An ultimate guide to insurance tax write-offs for self-employed Canadians

As a self-employed Canadian—whether you’re an entrepreneur, freelancer, or independent contractor—you can take advantage of certain insurance tax write-offs to help reduce your tax burden. 

While being self-employed comes with many perks, like flexibility and independence, it also comes with the responsibility of organizing business expenses and managing taxes. One of the best ways to reduce the amount of taxes you’ll pay is by understanding which insurance expenses are tax deductible. 

This guide will walk you through the key insurance tax write-offs for self-employed Canadians, so you can keep more money in your pocket when tax season rolls around.

What’s the difference between being an employee and being self-employed for tax purposes?

Employees have taxes deducted from every paycheck, while self-employed folks are on their own when it comes to calculating and paying what they owe. This makes it very important to keep track of expenses, remember to set aside a portion of your income for taxes and understand which deductions you can claim to lower your taxable income.

What is the deadline to file my taxes if I’m self-employed?

Employees have until April 30 to file their taxes, unless April 30 falls on a weekend. If this is the case, the deadline is extended to the next business day.

If you're self-employed, the Canada Revenue Agency (CRA) gives you until June 15 to file your return, but any taxes owed still need to be paid by April 30 to avoid penalties, so be sure to plan ahead. Since June 15 falls on a Sunday in 2025, the tax deadline is extended to the next business day, June 16.

Overview of insurance tax write-offs for self-employed Canadians

Insurance is a significant business expense, making it an important tax write-off for the self-employed. 

Here’s what you can deduct and how:

How to claim deductions

To properly claim tax deductions as a self-employed professional, you’ll need:

• Receipts, invoices, and bank statements as proof of expenses.
• A mileage log if you are claiming vehicle expenses.
• Form T2125 (Statement of Business or Professional Activities) when filing your taxes.
• Separate business and personal

Common mistakes to avoid

Making a mistake on your taxes can cost you time, and money, and even trigger an audit from the CRA. 

Here are some of the most common tax pitfalls self-employed Canadians face and strategies for avoiding them.

1. Mixing personal and business expenses

A big red flag for the CRA is claiming personal expenses as business deductions. For example, if you buy business insurance to protect your company from liability, that’s a deductible expense. But if you try to write off the full cost of your home insurance (not just the portion you use for work), that won’t fly. 

The CRA is strict about keeping business and personal expenses separate, so ensure you’re only deducting legitimate business-related insurance costs.

2. Not keeping receipts

If you’re claiming deductions, you need proof. 

If you don’t keep receipts and you end up getting audited, you could lose those deductions — and possibly end up paying extra in penalties. Store digital copies or use an expense-tracking app to stay organized.

The bottom line

Being self-employed has its perks, but it also comes with extra responsibilities — like handling your own taxes. Knowing what insurance tax write-offs you can claim as a self-employed Canadian, along with other small business tax deductions, can save you a lot of money. 

Keep accurate records, know what qualifies, and file on time. If you’re unsure, a tax professional or tax software can help ensure you claim every deduction you’re entitled to.

For information about insurance and taxes visit our insurance tax guide. 

Also read:

• Is life insurance taxable in Canada?
• How to use life insurance for tax and estate planning
• Is car insurance tax deductible in Canada?
• Is home insurance deductible in Canada?