made available for use before 2025. If your computer is used for business and falls under Class 50, you can claim the business-use portion under the Declining Immediate Expensing Property (DIEP) rules.

I drive for Uber. Can I use CRA’s mileage rate instead of tracking actual vehicle expenses?

No. As a self-employed person, CRA requires you to use the actual expense method—including gas, maintenance, insurance, and lease payments—calculated based on your business-use percentage. The per-kilometre allowance is only allowed for employees or corporation owners using their vehicle for business.

Does the lower-income spouse have to claim childcare expenses?

Yes—CRA requires that childcare expenses be claimed by the lower-income spouse, regardless of who paid them. Exceptions apply if the lower-income spouse is a full-time student or has a disability.

In Quebec, either spouse can claim the expenses. The refundable credit is based on your combined family income.

Do I need to download and save every receipt, or can I leave them on the provider’s website?

CRA doesn’t require paper copies, but you should keep your own digital version. If the provider (like OpenAI or Zoom) removes access to your account, you could lose important records. Store receipts in a cloud or folder you control.

What tax software do you recommend for self-employed returns?

I personally use UFile, especially if you're comfortable navigating tax forms. That said, TurboTax is a great option for those looking for more guidance, and I’ve also heard good things about Wealthsimple Tax.

How do I know if something is an office supply or a fixed asset?

Office supplies are small, consumable items like pens, paper, or printer ink. Fixed assets are larger purchases—like laptops or chairs—that last more than a year. If it costs more than a couple of hundred dollars, I usually treat it as a capital asset and claim depreciation (CCA).

Can I deduct expenses I paid with my personal credit card?

Yes—as long as they were for business purposes. Just make sure to record them properly in your bookkeeping and keep the receipts.

I earned only a small amount of self-employment income—do I still have to file the T2125?

Yes. Even small amounts of business income must be reported using Form T2125.

What happens if I miss the April 30th deadline?

If you owe taxes, you’ll be charged a 5% penalty immediately, plus 1% per month (up to 12 months). If you don’t owe anything, there’s no penalty—but your benefit payments could be delayed.

If you're self-employed and completing Form T2125, you have until June 16th to file. However, interest begins accruing on unpaid balances starting May 1st—both with CRA and Revenu Québec.

I registered for GST/HST mid-year—do I charge it on all my income?

No. You only charge GST/HST on income earned after your registration’s effective date. Anything earned before that date isn’t taxable—even if you invoice it later.

Can I deduct meals with clients?

Yes—if there’s a valid business purpose, such as meeting or networking. Only 50% of the cost is deductible. Be sure to track the who, when, and why in case CRA asks.

If you're feeling overwhelmed, you're not alone. Tax season can be stressful—but once you're done, the sense of relief can be deeply gratifying. Use the anticipation of relief to help motivate you to get it done and if you're feeling exceptionally ambitious start to implement processes for next year to make it easier. (If you are interested in a post about this simly reply with "processes" and I will do a newsletter about that)

As always, I’d love to hear your thoughts. Feel free to hit reply to this newsletter—I read every response.

Ronika

New Content (QBO and TAx)

Article: MORE Tax Time Frequently Asked Questions (from last year)

Video: How to reconcile your sales per your profit and loss to your sales tax report in QBO

Video: How to enter (corporate) income taxes in QBO (including chart of accounts, payments, refunds and reporting)

Video: 5 Things To Know Before Filing Your Self-Employed Taxes

Video: How to file your GST/HST return via CRA

Video: For those in Quebec, how to file your GST/QST return via Revenue Quebec Clic Sequr (my account for business)

Video Playlist: Help with your Small Business/Self Employed Taxes