Millennials who maintain a side-hustle, you should know that tax season is a little different for you than for Canadians who only have a salaried job.
Like so many other Millennials, I maintain full-time employment and have a side hustle for extra cash flow. I have an HST number for when I file freelance invoices from my freelance gigs, and then head to work where I’m on a salary. Three years ago, I was surprised to receive a bill from Revenue Canada to the tune of $4000.
It’s emotionally distressing to owe the government money when you don’t understand taxes — what marginal tax rates are, what the social benefits are to taxes, what the relation of taxes to RRSPs are — and many people just shut down and turn a blind eye to filing their taxes, and leave their CRA bills unopened.
I was terrified of my huge bill but I was also didn’t want to turn a blind eye to my charges for two reasons: Because if you don’t pay your bill to the CRA you get charged insane penalties, and because I was positive I didn’t owe the government that much money. My income wasn’t high enough to owe $4000 in income tax, I figured I must have filed incorrectly.
Let me be clear: it is not a smart strategy to ignore your taxes or the Canada Revenue agency.
My solution was to contact a family friend who was an accountant. We spent two years (two years!!) reviewing and re-filing my taxes and the entire bill was ultimately eliminated and the sunshine and rainbows came out to greet me.
Here’s the thing: No kidding I don’t know how to file taxes — I’m a writer. There’s no prospect more daunting to me than personal accounting, and filing my taxes is the apex of confusion for a brain like mine. Sure, I could file for $40 with a software program but I would definitely miss a ton of potential deductions. Asking a family accountant friend to help me is a favour you can only call in once so, this year I needed to find a tax solution that was more affordable than a personal accountant, and more thorough and effective than filing my own through software.
My solution was to go to H&R Block on my lunch break and I can’t say enough positive things about my experience. Not only are my taxes officially filed to the CRA early (I never thought I would say that!), I actually got a return despite making a higher salary than I ever have. My incredible H&R Block accountant, Christopher Raphael, was able to find deductions I wouldn’t have known about.
For example, when you have a side hustle you can deduct up to 50% of your mobile phone bill. You can deduct a portion of the cost to host your website, and the cost of your domain. You can also deduct a percentage of your monthly rent, if your apartment doubles as an office, and meals (minus the bottle of wine). You can also deduct a portion of the bill for any continuing education course you take through the year. Did you learn how to code this year? Or attend a conference that relates to your side hustle? You can deduct that.
I wouldn’t have known what I could deduct, or the percentage of each expense I could deduct unless I went to H&R Block.
After only two hours with Christopher Raphael at H&R Block, versus two years with my family accountant friend, my T4 and my HST return were filed. IN MARCH. I walked out of my appointment with a spring in my step and a smile on my face.
Not filing your taxes, or ignoring the CRA bill in the mail, is not the smartest strategy if you want to achieve balance in your life. Millennials with a side hustle who DO know a thing or two about taxes can file online with H&R Block, starting at free. For those who don’t, it’s worth a short time investment to get your T4 and HST return filed early for peace of mind.
When you don’t have to worry about your taxes, you can focus on your job and your side hustle, which is what we all really want to do.