weird for me question

[CaptainCrunch]

So I'm going to help out a family member and build a website for their new business.

I don't have an established company or anything like that because I don't consult.

But they are going to pay me X amount of dollars for the website lets say under 2k. How do I go about declaring that income, and do I pay income tax on it?

[afc wimbledon]

Originally Posted by CaptainCrunch

So I'm going to help out a family member and build a website for their new business.

I don't have an established company or anything like that because I don't consult.

But they are going to pay me X amount of dollars for the website lets say under 2k. How do I go about declaring that income, and do I pay income tax on it?

I'd ask them for a nice toy, new snow blower or a couple of bryston 7st power amps.

[Locke]

Whats the market rate for that work?

[Hack&Lube]

100 cases of beer

[Scornfire]

Originally Posted by Locke

Whats the market rate for that work?

a LOT more than 2k if he's building the website from scratch, if simply using a website builder like bigcommerce then that's probably about right

[CaptainCrunch]

Well I'm trying to help out since they don't have a ton of dollars for this you I quoted them $50.00 per hour and figured about 20 hours to build the site for them.

But that was before this whole thing came about to taxation.

Can I even declare this on my personal income tax form, and what rate am I going to be taxed at?

I couldn't be bothered to set up a consulting entity because I don't do it and this is a one time thing.

[CaptainCrunch]

Originally Posted by Scornfire

a LOT more than 2k if he's building the website from scratch, if simply using a website builder like bigcommerce then that's probably about right

This, I'm using website tools. Its not that hard of a site.

[Hack&Lube]

Contact Locke!

[Scornfire]

I think it may apply to Line 130 declarations, not very sure though. If someone doesn't answer you tonight I'll call my Aunt in the morning

[Fuzz]

Originally Posted by CaptainCrunch

So I'm going to help out a family member and build a website for their new business.

I don't have an established company or anything like that because I don't consult.

But they are going to pay me X amount of dollars for the website lets say under 2k. How do I go about declaring that income, and do I pay income tax on it?

When I had income like that, I use Ufile and there was an entry for "other income" I just entered it in there, so ya, you pay taxes on it. Now, if they pay cash, and they don't list it anywhere as an expense, well... *


*NOT financial advice.

[Nufy]

Are they using it as a business expense...ie...will there be a record of the transaction on their corporate files ?

If yes, then you should report it as income on next years taxes...

I think it will be included in your overall income for the year.

If not and there is no official record...I'll meet you at Brewsters again on payday.

Locke may have a more official answer though.

[CaptainCrunch]

I thought that other income line (130?) was for things like grants and other things.

And they want to have the expense in their books, so no to 100 cases of beer

[PaperBagger'14]

Originally Posted by Fuzz

When I had income like that, I use Ufile and there was an entry for "other income" I just entered it in there, so ya, you pay taxes on it. Now, if they pay cash, and they don't list it anywhere as an expense, well... *


*NOT financial advice.

This is what I've done for when I do side jobs that pay by cheque, as well as tack on 10%. When you say you'll be able to save them money by doing it for cash people usually bite.

[CaptainCrunch]

Originally Posted by PaperBagger'14

This is what I've done for when I do side jobs that pay by cheque, as well as tack on 10%. When you say you'll be able to save them money by doing it for cash people usually bite.

So are they running it as an expense? and they just cut you a check.

[To Be Quite Honest]

They can gift it to you. Problem solved.

[gottabekd]

This would income earned under a sole-proprietorship operating in your name. There is no registration required if you operate under your own name and you don't have to register or charge GST if you aren't going to make $30,000 in the year (or in a single quarter, or 4 consecutive quarters).

The guide linked here has a lot of basics covered: http://www.cra-arc.gc.ca/E/pub/tg/rc4070/README.html

Pretty much, this income gets reported on your T1 (gross on line 162 and net on 135). So, if you incur any expenses to earn the income, you can subtract those expenses from the gross so you pay less tax. Of course, make sure you have receipts to back up the claims, etc, etc.

[Flames0910]

If you're under $30,000 per year you don't have to collect GST on the sale. You do have to declare the income though.

(edit, what he said ^^)

[CaptainCrunch]

Thanks that looks right.

[Jacks]

I know in Turbotax there is a spot under the income section where you can enter income that you don't have a T4 for. This would apply to cash labour jobs and stuff like that. Your tax rate would be based on your overall income.

[PaperBagger'14]

Originally Posted by CaptainCrunch

So are they running it as an expense? and they just cut you a check.

Yep they run it as an expense and you file it as misc income under whatever software you use or tell your accoutant/ HR Block about it.