Instaccountant – Your Online Accountants
Specialized Accountants for Independent Contractors, Freelancers, and Consultants
Expert accountants for Independent Contractors
We specialize in providing accounting and tax services for small businesses, independent contractors, and incorporated professionals across Canada and the USA. Whether you operate as a sole proprietor or through a corporation, our team supports contractors with accurate compliance, strategic tax planning, and ongoing financial clarity..
As an online accountant for contractors in Canada, we work with professionals who want reliable, proactive support without the complexity of traditional accounting firms.
Who Is Considered a Contractor?
A contractor is a self-employed professional who provides services to clients under a contract rather than as an employee. Contractors are responsible for managing their own business operations, including invoicing, expenses, tax filings, and CRA compliance. Unlike employees, contractors set their own rates, manage their schedules, and handle their own self-employment tax filing.
Who Is an Incorporated Contractor?
An incorporated contractor operates their contracting business through a corporation. In this structure, the corporation is a separate legal entity that enters into contracts, earns income, pays expenses, manages payroll, and files a T2 corporate tax return. This setup often provides tax planning flexibility but also requires more structured accounting and compliance.
Accounting and Tax Services for Independent Contractors
Our services are designed specifically for contractors who need clarity, compliance, and scalability. We eliminate duplication, streamline your finances, and ensure everything aligns with CRA requirements.
Our Core Services Include:
Income tax return preparation and filing
(T2 corporate tax return and self-employed/sole proprietor filings)Financial statement preparation
Bookkeeping services for contractors
Payroll management and remittances
Salary vs. dividend planning for incorporated contractors
Accounts receivable and payable management
GST/HST registration, preparation, and filing
CRA audits and correspondence support
Business incorporation and registration
Tax and financial advisory services
These services are delivered by a virtual accountant for contractors, with secure online access and optional in-office support.
Common Tax Problems Contractors Face
(and How We Help)
Incorrect CRA Classification (Employee vs. Contractor)
Many contractors unknowingly meet CRA criteria that resemble employment, such as working primarily for one client or following fixed schedules.
Risk: Loss of deductions, reassessments, back taxes, and penalties.
Our role: We review contracts and work arrangements to support proper classification and CRA compliance for contractors.
GST/HST Registration and Filing Errors
Contractors earning more than $30,000 annually must register for GST/HST, but this requirement is often missed.
Risk: Interest, late fees, and CRA audits.
Our role: We manage GST/HST registration, filing schedules, and reconciliations as part of your ongoing accounting support.
Improper Expense Deductions
Claiming personal or ineligible expenses is a common issue for contractors.
Risk: CRA reassessments and denied deductions.
Our role: We ensure only legitimate contractor deductions are claimed and properly documented.
Improper Expense Deductions
Claiming personal or ineligible expenses is a common issue for contractors.
Risk: CRA reassessments and denied deductions.
Our role: We ensure only legitimate contractor deductions are claimed and properly documented.
Poor Tax Planning and Cash Flow Management
Without payroll deductions, contractors often underestimate taxes owed.
Risk: Unexpected tax bills, penalties, and interest.
Our role: We provide proactive tax planning, installment guidance, and income structuring to avoid surprises.
Inadequate Bookkeeping and Record-Keeping
Disorganized records make audits stressful and deductions difficult to support.
Risk: Missed claims and CRA scrutiny.
Our role: Our bookkeeping services for contractors keep your records audit-ready year-round.
Why Choose Us as Your Accountant for Independent Contractors?
As tax experts for independent contractors, incorporated professionals, and freelancers, we deliver practical, contractor-focused solutions, not generic advice. Based in Toronto, we support clients across Canada and the USA through both online and in-office services.
What Sets Us Apart:
Timely, professional service to avoid CRA penalties
Clear guidance on CRA compliance for contractors
Strategic tax planning to maximize savings
Expert salary vs. dividend advice for incorporated professionals
Accurate, efficient bookkeeping and payroll support
Dedicated IT contractor tax preparation services and support for other industries
A Truly Tax-Stress-Free Environment for Contractors
Managing taxes as a contractor does not have to be overwhelming. With the right systems, planning, and expert support, your accounting becomes predictable, compliant, and stress-free. That’s exactly what we deliver.
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Frequently Asked Questions
As a contractor, you should generally set aside 25% to 30% of your income for taxes to cover income tax, CPP, and GST/HST if applicable. The exact amount depends on your earnings, deductions, and whether you are incorporated, so professional tax planning can help you avoid underpaying or overpaying.
Contractors operating through an incorporated business may qualify for the Small Business Deduction (SBD), which reduces the corporate tax rate on active business income. However, Personal Services Businesses (PSBs) are generally not eligible. An incorporation accountant for contractors in Canada can help determine if you qualify.
How Much Should I Set Aside for Taxes as an Independent Contractor?Yes, contractors who work primarily from home can deduct a portion of utilities, rent, internet, and office supplies. You must meet the CRA’s criteria for business use. An expert small business accountant can calculate your home office deduction for small business owners in Canada accurately to maximize savings.
To avoid being labeled as a PSB, ensure you work with multiple clients, have control over your schedule, and use your own tools or equipment. A corporate tax accountant for contractors can help structure your contracts and payroll properly to reduce PSB risk and maintain access to small business tax benefits.
All foreign income must be reported on your Canadian tax return. You may be eligible for foreign tax credits to prevent double taxation. A tax accountant for self-employed Canadians experienced in cross-border tax filing can help you manage reporting obligations efficiently.
If you miss your tax deadline, the CRA charges a 5% penalty on unpaid taxes plus 1% per month, up to a maximum of 12 months. Repeat offenders face higher penalties. Hiring a small business tax accountant helps ensure your returns are filed accurately and on time.
Yes, contractors can deduct up to 50% of eligible meals and entertainment expenses related to business activities such as client meetings or travel. Always keep detailed receipts and record the purpose of each expense for CRA compliance.
Yes. Contractors can deduct vehicle expenses, but only for business-related use. Maintain accurate mileage logs, fuel receipts, insurance, and maintenance records. An accountant specializing in contractor tax deductions can help calculate your mileage deduction for small business vehicles to ensure compliance with CRA rules.
Independent contractors in Canada must file a T1 General tax return along with Form T2125 (Statement of Business or Professional Activities) to report business income and expenses. Working with an expert contractor tax accountant in Canada ensures these forms are completed accurately, helping you claim all eligible deductions and stay compliant with CRA guidelines.
Keep detailed records such as receipts, invoices, mileage logs, bank statements, and digital copies of expenses for at least six years. Using digital receipt management for small business and bookkeeping solutions for contractors helps simplify tracking and ensures your deductions hold up during a CRA review.
Yes. If your total revenue exceeds $30,000 in a 12-month period, GST/HST registration is mandatory, even for part-time contractors. Professional GST/HST filing services for contractors ensure accurate collection, filing, and remittance to avoid CRA penalties.
Yes, contractors can deduct premiums for business-related insurance, such as liability, professional, or health insurance. These deductions lower your taxable income and form part of your overall tax planning strategies for small business owners in Canada.
Incorporated contractors can pay themselves through salary, dividends, or a combination of both. Each option has different tax implications. A corporate tax accountant for contractors can help you develop a strategy that balances personal income, RRSP contributions, and corporate tax efficiency.
Both accounts offer advantages. RRSPs reduce taxable income and defer taxes until withdrawal, while TFSAs provide tax-free investment growth. A tax planning expert for contractors in Canada can help you choose the best strategy for your income level and long-term financial goals.
