What New Entrepreneurs in BC Need to Know About Business Taxes?
Stay updated with current accounting standards, business compliance, tax preparation tips, and latest news.
29 Jun 2025
If you’ve just launched your business and you're wondering how to do taxes as an entrepreneur, chances are you're already stressed. Maybe you're unsure if you even need to file. Maybe you heard someone say you don’t have to pay taxes if you make under $30,000. Maybe you’re just trying to avoid a CRA letter you can’t afford to open.
We get it. Taxes feel overwhelming, especially when you're managing every aspect of your business. But the truth is, avoiding it doesn’t make it go away. The good news? You can get ahead of it, and it’s not as complicated as it seems when you know the basics. Let's break it all down, straight and simple.
Key Takeaways for New Business Owners in BC
- All income must be reported, even under $30,000.
- You may need to charge GST/HST if your revenue crosses $30,000.
- Keep all your receipts and track every business cost.
- Set aside at least 25% of what you earn for taxes.
- Talk to a CPA before tax time, not after.
What Are Business Taxes and Do You Need to Pay?
Business taxes are the taxes you owe on the income your business earns. In Canada, this applies whether you're freelancing, running a side hustle, or managing a full-fledged company. If you earn money by providing goods or services, the government considers that business income, and yes, you need to report it. Even if you’re just starting out or not making much, the Canada Revenue Agency (CRA) requires you to report all self-employment income. If you're a sole proprietor or freelancer, your business income is filed as part of your personal income tax return. There's no separate return — just a special section in your personal return for business details. If your business is incorporated, it’s different. You’ll need to file a separate corporate income tax return (T2), and the company is taxed independently of your personal income.Do I Need to Charge Tax If I Make Less Than $30K?
If your total revenue stays under $30,000 in four straight calendar quarters, you're considered a small supplier, and you don’t have to register for GST/HST. But once you hit that threshold, you must register for a GST number and start charging tax. It's not optional.Choosing a Business Structure: Why It Matters
Your structure changes how you’re taxed:- Sole Proprietorship: File with your personal return using a T2125 form.
- Partnership: Similar, but split with your partner.
- Incorporation: Separate tax return, possible small business tax rate.
What Can You Write Off? Business Expenses That Save You Tax
Deductions help lower your self-employed tax bill. Here are some common ones:- Office supplies
- Phone and internet (business portion)
- Vehicle expenses
- Home office space
- Professional services (like your accountant)
- Marketing costs
How Much Should You Set Aside for Taxes?
A simple rule: set aside 25–30% of your income. This covers income tax, GST/HST, and CPP contributions. Many use a self-employed tax calculator to estimate this, especially during busy months. Don't wait until April to realize you’ve spent your tax money.Important CRA Forms and Deadlines
Know your forms:- T1: For sole proprietors
- T2125: For reporting business activity
- T2: Corporate return
- GST34: GST/HST return
- RC1: To register for a business number
- Personal tax: June 15 (but pay by April 30)
- Corporate tax: Six months after year-end
- GST/HST: Monthly, quarterly, or yearly, depending on what you choose
