Personal Finance

Self-employed if no 2020 income?

  • Last Updated:
  • Apr 28th, 2021 7:58 am
Newbie
Feb 25, 2014
16 posts
3 upvotes

Self-employed if no 2020 income?

If a person has been self employed (not incorporated) from 2010 - 2019, but in 2020 had no self-employment income (but incurred self-employment expenses), is that person still classfied as self-employed (from CRA perspective) in 2020 and as such can claim the 2020 self-employed expenses? Scoured CRA website but no commentary I can find. Thanks!
6 replies
Deal Fanatic
Jun 24, 2015
8520 posts
2941 upvotes
0 downvotes
I'd like to know the answer to this as well
Supermarket worker at Fortino's
I'm Not a Wise Guy but more of a Good Fella~!
Drive an Escalade
Sr. Member
Jan 18, 2017
607 posts
527 upvotes
AB
Depends. What were the expenses incurred for?

If you're continuing the same business you were before, and were spending money to land some contracts/make mad ca$h (but then didn't make mad ca$h), you're good to go.

If you just spent the money to buy cool things, but not actually make any money from clients/sales, then it's a bit harder to say that you have a business loss.
jt2014 wrote: If a person has been self employed (not incorporated) from 2010 - 2019, but in 2020 had no self-employment income (but incurred self-employment expenses), is that person still classfied as self-employed (from CRA perspective) in 2020 and as such can claim the 2020 self-employed expenses? Scoured CRA website but no commentary I can find. Thanks!
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MR CROSSBORDER KNOW IT NOTHING, but ready to spew forth. (Also a CPA)
Deal Fanatic
Jun 24, 2015
8520 posts
2941 upvotes
0 downvotes
you could have telephone, internet, possibly rent expenses and not make income, so yes those are things you can list.
Supermarket worker at Fortino's
I'm Not a Wise Guy but more of a Good Fella~!
Drive an Escalade
Deal Fanatic
Dec 12, 2009
6144 posts
3614 upvotes
Toronto
GoodFellaz wrote: you could have telephone, internet, possibly rent expenses and not make income, so yes those are things you can list.
Add insurance, license & association fees, accounting fees etc to the list.
Losses can be applied to other earnings for the tax year or carried forward to future years.
Repeated losses will likely invoke audits.
Deal Guru
Jan 19, 2017
10048 posts
6145 upvotes
jt2014 wrote: If a person has been self employed (not incorporated) from 2010 - 2019, but in 2020 had no self-employment income (but incurred self-employment expenses), is that person still classfied as self-employed (from CRA perspective) in 2020 and as such can claim the 2020 self-employed expenses? Scoured CRA website but no commentary I can find. Thanks!
Since you had no self employed income to claim your expenses, you will have negative net business income. Do you have other incomes like investment, rental that you want to offset your negative business income?
Deal Addict
May 10, 2011
1482 posts
540 upvotes
Ottawa
ROYinTO wrote: Repeated losses will likely invoke audits.
This. Especially if you actually have revenue (not income!!!).

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