How do we declare Adsense income in Canada?

tax forms in Canada

[gmb21]

Can anyone tell me how I declare Adsense income on my tax return in Canada?

I do not have a registered business, so I assume I put it down as “self employed”. Does anyone know which “business code” I should use?

Any other tips?

Thanks :)

[Swanny007]

Fill out a T2125. Industry code 541800 is the one I use. The business name is simply your name.

The CRA is very helpful if you have any questions filling the forms out. I've called them many times.

[gmb21]

Thank you very much, Swanny007. I appreciate your help.

[TerryZule]

Get an accountant fast.

We got one and his tax attorney to boot.

He has made us thousands every year in write offs I would not have known how to get.

We declare all of our Adsense income (our only income) - 100% of all accounts to Revenue Canada.

[Tropical Island]

Or...you could do what I did & move from the ice & cold of Canada to a tropical place where you don't pay any taxes on outside income.

Works for me :-)

[Swanny007]

He has made us thousands every year in write offs I would not have known how to get.

Such as....? Just wondering if I can learn a thing or two because I'm not leaving this deep freeze of a country ;-)

[wheel]

Such as whether or not you want to contribute to paying CPP if you're self employed. If you choose not to contribute (because you expect to never receive benefits) then you've just saved yourself a few grand a year. Every year.

Such as whether you should be paying EI premiums.

Such as how much of your home you can deduct without the growth in your home being taxable.

Such as whether your income is salary or dividends.

Such as when you get payments in US funds, what exchange rate are you supposed to use when declaring your income in Canadian funds?

Such as when you sell advertising to a US company, where the ads are targetted to and directed at Canadians, do you need to charge GST?

And so on. Tax matters are complex and best left to the experts. As soon as you throw some entrepreneurial income in there, get a good small business accountant.

[TerryZule]

and......if you have a travel web site, then you write off ALL travel expenses.

write off ALL computer expenses.

we write off our RV, portion of car expenses, interest payments, mortgage payments, etc. etc. etc.

INCOME SPLITTING! Huge deal there.

The list is much larger than what WHEEL and I have created here.

We incorporated too which helped even more.

Write off ALL movie rentals, and much of our television costs because we have a movie and T.V. review blog. Doesn't make much but....OH WELL! A division of our corporation that loses money. Gee whiz that is a shame ;-)

[gmb21]

Lol, TerryZule.

[Swanny007]

I didn't know about the CPP thing... frankly I don't think I need it at this point. And I *know* I need to incorporate like last year. For tax savings :-) I'm in kind of a hick town so finding a good accountant that knows about US/Canada, Internet, Web advertising, etc. stuff is not easy.

[koan]

Such as when you get payments in US funds, what exchange rate are you supposed to use when declaring your income in Canadian funds?

That's a good question for any US revenue canadians make actually. Google can pay in your own currency but others won't. Care to answer this one?

[wheel]

lol. No, I don't know the answer - that's what the accountant does. Our accountant raised this and said the gov't had rules surrounding this, but making sure we used the exchange rate we actually received at the bank was a reasonable proxy for what one is supposed to do.

[netmeg]

I advocate using an accountant even if you're not in Canada. I love my accountant so much I'd marry her if she weren't already married, we weren't both straight and it wasn't illegal in the state of Michigan. Costs me about $400 every year for her to do four returns (two each for myself and my corporation, state and federal) Would be worth three times that just to not have the stress incurred by trying to do it myself. Plus she always finds deductions I wouldn't even have thought of.

[canadadr]

re: ' If you choose not to contribute (because you expect to never receive benefits) then you've just saved yourself a few grand a year.'

I was under the impression that it's mandatory to pay CPP contributions from any self-employed/sole proprietorship income (both employer's and the employee's portions) in ON?

On a separate note: is there any way you could PM me your lawyer's contact details - it's indeed VERY hard to find one in Ontario that would have knowledge of all these 'online income' things, so I would really appreciate getting in touch with him/her.

Thank you.

[wheel]

Well, I was under that impression to. Mistakenly so, apparently. I don't know if it's because we're incorporated, or not, or whatever - again with the 'let the accountant figure it out'. I looked at it, said that I would never see CPP in my life because I didn't expect it to be around and even if it was, I doubt I'd qualify income wise. So let them eat cake or something. No CPP contributions for me. That saved me more than the accountants costs every year.

[canadadr]

Thanks for the info! Will check if it's the same for sole proprietors.