“Particularly within the first 12 months … ensure that when you’re not acquainted with learn how to report self-employed revenue, search help and get it proper, quite than take the chance of getting it mistaken. It’ll take loads longer and price much more to repair it,” stated Bruce Goudy, director of BDO Canada’s oblique tax observe.
An increasing number of Canadians are incomes revenue from web sites and apps, whether or not they’re renting out a property on Airbnb, delivering meals via Uber Eats, or doing graphic design on Fiverr.
In December 2023, 927,000 folks ages 15 to 69 years outdated stated they’d earned cash from a digital platform within the previous 12 months, stated Statistics Canada. This included platforms that pay employees instantly and people who join employees with purchasers.
For those who earn cash via a digital platform, you might be thought of self-employed, stated Stefanie Ricchio, a chartered skilled accountant and spokesperson for TurboTax Canada.
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Easy methods to report self-employment revenue
As an alternative of the usual T4 tax type you get from an employer, you’ll must report your self-employment revenue on a T2125 type while you file your taxes.
In addition to your revenue, you additionally must report your bills, stated Ricchio. These bills can embrace dwelling workplace prices, automotive upkeep, and even the charges you pay to the digital platform—there are lots of of deductions obtainable, she stated.
“The extra eligible deductions that you simply apply to that revenue, the much less that tax invoice goes to be while you file.”
Since you’re typically not gathering taxes while you earn cash on a digital platform, it’s essential to be ready to pay these taxes while you file, stated Ricchio. She recommends setting apart a few quarter of your revenue for this goal.