This page will continue to be updated as new information is released. It was last updated on Monday, March 30, 2020 at 3:23pm EST to include information about the drop in bank prime rate.
With ongoing updates and breaking news, we recognize Canadian freelancers may be feeling overwhelmed and unsure of what they should do in these uncertain times. With this in mind, we've created this mini-guide with the goal of ensuring we're keeping Canadian freelancers up-to-date on all resources that would be helpful to them and any information that may affect them.
This is the new deadline for Canadians to file taxes.
Self-employed professionals always had until June 15 to file their taxes, so this shouldn't affect you much. That said, we recommend you file your taxes as soon as you can to avoid the tax-time rush later and even more so if you're expecting a tax refund.
Tuesday, June 30, 2020
This is the new deadline for Canadians to pay GST/HST they've collected.
This extension applies to freelancers who file their GST/HST annually and whose return or instalment are due in March, April or May 2020; those file quarterly and collected sales tax from January 1, 2020 through March 31, 2020 reporting period; and those who file monthly and have to pay the amounts collected for the February, March and April 2020 reporting periods.
Monday, August 31, 2020
This is the new deadline for Canadians to pay their taxes.
Previously, Canadian freelancers had to pay their taxes by April 30th, even though the had until June 15 to file their taxes. With the recent announcement from the Canadian government, Canadians can now delay their payments without penalty or incurring interest until August 31.
To help you keep on top of your CRA commitments this year, we've put together a list of dates that we believe are important for Canadian freelancers like you. View important dates.
This benefit is available to self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance. Application for this benefit will be available in early April. Please note that this is a taxable benefit—it means this benefit would count towards your personal income and you'll need to pay income taxes.
One-time special payment of $400 via GST credit
The Canadian government has proposed a one-time special payment for low- and modest-income families.
This payment of about $400 for single individuals and $600 for couples will be made by early May 2020 through the Goods and Services Tax credit (GSTC). In case you're wondering, you are generally eligible for the GST/HST credit if you are considered a Canadian resident for income tax purposes the month before and at the beginning of the month in which the CRA makes a payment.
Managing your financial commitments
6 month deferral on mortgage payments
Canada’s Big Six banks have introduced mortgage payment deferrals for up to six months.
If you won't be able to pay your mortgage over the next few months, we highly recommend you get in touch with your mortgage provider to work out a solution together. Keep in mind you'll likely experience longer than usual waiting times so be mindful to account for that—maybe wear headphones while you clean up your place or read a book.
Major bank prime rates are at 2.45%
This is the base rate for most credit products such as loans and mortgages and has dropped 1.5% in March.
If you have a variable loan, mortgage of credit card, it will cost you a whole percent less. If you were paying only the prime rate for a variable loan of $10,000, you'll now pay $20.42 in interest per month—a saving of $150 per year. Of course, it's unlikely you're only paying the prime rate but you're certainly saving more now thanks to this rate cut.
Consolidate your debt
If you owe money to multiple creditors, especially with high-interest payments, it may be worth consolidating all (or most) of your debt. Here's how this can be helpful in managing your payments: 1) you're only paying one creditor instead of keeping track of multiple payments, 2) you'll likely pay less interest (especially if you were carrying debt on a credit card), and 3) you can lower your monthly payment amount by setting up a longer term (e.g. pay off the payments in 5 years vs 3 years).
Negotiate your existing financial terms
If you aren't able to consolidate your debt or don't feel it's applicable to your circumstances, you could look into negotiating your existing financial terms.
Given the recent drop in interest rates and the overall financial uncertainty, we suggest speaking with your creditor to see if you can delay your payments (if you're unable to pay) or secure a lower interest rate on any credit products (e.g. variable loan or low-interest credit card). Of course, as with all credit products, it helps when you have a low credit score—you can check your credit score for free with Borrowell.
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