OTTAWA,
ON, March 28, 2024 /CNW/ - Whether the
earnings you make from online platforms is your main source of
income, or a small part of it, you are considered to be a platform
economy participant. When it's time to file your taxes, you must
report all sources of your income, including gifts and
donations.
In the platform economy, there are four areas in which you can
earn income from online platforms:
- Sharing economy (for example, using and sharing
assets like cars and spaces)
- Gig economy (for example, short-term contracts,
freelance work, or other temporary work)
- Peer-to-peer (P2P) (for example, selling goods like
clothing)
- Social media influencers (for example, individuals
with influence or significant presence on social media)
Do you work in any of these areas? If so, this information is
for you.
How to determine if you're
self-employed
Your employment status can impact how you're treated under
legislation like:
- the Employment Insurance Act
- the Canadian Pension Plan
- the Income Tax Act
To identify if you're self-employed, you can consider a list of
factors from the Employee or Self-employed web page and can even
request a ruling to determine your status.
For a more in-depth understanding of what it means to be
self-employed, explore the Learn about your taxes online learning
tool. It offers a Working for yourself module that covers
everything from registering your business to how to report your
income.
How to report your
income
Reporting your income correctly can help you:
- increase your qualifying amount for a mortgage or loan
- increase your contribution limit for a registered retirement
savings plan
To report and pay tax on all
your self-employment income, fill in lines 13499 and
13500 of your individual income tax and benefit return or complete
the corporation income tax return for incorporated businesses. Fill
in Form T2125, Statement of Business or Professional Activities, or
Schedule 125 of the T2 return, and file it with your return.
To report and pay tax on rental income, including rental income
earned via short-term accommodation platforms, fill lines 12599 and
12600 on your return. Also fill in Form T776, Statement of Real
Estate Rentals.
-
- Lines 12599 and 12600 - Rental income
- Form T776 - Statement of Real Estate Rentals
- Form T2125, Statement of Business or Professional
Activities
- How to fill in Form T2125
- Are you a social media influencer? Here's what you need to know
- Canada.ca
How to claim eligible
expenses
If your platform-based work is considered to be self-employment,
you can claim eligible business expenses. Some eligible expenses
include:
- advertisement costs
- costs to use a platform for sales
- software license and subscription fees
To see all the expenses you can claim, visit the Business
expenses web page.
Note: Ensure that you're keeping records to support your claims
when tax season comes around.
How to register and charge for
GST/HST
You must register for a GST/HST account once you earn more than
$30,000 over four calendar quarters.
To register for an account, you can use Business Registration
Online (BRO).
Notes:
- If you earn income from ridesharing, you must collect and
send the GST/HST to the CRA regardless of the amount you
earn.
- If the platforms you use don't collect GST/HST for taxable
sales like subscriptions, you should account for it yourself by
adding it to your invoices. You should also add GST/HST to your
invoices even when the consumer is anonymous or
unidentifiable.
- Make sure to have all the information you need when you
register for your account (for example, your effective date or
registration, GST/HST fiscal year, annual revenue, personal
and business information).
More information
You can visit the Taxes and the platform economy web page for
the most technical and up to date information on you tax
obligations as a platform economy participant.
Contacts
Media Relations
Canada Revenue Agency
613-948-8366
cra-arc.media@cra-arc.gc.ca
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SOURCE Canada Revenue Agency