The challenge:
You’ve set up business as a consultant or contractor. In your first year, you do well, showing an income of $150,000. How much can you legitimately write off? Are there plenty of deductions and credits?
The experts:
Cleo Hamel, a senior tax analyst at H&R Block in Calgary, says it can be a difficult transition from the simplicity of receiving a yearly T4 to having to gather your tax information yourself.
“When you’re self-employed, you have to get into the record-keeping mindset,” she says. “So the first thing you need to do is establish a means of keeping track of the money that is coming in and the money that is going out.”
Decide how you are going to record your business income and expenses, whether it’s by spreadsheet, accounting software or old-fashioned pen and paper, Ms. Hamel says. Then get in the habit of keeping receipts and recording expenses in the appropriate categories.
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