Are you a Canadian freelancer or sole proprietor wondering how to properly report GST/HST on your tax return? This 2025 guide breaks down the steps, forms, registration rules, and deductions you need to understand to stay compliant and maximize tax savings.
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🧾 What Is GST/HST?
The Goods and Services Tax (GST) and the Harmonized Sales Tax (HST) are federal and provincial consumption taxes. If you’re a freelancer, consultant, or sole proprietor, you may need to charge and collect these taxes when billing clients.
📌 Who Needs to Register for GST/HST?
You must register for a GST/HST account if your business earns $30,000 or more in gross revenue in any single calendar quarter or in four consecutive quarters. Voluntary registration is also allowed below this threshold.
🗂️ How to Register for a GST/HST Number
You can register through:
- CRA’s Business Registration Online (BRO)
- By calling 1-800-959-5525
- By mail using Form RC1
📥 Charging GST/HST to Clients
Once registered, you must include GST/HST on all applicable invoices. The rate depends on the province:
- 5% GST – AB, BC, MB, NT, NU, QC, SK, YT
- 13% HST – ON
- 15% HST – NB, NL, NS, PE
💡 Tip: Always mention your GST/HST number on the invoice.
🧾 How to File a GST/HST Return
As a sole proprietor, you can file:
- Online via GST/HST NETFILE
- Using tax software (if authorized)
- By mail using Form GST34-2
📋 Reporting GST/HST on Your Tax Return
When filing your personal tax return as a sole proprietor, report your business income and GST/HST collected on Form T2125 – Statement of Business or Professional Activities.
Be sure to:
- Report all sales including GST/HST
- Exclude GST/HST from your net income calculation
- Claim input tax credits (ITCs) if applicable
💰 Input Tax Credits (ITCs)
If you paid GST/HST on business-related purchases, you can claim an input tax credit (ITC) to reduce your amount owing. Examples of eligible expenses:
- Office supplies
- Software and subscriptions
- Marketing services
- Utilities for home office (pro-rated)
📆 GST/HST Filing Deadlines
As a sole proprietor, your GST/HST filing frequency may be:
- Annual – due June 15, 2026 (balance due April 30)
- Quarterly or Monthly – based on your total revenues
Always confirm your reporting period on CRA correspondence.
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This premium ad space is reserved for one tax professional. Put your firm in the spotlight and reach qualified Canada leads directly.
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⚠️ Common Mistakes to Avoid
- Failing to register after crossing the $30,000 threshold
- Including GST/HST in reported income (double counting)
- Missing deadlines leading to penalties or interest
- Overclaiming ITCs without proper receipts
📚 Resources & Help
Disclaimer: This article is for informational purposes only and should not be construed as tax or legal advice. Please consult a CRA-registered tax professional for your personal situation.
