Taxes: Claiming online earnings.

[chicgeek]

Hi hi.

Since the fall I've worked from home for some mystery company (), being reimbursed through Paypal. I'm based in Canada and the company isn't, and I haven't paid any taxes on my earnings.

Anyone know how I might claim this?

Laura

[Aviva]

You'd probably want to talk to an accountant to see if you would be considered an employee or an independent contractor. If you're an employee, you'd just fill out a tax form like usual. If you're an independent contractor, you'd be entitled to a bunch of extra deductions, like perhaps a home office, office supplies, etc. I don't think the fact that your employer is outside of Canada makes a difference.

On another note, if you are not getting tax deducted at source, the CRA may in future years require you to make monthly or quarterly tax instalment payments, depending on how much you are earning.

[chicgeek]

So I wouldn't need a T4 or some equivalent?

[Julie]

Oh, fun. I just did my taxes a couple weeks ago. Whew. I overpay during the year, and get some back when I file. It all works out, and I like the extra chunk at the end.

For the online stuff this year though... I consulted briefly with my parents' business accountant, and he gave me some tips. It was easy enough for me to do this time, but I'm not going to be willing to tackle it next year cuz its going to be much more complicated.

[Taltos]

I'd love to be able to offer advice...but I don't know enough about US taxes little lone Canadian taxes Sorry.

[suzjor]

Originally Posted by chicgeek

Hi hi.

Since the fall I've worked from home for some mystery company (), being reimbursed through Paypal. I'm based in Canada and the company isn't, and I haven't paid any taxes on my earnings.

Anyone know how I might claim this?

Laura

I use to do mystery shopping but it wasn't online. Sorry...I don't know about Canadian tax reporting.

[micksss]

It would be worth it sit down with an accountant for a 1/2 hour with a list of prepared questions. Make the most out of your time because they can be costly. Best of Luck

[chicgeek]

As it is, I just have enough money for my own expenses, not to pay for someone else's time.

I might just wait on the phone with Revenue Canada.... or keep hunting and asking. Sigh.

[edjay]

Originally Posted by chicgeek

As it is, I just have enough money for my own expenses, not to pay for someone else's time.

I might just wait on the phone with Revenue Canada.... or keep hunting and asking. Sigh.

Go to the local Tax Office and ask their advice?

[StupidScript]

Basically, it's normal income. It doesn't matter whether you worked in an online-attached environment or not ... you did work, somebody paid you for it. If they paid you through PayPal or check or direct deposit or in clams ... it doesn't matter.

In the U.S., there are typically 2 types of jobs like this: 1 where the employer is making a claim to the IRS against the money they paid to (you) and 1 where the employer is not making a claim. The first is above-board, and the second is typically not. In the U.S. by law, any exchange of goods for services needs to be included in the tax revenue system, so companies that keep these types of arrangements off of their books aren't doing what is required of them.

I've received tax forms (similar to wage statements) from most employers when I have been contracted to work for them. Usually, this means that they will be trying to write off the money they paid to me. Sometimes I don't receive any forms, which usually means they are trying to hide something from the government, or that they don't like paperwork and figure that I don't either.

Well ... after a couple of run-ins with the tax division, I am happy to report that if you treat income like income, and go about your normal business, and file your tax returns as honorably as you can, everything works out just fine. Worst-case scenario: You receive a goodly sum from an employer, you don't report it as income because you thought it was 'under-the-table', the employer does report it ... and the tax hooligans come knocking at your door looking for 5 or 10 years worth of your tax returns so they can punish you for your naughtiness.

On the U.S. tax forms, there are spaces (and extra forms) for including this type of contracted income in your filing. That's where I put this type of info, often with an attached sheet identifying the employer, as well. There may be an online 'user guide' to your Canadian tax forms that will tell you where to include this info, and what additional paperwork might be required.

[ryukenden]

Usually you could hire accountants who will sort out your taxes and I think you better go for it. After 1st year, you will be able to do those taxes issues yourself. So for 1st year, go and hire an accountant. They are not that expensive.

[Camille]

If you do not receive an end of year, you are probably being treated as "self employed" and the income that you receive needs to be treated as "self employed" income or other income. Always best to speak to an accountant. Just make sure you have a good accountant.

[chicgeek]

I talked to an accountant briefly over a beer. With what I earned last year, she said don't bother claiming it. Next tax year I will have to, though.

[Zap]

Originally Posted by chicgeek

I talked to an accountant briefly over a beer. With what I earned last year, she said don't bother claiming it. Next tax year I will have to, though.

If you made less than $6,600 total (or thereabouts), then claim it. You get a personal deduction for $6,600 anyway and claiming that income will cover you legally if REVCAN ever finds out about it.

And... no T4 necessary because deductions weren't taken and it's easy enough to say that you work for yourself in this line of work. That way, you get to claim expenses that you wouldn't get to claim with a regular full time job as an employee somewhere. It's classified on the T1 as "income from other sources".

[chicgeek]

Hmmm... okay, I'll look into this more. Thanks.

[Camille]

Tax sucks! Why should we pay tax on our hard earned money? If we sat on our bums all day long, the government would give us money for not doing anything - TAX FREE! Paid for courtesy of the people who work and pay tax!

Sorry - just a bit disgruntled as I received a very hefty tax bill from over 10 years ago. Grrr!

[chicgeek]

Um... because taxes pay for things like road repair, law enforcement, health care, schools... All silly reasons, I know.

[pgzn]

Originally Posted by chicgeek

Um... because taxes pay for things like road repair, law enforcement, health care, schools... All silly reasons, I know.

They might in Canada, but not in the US to any extent.

Roads are paid for by gas taxes. I pay for health care myself. The price of that health care artificially increased by about 800% due to regulations, and the feds driving the price up.

Schools, police and jails are paid for by property taxes and state income/sales taxes. Very little of what the average person in the US pays in Federal Income taxes ever comes back to benefit them besides military protection.

The feds give just enough back to the states to keep them towing the line. Most of the money they get goes to ponzie schemes, and creating/enforcing destructive regulations.

[webgirl]

I belive in taxes, they are needed and necessary. It's not like people would take it upon themselves to pay for roads or schools on their own. I say yes for the accountant help. They alwasy know how to save you money and keep you from paying much more later on.

[Camille]

Originally Posted by webgirl

I belive in taxes, they are needed and necessary. It's not like people would take it upon themselves to pay for roads or schools on their own. I say yes for the accountant help. They alwasy know how to save you money and keep you from paying much more later on.

Subject to your having a good accountant. Do go on recommendation. Having a bad accountant can cost you loads...trust me! Unfortunately I learnt through bad experience.