Self-employed taxes in Ontario: prepare your 2026 return

Start with the records behind your business

If you run a business as a sole proprietor in Ontario, your business income and expenses are generally reported with your personal income-tax return. Preparing that return starts with a reliable account of what you earned, what you spent and which costs belong to the business. GST/HST and income-tax instalments can create separate obligations during the year.

Whether your 2026 activity was a full-time business or work alongside a job, begin by organizing the records. Versa can then discuss the return, any bookkeeping cleanup and the deadlines that apply to your file.

Report the business activity, including a side business

The CRA uses Form T2125, Statement of Business or Professional Activities, to report business or professional income and expenses. A corporation follows a separate tax-return process; this guide focuses on individuals operating outside a corporation.

Create a list of invoices, cash sales, electronic payments and platform activity. Explain any deposits that were transfers between your own accounts, loans or other non-sales transactions. If a platform paid a net amount after fees, keep the statement showing the components so your records can be reconciled.

The CRA's self-employed income guide explains the reporting framework. You may also need to make CPP contributions on self-employment earnings, as explained in the CRA's self-employment income guidance. Plan for the full obligation rather than the income-tax line alone.

Keep the records behind business expenses

The general expense rule permits reasonable current expenses incurred to earn business income, with personal portions excluded. Capital purchases need their own treatment. These distinctions are explained in the CRA's business-expense guidance.

Sort the year's records into practical groups such as supplies, advertising, software, insurance and professional fees. Keep larger equipment purchases identifiable. Where a cost serves both personal and business purposes, provide the basis for the split rather than claiming the full payment automatically.

For vehicle use, gather the trip records, business and total kilometres and related costs. For a workspace at home, record how the space is used and the information supporting any allocation. Ask the preparer to assess the applicable eligibility rules. The common business-expenses guide covers questions to raise about individual categories.

Review GST/HST before the return deadline

The usual small-supplier test uses $30,000 of worldwide taxable supplies before expenses, subject to exclusions and including relevant associated persons, with both a single-quarter test and a test across the previous four or fewer consecutive calendar quarters. It is not simply a profit threshold or a January-to-December revenue total. If the threshold is exceeded in one quarter, charging generally starts with the supply that caused the excess; the multi-quarter test has different timing. The CRA registration guidance explains the calculation, effective dates and exclusions.

There are special cases. Self-employed taxi operators and taxable commercial ride-sharing drivers generally must register even as small suppliers. If you are already registered, check the reporting period assigned to your account and any outstanding returns. Use the existing HST registration guide to prepare questions for your accountant.

Keep HST reporting in a separate part of your calendar. The CRA's GST/HST deadline page distinguishes annual, quarterly and monthly reporting, including the special annual-filer timing for certain sole proprietors.

Plan for tax payments during the year

For Ontario residents, personal instalments may be required when net tax owing is more than $3,000 for the current year and either of the two preceding years. The CRA's current individual instalment guidance gives the tests, dates and calculation options.

If you receive an instalment reminder, bring it to the conversation along with payments already made. When income has changed significantly, discuss the available calculation methods before choosing an amount. Review cash available for income tax, CPP and any GST/HST obligations rather than treating every deposit as money available to spend.

Filing in June does not move the April payment date

Under current recurring rules, eligible self-employed individuals generally file their 2026 personal return by June 15, 2027, but pay the personal income-tax balance by April 30, 2027. The extension has special-case exceptions. These dates are calculated from the current rules; confirm the CRA's year-specific update on its personal filing and payment page.

That timing makes April preparation useful even when your filing date is later. Organizing the business records early helps establish the payment question before the filing deadline arrives. Our tax deadlines guide connects the personal and business calendars.

What to gather for the first preparation meeting

Prior return, latest assessment and any CRA correspondence.

Sales records and statements from payment platforms.

Business bank, credit-card and financing statements.

Receipts, invoices and notes on mixed-use costs.

Equipment purchases and disposal records.

Vehicle and workspace records, where relevant.

GST/HST registration details, returns and payments.

Instalment reminders and payment history.

The last reconciled bookkeeping period and a list of missing records.

Can Versa help if my books are behind?

Discuss bookkeeping cleanup alongside the return. The work needs to reflect the volume of activity, records available and deadline. Confirm which tasks are included before preparation begins.

Does self-employment automatically mean I should incorporate?

The decision depends on the business, how profits are used and your wider circumstances. Read the incorporation guide and raise the question separately from the immediate filing task.

Book a free consultation to discuss your personal-tax return and the business records behind it.