From Canada , do I need to declare taxes?

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ptchero

Junior Member
Nov 12, 2008
110
188
Hi, I've been involved with a few affiliate networks and awaiting my first pay check of $800.

I live in Canada and I'm 17 year old , I wanted to know if there is anything i must do before cashing in that check. Do i have to pay anything US gov or to my own Gov? Since I know barely anything about taxes and never filled a report in my life I'd appreciate any help you could supply.

Thanks in advance,
Ptchero

*Additionally, if anyone could give me more informations about incorporating in Canada i'd be even more pleased.
 
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Hi ptchero,

Harper says he's going to start taxing and watching income from ebay but I haven't heard about other internet income. I would assume that as far as Revenue Canada is concerned, it's ALL taxable whether they spot you or not.

I don't believe, at your age and income level, it would matter whether you file or not. Do you even have a Social Insurance Number? However, if you do file, that amount of income should be TAX-FREE for you due to deductions, so it wouldn't hurt you financially. You might even get a small tax credit depending on your province.
 
I wouldn't worry about $800 bucks. When I was 17 I was doing the same thing only w/egay, and I never had any problem. Congrats on your earnings. :)
 
Thanks for your replies , what I understand from all your posts is that for $800 it's no big deal . Btw i do have a SSN number.

My main problem/interogation is the following: I earned this $800 in about two weeks while ''holding back'' .By holding back I mean I didn't go All-out on my method , doing it moderatly so i can actually receive my first check and piss off my brother :) . Now i want to know what i have to do if i want to earn some serious money by scaling . My ultimate goal is reaching $150 per day. In canada I know that the first $10k is tax free but if i earn more than that (allow me to dream) what are the steps i should take to ensure all is legal.

Thanks again,
Ptchero
 
Are you a student? or have been a student for any period of time during the taxable year? If so, then you don't pay tax. Yes, first 10k (roughly) is free, then you will be in a low tax bracket federally and provincially.

As far as incorporation goes, it pays off to incorporate because anything that is remotely related to your business is a write off - meaning you get stuff without paying the taxes on the money spent. If you are in the 39% tax bracket, then that is a huge savings. Additionally, if you draw management fees from your corporation as a dividend, then the corporation pays little to no tax on that money, and you pay little to not tax on it as well.

You will need a CGA who can create your T5's for your dividends, but it is worth it ;)
 
Any money you make outside the country is other income on your tax form when you file your taxes at the end of year. You can declare it, but you dont have to. It is good if your gonna start declaring your pay checks register as a home business then you can start writing off tons of taxes. And I mean tons. You can write off you half your rent, bills, gas, internet connection everything. So yea all your paying on it is like $100, but its good to register as a home business before paying or declaring any taxes. That way you can register your paychecks as payroll.
 
You should file a return and report that income. There's around a $9,000 exemption so you won't have to pay any tax.

You should get a few hundred in a gst credit back though so you are actually ahead by filing.
 
I am also from Canada and just wondering the same thing.

I am about 1500 bucks a month on online services that is paid in paypal. If everything stays the same I would end up with 18,000 dollars at the end of the year. The problem is that I make 70K on my full time job.
Do I need to claim this income? I wish I don't have to.
 
lumpia said:
I am also from Canada and just wondering the same thing.

I am about 1500 bucks a month on online services that is paid in paypal. If everything stays the same I would end up with 18,000 dollars at the end of the year. The problem is that I make 70K on my full time job.
Do I need to claim this income? I wish I don't have to.
Click to expand...

Hey lumpia,

Technically you should declare all online income. But, if you want a way for them to not know that what you're making online, go get a US bank account. I don't know where you are in Canada, but if you ever go down to the states go to a bank and set up an account.

I have an account at B of A that I setup while in Seattle. All you need is 2 pieces of canadian ID. After you setup the account make sure you get a debit card and online banking (I think every single account automatically comes with both) - Go into your Paypal and hookup a US bank account.

This way your income will be dumped into that US account - which revenue Canada doesn't know about - and Paypal doesn't rape you with a 3% conversion rate to Cdn Dollars. Now you can go to any bank machine in Canada and pull out cash using that US card (as long as you're willing to pay the fee, usually a few bucks and then a couple percentage points - depends on bank). Or you can use the card to buy stuff while you're in the states.
 
thanks Canuck.
Now here is another twist.
What if the payee pays me through Western Union? I have never used Western Union in any way so I don't know what they have.
Isn't it Western Union considered cash transfer, therefore, not considered as an income???
 
