Top 5 Tax Deductions for Freelancers/ Self-Employed in Canada (2025 Edition)
If you're a freelancer in Canada, understanding your tax deductions is one of the smartest ways to reduce what you owe and increase what you keep. With recent CRA updates for the 2024–2025 tax season, there are several key changes freelancers should be aware of.
At FalconSight Accounting, we help Canadian freelancers stay ahead of these changes and keep their books clean and compliant.
Here are 5 top tax deductions freelancers should claim in 2025 — with the latest updates from CRA and the Department of Finance.
🏠 1. Work-Space-in-the-Home Expenses (Line 22900)
If you use part of your home for business, you can claim a portion of your:
Rent or mortgage interest
Utilities (electricity, heat, water)
Property taxes
Internet
Maintenance and repairs
📢 CRA 2025 Update:
The temporary flat rate method has ended. You must now use the detailed method, calculating the percentage of your home used for work. Usually, this is based on square footage.
💻 2. Professional Services & Software
Deduct software and professional help essential to your business, like:
Accounting/bookkeeping (like us!)
Legal consultations
Cloud subscriptions (Zoom, Adobe, Google Workspace)
Business insurance
These are listed under Professional Fees or Office Expenses on your T2125.
🧓 3. CPP Contributions & the New 2025 Ceiling
As a self-employed individual, you’re responsible for both sides of CPP. In 2025:
There's a new second earnings ceiling (YAMPE) over $73,200
This means more CPP contributions — but also higher future pension benefits
📘 Details: 2025 CPP Changes
✈️ 4. Travel, Meals & Vehicle Expenses
Claim the business-use portion of:
Travel costs (flights, accommodation, meals at 50%)
Mileage & fuel
Repairs, insurance, and car lease (proportional)
Tip: Maintain a detailed logbook for vehicle use, noting the date, purpose, and distance of each trip to differentiate between business and personal use. Use mobile app like Driversnote to auto-track your trips.
💰 5. Capital Gains Inclusion Rate — Still at 50%
In early 2025, the government announced a delay in raising the capital gains inclusion rate. That means:
The inclusion rate remains at 50% for individuals
This affects freelancers who sell property, crypto, or investments related to their business
📢 Finance Canada – Capital Gains Announcement
📦 Bonus: CRA Relief for Business Tariffs
Importing equipment for your freelance business?
You may be eligible for tariff relief on certain goods under CRA’s hardship support.
To support businesses, the Canada Revenue Agency (CRA) will:
Defer GST/HST remittances and corporate income tax payments from April 2 to June 30, 2025
Waive interest on GST/HST and T2 instalment and arrears payments that are required to be paid between April 2 and June 30, 2025
Provide interest relief on existing GST/HST and T2 balances between April 2 and June 30, 2025
🎯 Final Thoughts
Tax season doesn’t need to be stressful. When you understand your available deductions and keep your records organized, you reduce risk and keep more money in your pocket.
At FalconSight Accounting, we offer: ✅ Affordable flat-rate bookkeeping
✅ Year-end CRA-ready reports
✅ One-on-one clean-up for late filers
📞 Need help getting organized for tax season?
We’ll make sure your books are clean, compliant, and optimized for every deduction.
📧 Email us at Help@falconsightaccountinginc.ca
🌐 Visit us: falconsightaccountinginc.ca