questions about taxes in canada

urban123 · Jul 20, 2011

hey BHW.
i have a question. I am 15yrs old right now. now, i have two questions:
1. do I have to pay taxes from a certain amount, and when (age)
2. can you give me an official website that says from what age and from what amount i need to pay taxes

thanks

zone69 · Jul 20, 2011

age is not a factor for filing taxes in Canada.

If you have earnings, you should file taxes, regardless of age.

The personal exemption for 2011 is $10,527 so you will not pay taxes for earnings below this. Total tax payable will differ depending in which province you reside in since there is a Federal and Provincial tax on earnings.

Check here to determine tax levels in all provinces for 2011.

Code:

http://lsminsurance.ca/calculators/canada/income-tax

Hope this helps.

urban123 · Jul 20, 2011

zone69 said:
age is not a factor for filing taxes in Canada.

If you have earnings, you should file taxes, regardless of age.

[/code]Hope this helps.

but i know that my brother was working at ups canada and he didn't pay taxes until he turned 18.

urban123 · Jul 20, 2011

and also i know that "employers take the taxes from you and pay the government, but if i am making money online ( not much) then, who is my employer and should i still pay anything?

zone69 · Jul 20, 2011

urban123 said:
but i know that my brother was working at ups canada and he didn't pay taxes until he turned 18.

If you earn less than the personal exception limit you will not pay taxes but age is not a factor. The factor is how much you make.

Another thing to keep in mind is that your income will likely be considered self employment in IM and the tax law says you must pay CPP if you earn more than $3500. My opinion is it's best to file taxes every year you earn and not put a big 'X' on your back with the CRA. Dealing with them is a nightmare should they audit you down the road!

Code:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/flng-blgtns/menu-eng.html

zone69 · Jul 20, 2011

urban123 said:
and also i know that "employers take the taxes from you and pay the government, but if i am making money online ( not much) then, who is my employer and should i still pay anything?

you would be considered self employed and this does not exempt you from taxes.

if your income gets high, consider incorporating which will give you many right-offs as well as a lower tax bracket.

urban123 · Jul 20, 2011

zone69 said:
you would be considered self employed and this does not exempt you from taxes.

if your income gets high, consider incorporating which will give you many right-offs as well as a lower tax bracket.

ok but can a 15 year old open his own company, and also if i work for someone that has a company in the US, what should i do then?

zone69 · Jul 20, 2011

urban123 said:
ok but can a 15 year old open his own company, and also if i work for someone that has a company in the US, what should i do then?

you need to be 18 to incorporate in Canada. Get your parents to incorporate for you, then assign you as 99% shareholder. that's one way around this rule. simply issue 100 shares with you owning 99 of them.

Code:

http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs02194.html

If you are paid by a U.S. company, you will be exempt from U.S. taxes but will need to declare the income in Canada, then pay taxes due there.

urban123 · Jul 20, 2011

zone69 said:
you need to be 18 to incorporate in Canada. Get your parents to incorporate for you, then assign you as 99% shareholder. that's one way around this rule. simply issue 100 shares with you owning 99 of them.

Code:

If you are paid by a U.S. company, you will be exempt from U.S. taxes but will need to declare the income in Canada, then pay taxes due there.

so if i get paid by a us company, then i am not self-employed, i am just getting paid with no taxes taken from the income, and i pay the taxes in Canada? correct me if I am wrong?

zone69 · Jul 20, 2011

urban123 said:
so if i get paid by a us company, then i am not self-employed, i am just getting paid with no taxes taken from the income, and i pay the taxes in Canada? correct me if I am wrong?

correct. You would classified as a contractor so they would not hold any taxes in the U.S. Keep in mind as a contractor, you have some right-offs in order to accomplish your job.

For example I am an engineer and have done several contracts for U.S. companies. In those cases, I right off my home office, internet, mobile phone, etc. It is worth using a tax professional in this case. Just be sure you can show you use what you right off to work.

urban123 · Jul 20, 2011

zone69 said:
urban123 said:

so if i get paid by a us company, then i am not self-employed, i am just getting paid with no taxes taken from the income, and i pay the taxes in Canada? correct me if I am wrong?[/QUOTE

correct. You would classified as a contractor so they would not hold any taxes in the U.S. Keep in mind as a contractor, you have some right-offs in order to accomplish your job.

For example I am an engineer and have done several contracts for U.S. companies. In those cases, I right off my home office, internet, mobile phone, etc. It is worth using a tax professional in this case. Just be sure you can show you use what you right off to work.

Click to expand...

that's funny, like it doesn't make any difference if i'm 10,15 or 30 years old.
so i guess that this option would be the best.

thank you all for your help

questions about taxes in canada

urban123

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