As a self-employed caregiver, you enjoy the flexibility of setting your terms and deciding when and how to provide care. Without direct oversight, you choose your schedule and clientele, offering services to multiple payers simultaneously.
However, this autonomy comes with uncertainties. Job security is minimal, with no guarantee of steady income or severance if the contract ends abruptly. Being outside the payroll system benefits those hiring you, avoiding tax deductions and employment standard obligations.
Yet, risks accompany this freedom. No EI benefits are available if unemployed, and no statutory benefits like sick or holiday pay are provided unless explicitly negotiated. Typically, freelancers charge higher rates to compensate for the lack of employee benefits.
Tax obligations are crucial. Completing a T1 General and T2125 form is mandatory for reporting business income, expenses, and calculating taxable net business income or loss. For earnings exceeding $30,000, GST/HST registration is required.
If you’re a sole proprietor, self-employed or a certain type of partnership, you must fill out your T1 General, that is your standard personal income tax return. You must also complete a separate T2125 “Statement of Business or Professional Activities”. This is where you specify business and professional income earned.
Self-employed caregivers can claim various tax deductions, including home office expenses if the workspace is dedicated to business activities. However, diligent record-keeping and adherence to tax regulations are imperative for a successful self-employment journey.
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