I run a sole-proprietor business and hire Freelancers to perform some work. Where do I deduct this expense?

 

Self-employed

Direct wage costs or subcontracts would go into the Inventory section. Indirect salary/wages would go in the expenses section under "Salaries and wages paid to employees".

 

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Self-employed

But the inventory section it says it is for GOODS SOLD, so the subcontractors or labour paid it's just in case you paid someone to be manufacturing the products you've sold, it's not about SERVICES. I still have the same issue and I don't find any place to put all the wage I've paid for subcontractors services, like painting services.

Self-employed

You need to put this in Line 8360—Sub-contracts.

 

You should not use "Salaries and Wages" (which is for employees with T4S). Instead, you want Line 8360—Sub-contracts. Here is how to navigate there:

Inside your return, go to the Self-Employment or Business Profile section.

Click through the "Income" screens until you reach the Business Expenses list.

Look for a section or button usually titled "Other Business Expenses" or "Operating Expenses."

You are looking specifically for a box labelled "Sub-contracts" (this corresponds to Line 8360 on the CRA T2125 form).

Enter the total amount paid to your painters/freelancers here.

 

If you don't see "Sub-contracts" in the list

Sometimes, TurboTax Online hides less common categories.

Look for a link at the bottom of the expense checklist that says "I have other expenses" or "Enter other expenses not listed."

You can manually type "Sub-contractors" or "Freelance Labour" in one of the blank "Other" descriptions and put the amount next to it. TurboTax will then map this to the correct part of your T2125.

 

Line 8360 (Sub-contracts): This is where the CRA expects to see payments made to people who are not your employees but were hired to help you fulfill a contract (like a painting job).

 

Hope this helps!