Forum Moderators: skibum
Now, I'm only 19, and have never filed taxes (in Canada) yet. As far I know, when you have a job here, your employer sends you a T4 slip which you use as reference when doing your annual taxes. And since tax season is here, I'm at a loss with that to do about my website advertising revenue.
With revenues coming from American advertising companies such as the ones I listed above... How exactly does something like that get claimed? Or does it even need to be?
If there are any other Canadian webmasters who earn international revenue for advertising, what do you do when it comes to taxes? Obviously FastClick, Casale, etc aren't going to send me a payment slip (or are they)? Would my government have any way of knowing about this income? Would I be able to earn it under the table? Does this sort of income have to be filed under a business?
Any suggestions or comments from experience would be greatly appreciated.
Thank you in advance.
The nice part is you can write off some expenses for things you used to earn that money.
Also, be sure that when you declare it on your income tax filing, you either declare it clearly as US income, or convert it to Can. funds (you can get the rate for 2005 from CCRA.
Sorry, it's not all that complex, but it's not absolutely simple either.
If that's the only income you've made for the year, you won't pay a lot of tax on it. I think $13,000 is the cut off for the 0% tax rate, and after tax credits you're probably near even. By filing taxes you build up RRSP room anyway.
You probably want to talk to an accountant about the best way to structure yourself for 2006.
Sean
You have to claim because the information is available to the Canadian government.
I know, I'm Canadian.
Just give all the info to your accountant and he will know how to file.
Like the others mentioned, the taxes are not even that high with that amount and not worth the headache of not reporting.
One issue with an above reply, you shouldn't have to pay EI on business income. They aren't going to pay you EI if your website goes under, so you don't have to contribute based on those earnings. You do have to pay CPP though.
And what if I don't have an accountant? Like I said, I've just turned 19, and this will be my first legal tax year requiring a return. Thus, I'm looking for the simplest solution to all of this. Do I really need to see an accountant just for this revenue?
"You'd claim it as business income. You'll fill out form T2124 with your tax return. You can claim any related expenses (i.e. computer purchase or whatever else you've bought to earn the income) against the earnings."
I'm guessing that means I'd need to register a business, get a GST number, etc? Isn't there something simpler? Can't it just be claimed as other or self-employed income?
Thanks again for all the comments guys. I'll keep checking back.
I suggest you spend the $40CDN for Quick Tax, and when it asks you if you're self-employed, you say yes, and follow along. Quick Tax handles all the depreciation of assets for you from year to year, and guides you through filling out the form. It's fairly idiot proof.
Also go to the government's web site (used to be ccra.gc.ca) and look up the form and related articles. It will tell you what you can deduct, and how to figure out what portion of your house is used for business.
Sean
And what if I don't have an accountant?
You need an accountant, and not the kind which employs semi-trained Blockheads to sit in rented offices for two months a year just before tax time.
A real accountant who knows about self-employment and overseas income could file your tax return rapidly and accurately for a small fee which would be more than recouped by the accountant's knowledge of how to claim every deduction possible.
In my first year self-employed in Canada I filed my tax returns myself and had trouble for years afterwards. For my second year my accountant completed the work in a couple of hours and saved me thousands.
Note: I live in Quebec where we have two tax returns and so twice the complexity!
You need an accountant, and not the kind which employs semi-trained Blockheads to sit in rented offices for two months a year just before tax time.
First of all, I've never filed a tax return before, and I haven't the slightest clue of what many tax terms mean, or what certain legal requirements are.
Now, in my town, I believe there are a couple of "certified accountants" offices. So, I get the feeling I'll be walking into one of these places feeling completely lost. What do I ask for?...
"Hi, I'm 19 and I made some money off the internet this year while living with my parents. How do I claim it?... Oh by the way, I've never filed a return before!"
I'm sure they'll end up looking at me like I'm some idiot.
Any suggestions for how I should "acquire" an accountant and how I should handle them? What kind of information will they need? How expensive are they?
Ack, sorry for sounding like a moron guys, but this tax and financial stuff really has me lost… Especially since I’ve never done it before.
Thanks in advance.
...Would the non-business version of QuickTax suffice?
Basically, before you go, you should gather all your income and expenses. He will help you organize them (his staff may send out some sort of paperwork before your appointment to help you organize everything) to prepare your taxes.
Like everything else, it's a learning process. Since it's basically your first experience with taxes, everything's going to be overwhelming. But each year, you'll understand more and more. Similarly, the accountant may not understand your business or situation that well in the begining. But each year, he will understand better and better. That's why it's good to keep the same accountant instead of jumping around each year to whoever offers a $5 discount.
