weird for me question

[mrkajz44]

Originally Posted by 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.

Nailed it here with this advice. Line 130 would also be acceptable, but then you can't claim any expenses that you might have incurred on the project. If you are getting $2k, I'd imagine you probably have a few small expenses along the way, so go with reporting it as a sole proprietor.

[CaptainCrunch]

Yeah, I would probably roll some of the website tools costs into my expenses.

[gottabekd]

One other thing is to be aware of the difference between current expenses and capital expenses. For your example of creating a website, say if you buy a computer to work on the website. That would be a capital expense, and you cannot deduct 100% of the cost off your income. Instead you have to depreciate it according to the Capital Cost Allowance rules.

But if you pay a monthly fee to host the website, that seems reasonable that is a current expense.

This CRA guide has a lot of info and examples about business expenses: http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-e.html

Also, though you don't have to register for GST, you might want to. If you voluntarily register, you will have to charge your client GST and remit it to CRA. But then you can also claim any GST on expenses and get that money back.

Finally, this is just my understanding of things, if anything is wrong, hopefully someone can correct me. I imagine any decent accountant could help significantly.

[Nufy]

Originally Posted by CaptainCrunch

Yeah, I would probably roll some of the website tools costs into my expenses.

Soooooo....Brewsters ???

or do i need to win some more Jerky first...LOL

[Locke]

You're doing a family member a favour at well below market rate? Pm Sent.

Hook me up for tax-deductible night at Brewsters!

[CaptainCrunch]