“Particularly within the first 12 months … be sure that for those who’re not accustomed to easy methods to report self-employed earnings, search help and get it proper, fairly than take the danger of getting it mistaken. It’ll take quite a bit longer and value much more to repair it,” mentioned Bruce Goudy, director of BDO Canada’s oblique tax follow.
An increasing number of Canadians are incomes earnings from web sites and apps, whether or not they’re renting out a property on Airbnb, delivering meals by Uber Eats, or doing graphic design on Fiverr.
In December 2023, 927,000 individuals ages 15 to 69 years previous mentioned they’d earned cash from a digital platform within the previous 12 months, mentioned Statistics Canada. This included platforms that pay employees straight and people who join employees with shoppers.
In case you earn cash by a digital platform, you’re thought-about self-employed, mentioned Stefanie Ricchio, a chartered skilled accountant and spokesperson for TurboTax Canada.
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How one can report self-employment earnings
As an alternative of the usual T4 tax type you get from an employer, you’ll have to report your self-employment earnings on a T2125 type while you file your taxes.
In addition to your earnings, you additionally have to report your bills, mentioned Ricchio. These bills can embody house workplace prices, automobile upkeep, and even the charges you pay to the digital platform—there are a whole bunch of deductions out there, she mentioned.
“The extra eligible deductions that you just apply to that earnings, the much less that tax invoice goes to be while you file.”
Since you’re typically not amassing taxes while you earn cash on a digital platform, you want to be ready to pay these taxes while you file, mentioned Ricchio. She recommends setting apart a couple of quarter of your earnings for this goal.