Take control of your taxes and your cash flow. Learn how proactive tax planning can help you stay compliant, reduce your tax bill, and build long-term financial confidence.
Feb 9, 2026
Being self-employed or working as an independent contractor offers flexibility, autonomy, and control over your income, but it also comes with added tax responsibility. Without an employer handling deductions and remittances, tax planning becomes a critical part of protecting your cash flow and long-term financial health.
At Stoutenberg & Company, we work closely with self-employed individuals, freelancers, and contractors to ensure they’re not paying more tax than necessary while staying fully compliant. Below are practical, effective tax strategies to help you stay organized, reduce your tax bill, and plan with confidence.
One of the biggest mistakes self-employed individuals make is underestimating their tax obligations. Unlike employees, no taxes are withheld from your income throughout the year. This means you’re responsible for:
• Income tax
• Canada Pension Plan (CPP) contributions (both employer and employee portions)
• GST/HST collection and remittance (if applicable)
Knowing what you owe, and when, allows you to plan ahead instead of scrambling at tax time. Setting aside a portion of every payment you receive into a separate tax savings account can help avoid surprises.
Business expenses are one of the most powerful tools available to reduce taxable income. The key is keeping accurate, well-documented records.
Common deductible expenses include:
• Office supplies and software
• Professional fees (accounting, legal, consulting)
• Advertising and marketing
• Vehicle expenses (business use portion)
• Home office expenses
• Internet and phone usage (business use portion)
• Business insurance
A good rule of thumb: if the expense was incurred to earn business income, it may be deductible. However, personal expenses must be carefully allocated to avoid issues with the CRA.
If you work from home, you may be eligible to deduct a portion of household expenses such as:
• Rent or mortgage interest
• Utilities
• Property taxes
• Maintenance and repairs
The deductible amount is based on the percentage of your home used exclusively for business, or regularly for business activities. Proper calculations and documentation are essential to ensure this deduction is defensible if reviewed.
If your revenue exceeds $30,000 in a 12-month period, you’re required to register for GST/HST. Some individuals choose to register voluntarily even below this threshold.
Key considerations include the following:
• Charging the correct tax rate
• Filing returns on time
• Claiming input tax credits (ITCs) on eligible expenses
Poor GST/HST management can quickly lead to penalties and cash flow issues. Strategic planning can ensure remittances are accurate and funds are set aside appropriately.
Incorporating your business can offer tax advantages, but it’s not always the right move for everyone.
Potential benefits include the following:
• Lower corporate tax rates on retained earnings
• Income splitting opportunities (where permitted)
• Enhanced liability protection
• Improved long-term tax planning flexibility
However, incorporation also brings additional costs and compliance requirements. A professional assessment can help determine whether incorporation aligns with your income level, goals, and risk profile.
Self-employed individuals don’t have employer pension plans, but registered accounts can fill that gap.
• RRSPs can reduce taxable income while building retirement savings
• TFSAs offer tax-free growth and flexible access to funds
The right mix depends on your income level, cash flow needs, and long-term objectives. Strategic contributions can significantly reduce your overall tax burden.
If your tax payable exceeds CRA thresholds, you may be required to make quarterly installment payments. While this can feel overwhelming, installments help spread your tax burden throughout the year and reduce the risk of large balances owing.
Proper forecasting ensures installments are accurate, avoiding both underpayment penalties and unnecessary overpayments.
Tax planning for self-employed individuals is not a one-time task; it’s an ongoing process. Having a proactive accounting partner ensures:
• Accurate filings and compliance
• Strategic tax planning throughout the year
• Cash flow clarity
• Fewer surprises at tax time
At Stoutenberg & Company, we take a proactive, personalized approach to tax planning. We help you understand your numbers, identify opportunities, and make informed decisions that support both your business and personal financial goals.
Self-employment doesn’t have to mean tax stress. With the right strategies and professional guidance, you can stay compliant, reduce your tax burden, and build long-term financial confidence.
If you’re self-employed or working as a contractor and want a proactive tax plan tailored to your situation, Stoutenberg & Company is here to help.
Contact us today to book a consultation and take control of your financial future.
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