As a skilled tradesperson, improving your craft is no easy feat. Every day, you try hard to be the best and prove your ability. You’re hands-on, dependable, and take pride in your workmanship. You have the qualifications and you have the skills, but do you have the tools when it comes to filing your tax return?
Speaking of tools, if you bought new ones for work this year, you may be able to claim a tradesperson’s tools deduction of up to $500 on your tax return. You may also be eligible for a GST/HST rebate.
If you’re self-employed, you may be able to deduct other reasonable expenses you paid to earn income—including vehicle expenses, supplies needed to complete a job, and office space expenses. Have you converted part of your garage into a workspace for building custom cabinets? When you use part of your home for business, you can deduct a portion of your maintenance costs such as heat, home insurance, electricity, cleaning materials, and more. To find out more, go to www.cra.gc.ca/smallbusiness and select business expenses.
Don’t forget that the deadline to file your income tax and benefit return is generally April 30th. However, if you, or your spouse or common-law partner, is self-employed, the deadline is June 15th. But take note: if you have a balance owing for 2014, you still have to pay it on or before April 30th, 2015.
Employers can benefit too! If your business hires a qualified apprentice working in an approved Red Seal trade, you may qualify to claim the apprenticeship job creation tax credit. This non-refundable investment tax credit is equal to the lesser of $2,000 or 10 percent of the eligible apprentices’ salaries or wages. Don’t need to use the whole credit amount this year? Carry the unused amount back three years or carry it forward up to 20 years! For more information on the Apprenticeship Job Creation Tax Credit and other investment tax credits, go to www.cra.gc.ca.ca/smallbusiness and select investment tax credit.
Filing electronically with NETFILE is easy, secure and allows the Canada Revenue Agency (CRA) to process your return much faster. If you use NETFILE and are expecting a refund, your money can be directly deposited in your account in as little as eight business days (weeks faster than if you filed on paper). For a list of software and web applications, including some that are free for everyone, go to www.netfile.gc.ca/software.
You can deal with many of your tax matters online by using My Account or My Business Account, which are both available at www.cra.gc.ca/electronicservices. Amend your return, track your refund, change your address, and much more, all with a few clicks of a mouse. With so many services available online, it’s easy to stay on top of your tax affairs year-round. You can also choose to receive your notice of assessment online, so you can view your mail when it’s convenient for you.
Even with all of your training and credentials, it’s still important to think with your head. If your clients suggest you do a job “under-the-table” know that by accepting cash and avoiding taxes, you are putting yourself at risk. If you are caught evading taxes, you may face fines, penalties, or even jail time.
Save yourself the trouble—don’t participate in the underground economy. Under-the-table deals undermine the integrity of Canada’s tax system. They deprive the Government of funds for vital programs that benefit all Canadians, including children and seniors. They also provide certain contractors with an unfair, illegal advantage over those who follow Canada’s tax laws. For more about the underground economy, go to www.cra.gc.ca/undergroundeconomy. If you have ever made a mistake or omission and would like to correct your tax affairs, you can find more information about the CRA’s Voluntary Disclosures Program at www.cra.gc.ca/voluntarydisclosures.
To find out more about deductions and tax credits for employed tradespersons, go to www.cra.gc.ca/trades.
You can also stay on top of the latest CRA news or tax tips by following @CanRevAgency on Twitter.