Advise on taxation in Canada

1 year 0 toronto_sv 1

Hello all

I hope someone can better assist me with the tax filing consideration on MS money earned. I work full time but do MS with 3-4 companies and income is less than $4000 CAD a year. Is anybody showing as their income when filing the tax return? If show as income and show my cost of gas, phone etc then there is nothing left. Need to figure this out before someone CRA finds out about it :)


1 year 0 Rheal 6

Claim it as a business..

1 year 0 Doug_14988351578922 16

Only one company, Premier Service, has issued me a T4 slip. If l don't get a slip, l find it to hard to claim.

1 year (Edited 1 year) 0 Simon_15155043561810 2

It is mandatory to declare that income, T4 slip or not. I file it through form T2125. Although not that much can be deducted for [phone/internet/etc.] expenses, they usually do cover all the taxes. Once you're used to it the extra paperwork on your tax report takes about 2 minutes/year.

1 year 0 Gayle_15242500148556 1

Simon is correct - the Income Tax Act (ITA) in Canada requires you to report 'all income from world wide sources'. {When you electronically file your return that statement is part of the declaration that you sign before filing}.

If you want to be generous and pay extra taxes (why?) you can just record it as Line 130 - Other Income.

To claim your expenses against it use the T2125 'Statement of Business or Professional Income'.

A few words to the wise:

  1. Set up a basic spreadsheet with columns for income and expenses (with totals at the bottom) and record everything as they occur then you have most of the info ready for tax prep.
  2. If you are claiming vehicle expenses - keep a log! of where & when you went for business, start and end mileage for the trip (and at start & end of year). Retain the log along with your business receipts for a total of 7 years: 6 years after you file for the year or there is any type of adjustment made to it.
  3. You may be able to claim a portion of your residence for business (never, ever claim Capital Cost Allowance (CCA) on it though!).
  4. For items like internet and cell phone services, be sure that you establish a 'reasonable' (key word in the ITA) basis for what % is for business. It might be time spent for business vs personal or data download or some other common sense reasoning. I recommend that you make notes (and keep them) while figuring it out so that you have them if ever asked how you arrived at that %.

For some great information on claiming business expenses see this guide:

You can contact the Canada Revenue Agency general inquiries at 1-800-959-8281

or the business window at 1-800-959-5525 for help. Note that if you are calling in March or April, it will likely take a bit of patience and time to get through to them. CRA hires a lot

of people for tax season to answer those phones so it might be helpful to call from mid May through end of December (if you can) to increase the likelihood of speaking to a more experienced, senior person.

Hope this is of assistance. :)

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