If you earn business income - freelancing, contracting, running a side business - you must report it on your tax return. Self-employment income is reported on a T2125 form attached to your personal return. Self-employed Canadians can deduct reasonable expenses incurred to earn business income. Common deductions include: advertising, home office expenses, vehicle expenses (business portion), supplies, professional fees, and phone/internet. Self-employed individuals pay both the employee and employer portions of CPP - roughly double what an employee pays. If you expect to owe more than $3,000 in federal tax, CRA may require quarterly tax installments. If your annual business revenue exceeds $30,000, you are required to register for and collect GST/HST.