If you are a self employed individual and had a loss for tax purposes in your latest tax year, the loss can be used against other types of income on your personal tax return. For example: You incurred a loss of $1,000 from self-employment for the year, it will offset your other income such as employment income, rental income, capital gains etc. by $1,000 resulting in lower taxable income for the year.

These losses can be used for the same year or if you have no other types of income for the year, you can carry it forward for 20 years to use it in the future or carry it back to any of the prior 3 taxation years.

Contact SJ Chartered Accountants, a team of accountants & tax experts in Mississauga, Etobicoke & Toronto providing clients with tax, accounting, audit & advisory services.