Need help with freelance business taxes?
I live in Quebec and have a full time job for which I file my taxes for each year. In August 2007 I started working on some freelance work on the side and invoiced the customers under my own name. I put 40% of what they paid me aside for income taxes. Now, in 2008, I am registering my business as a sole proprietorship to keep my business and personal expenses seperate and also may one day quit my full time job and work on my own business. I made about 10k in 2007, $4500 of which I have set aside for taxes. However, I have not bought anything for my business as I use a borrowed computer and bear the cost of my phone on my own cellphone bill. I need a computer now, do I buy the computer, then deduct the amount paid for the computer from the amount I declare as income on my tax return? Same goes for a new cellphone just for my business? In other words, I make 10k, spend 2k on a laptop and then 500 on cellphone and services, so I declare that my profit is 7.5k?
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