by Silva
(Okanagan)
Hi Lake Girl,
I have been nudged into temporary self-employment as the result of having been laid off from a long-time job earlier this year. I found freelance work right away, and the employer intends to take me on full time in a few months.
In the meantime, however, because I am not on the payroll (I invoice for the work, and tax and CPP are not being deducted at source), CRA considers me to be self-employed.
In all likelihood, my self-employment stint will last about four months. I do not intend to continue with "the business" once a staff position becomes available.
1. What should I be doing to prepare for my 2011 tax return, and what are my options come tax time?
2. Am I required to declare myself a sole proprietor for these few months or can I just declare the earnings as additional income and be prepared to pay the tax and CPP?
3. Are there benefits to short-term self-employment such as this? I work from a home office and have been using my personal computer and office equipment, so very few additional costs have been incurred.
Thanks very much for any advice!
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