Self-Employed and Behind on Taxes? Here’s How to Fix It

Self-employment gives people the freedom to run their own business and manage their schedules. However, it also means being responsible for tracking income, expenses, and taxes throughout the year. When bookkeeping falls behind, it can quickly lead to missed tax filings.

I regularly speak with self-employed individuals who intended to file their taxes but never quite got around to organizing their records. Over time, one missed year turns into several.

The process of catching up usually begins with reconstructing the financial activity for each year. This might involve reviewing bank deposits, identifying which payments represent business income, and organizing the expenses that can legitimately be claimed.

For sole proprietors who are registered for GST/HST, we also review whether any GST returns were missed during those years. Those filings must be completed as well in order to bring the account back into compliance.

Once the financial records are organized and the tax returns are prepared properly, the CRA can update the account and calculate the correct balances.

Many people are surprised by how manageable the process becomes once the paperwork is organized and there is a clear plan for resolving the outstanding filings.