Life / Money

From claiming a side hustle to deducting lunch — here’s how to prep your taxes

We asked Jessica Moorhouse, a personal finance expert and host of the Mo’ Money Podcast, for her top tips to calm your nerves.

If you’re self-employed, or work in the informal cash economy, the costs of running your business are tax-deductible.

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If you’re self-employed, or work in the informal cash economy, the costs of running your business are tax-deductible.

With so many people cobbling together their income from different sources, filing a tax return is more daunting than ever.

We asked Jessica Moorhouse, a personal finance expert and host of the Mo’ Money Podcast, for her top tips to calm your nerves.

Go in prepared
“The biggest issue is that people get stressed out because they don’t know what they need to start,” Moorhouse said. Get all the documents you need together before you begin (many checklists are available online). Then figure out how you want to file. For younger people, Moorhouse suggests using an online tool such as UFile, TurboTax, or H&R Block’s free program.

“It’s way less intimidating than talking to a tax specialist,” she said. “The tools are intuitive now. You kind of learn about taxes as you’re doing them.” And she said to get started well before the April 30 deadline, in case it takes longer than you expect. Plus, if you’re getting a refund, the sooner you file, the sooner you get your money. 

Claim your side hustle
Moorhouse said to resist temptation to overlook your “under-the-table” income when tax season rolls around. You should be keeping records throughout the year of every time you’re paid, but if you didn’t, you can go online and look at the deposits into your bank account. Babysitting, dog walking, cash tips from bartending — all of that counts. If you receive cash help from parents, family or friends, it doesn’t count as income: it’s a gift and not taxable. 

Deduct, deduct, deduct
“This is my favourite part of taxes,” Moorhouse gushed. If you’re self-employed like she is, or work in the informal cash economy, the costs of running your business are tax-deductible. “I keep every single receipt. If I go to lunch with another blogger to talk about collaborating, I can claim that as a business lunch, minus alcohol,” she said.

Equipment, software — even things like desk chairs and work boots — can all be deducted. If you’re using your home as an office, you can claim part of your rent and utilities. It’s a common misconception that you need to register or incorporate as a business in order to claim expenses as a deduction — you don’t, as long as you’re operating under your own name. Some other useful deductions: Student loan interest, child-care costs, educational courses if they relate to your job, transit passes and anything you gave to charity.

Handle your housing
Many millennials share their digs with others to save on rising rent costs. For example, if you pay $1,000 in rent but your roommate pays $500 for your spare room, you don’t have to claim that as rental income — you’re not the landlord. But if you’re renting out that second room on Airbnb or another room-sharing service, it’s a different story. Depending on your situation, it could be considered rental income or a home business.

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