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Originally Posted by topfiverecords
Not claiming the income on your tax return is breaking the law. Getting paid in cash is not. I pay for things in cash all the time. It is legal tender in Canada.
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Well, considering the advice included:
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but if you position it as "doing a favour" for a friend and they pay you cash (no paper trail), will this work?
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it's pretty clear they were implying you could do it for cash only with no paper trail to avoid reporting the income for tax and EI purposes.
Being a tax guy myself, I think the idea of setting up a corporation right away is probably too big a step based on the original post. Just start keeping track of revenues and expenses and report it as a sole proprietorship on your T1. The income will likely reduce you EI benefits, but I don't really do work in that area so I don't know the $ impact there.