Contracting Work Tax help
 

I am doing some contract work for a company on the side and have a few questions as I'm new to this.

I am just working as "John Smith" doing some welding and labor work. The company pays me by cheque. The rates I bill vary from $25-$100/hour. Total income will only be $5-10k.

I am saving every related receipt and putting it in a folder.

I want everything to be legit

My main questions are:

What do I need to do to cover myself for taxes?

I am using my vehicle and welding supplies for personal and business related.
Should I log every km that I drive for personal vs business?

from every check you got set aside (put into high interest acct) 20% to pay back taxes at the end of the year.

if you use vehicle for business purposes its a good idea to keep a milage log unless you can easily say that 51% of my work required me to use a vehicle to earn the income. milage log (or iphone app) will make it uber easy for you.

you can also use your home office as a deduction. there are provisions for that.



pro tips by:

D & G Consulting
Tax | Accounting | Strategy

I am assuming you are trying to save on your business income. You can save your receipt/expenses because they are tax deductible (although some are only 50%). As a small business owner you are entitled to have a home office. (you find your office sq ft/house sq ft) and use that ratio to reduce any utility bills and property tax.

If I remember correctly, its $0.53 for first 5,000 km and $0.47 km for vehicle reduction. So yes you have to record your kms and find your personal/business km.