Canuck said:
Hey lumpia,

Technically you should declare all online income. But, if you want a way for them to not know that what you're making online, go get a US bank account. I don't know where you are in Canada, but if you ever go down to the states go to a bank and set up an account.

I have an account at B of A that I setup while in Seattle. All you need is 2 pieces of canadian ID. After you setup the account make sure you get a debit card and online banking (I think every single account automatically comes with both) - Go into your Paypal and hookup a US bank account.

This way your income will be dumped into that US account - which revenue Canada doesn't know about - and Paypal doesn't rape you with a 3% conversion rate to Cdn Dollars. Now you can go to any bank machine in Canada and pull out cash using that US card (as long as you're willing to pay the fee, usually a few bucks and then a couple percentage points - depends on bank). Or you can use the card to buy stuff while you're in the states.
Click to expand...

Are you absolutely certain this works? From experience?

Because if it does... that is really kick ass...
 
Just take the money. I've never paid the taxes here in my country because they are way too fucking big (18% of your earnings). I'd rather donate that to BHW. (I hope the tax guys don't know about this forum).
 
lumpia said:
thanks Canuck.
Now here is another twist.
What if the payee pays me through Western Union? I have never used Western Union in any way so I don't know what they have.
Isn't it Western Union considered cash transfer, therefore, not considered as an income???
Click to expand...

No idea about Western Union. I assume if the transfers are small enough, no one will notice. Just don't deposit it into your bank acct.

drey2k said:
Are you absolutely certain this works? From experience?

Because if it does... that is really kick ass...
Click to expand...

Yes - it does work. Here's the blog post I read about it awhile back:
Code: 
http://btr.michaelkwan.com/2007/10/06/how-to-open-a-us-bank-account-as-a-canadian-citizen/
drey2k said:
Oh and wouldn't you have to pay taxes in the US?
Click to expand...

Uh, I haven't had to (nor have I been asked to) in the last year and a half. Last year I only cleared like 10-15k through it though.. so maybe I'm flying under their radar. Please note: you can't sue me if you get in shit and get taxed :D

technetrium said:
good idea:)
you in bc or alberta?
Click to expand...

BC (Vancouver)
 
Keep in mind that the gov't likes to charge in arrears. When they find out about your tax evasion, they will make you prove your source, so you better keep all sources documented and be prepared to pay interested for at least 3 years. More if they can prove tax fraud. On your schedule T1 there is a section for foreign income. This is where you should be claiming your income at a reasonable currency exchange. I wouldn't take any advice from anyone here, including myself. Talk to an accountant.
 
sniper said:
Keep in mind that the gov't likes to charge in arrears. When they find out about your tax evasion, they will make you prove your source, so you better keep all sources documented and be prepared to pay interested for at least 3 years. More if they can prove tax fraud. On your schedule T1 there is a section for foreign income. This is where you should be claiming your income at a reasonable currency exchange. I wouldn't take any advice from anyone here, including myself. Talk to an accountant.
Click to expand...

does it still apply even your employeer/payee don't claim tax for the money he paid you?
 
My accountant has a famous saying. Nobody has to "pay" taxes. All you have to do is "report" income. Not paying taxes is the accountants job.

With that said, please note that most countries allow you to make a certain amount of money, private or commercial, without being forced to report the income. So if you made $150 at a garage sell, you dont even have to report it, hence the government isnt interested in hearing about it - but that's providing your other fiscal income isnt above a certain amount.

Where I live, you can make about $15k tax free without the need to even report it. But you should check cause everywhere is different. Some countries require you report the money, just dont require you to pay anything.

Btw - By alternating your methods of receiving income, including the names on the accounts, you should be able to evade. But just remember, most of those money transfer systems (i.e. PayPal, Moneybookers, etc) all report to Uncle Sam. We live in funny times, and because of both financial fiasco and urban terrorism, it would seem that all governments are now watching all types of money transfers.
 
Canada might be different in terms of Paypal reporting and shit. I have never made that much money on the net until this year so I didn't have to report before but this is different now.
My other choice now is use my brother in the Philippines and he can withdraw the money in the Philippines.
 
I spoke to an accountant I know earlier and they told me that tax will be deducted from the US account... athough this accountant doesn't have much US experience.
 
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