Tax Tip - How earning from online platforms can impact your taxes

OTTAWA, ON, March 28, 2024 /CNW/ - Whether the earnings you make from online platforms is your main source of income, or a small part of it, you are considered to be a platform economy participant. When it's time to file your taxes, you must report all sources of your income, including gifts and donations.   

In the platform economy, there are four areas in which you can earn income from online platforms:

1. Sharing economy (for example, using and sharing assets like cars and spaces)
2. Gig economy (for example, short-term contracts, freelance work, or other temporary work)
3. Peer-to-peer (P2P) (for example, selling goods like clothing)
4. Social media influencers (for example, individuals with influence or significant presence on social media)

Do you work in any of these areas? If so, this information is for you.

Your employment status can impact how you're treated under legislation like:

• the Employment Insurance Act
• the Canadian Pension Plan
• the Income Tax Act

To identify if you're self-employed, you can consider a list of factors from the Employee or Self-employed web page and can even request a ruling to determine your status.

For a more in-depth understanding of what it means to be self-employed, explore the Learn about your taxes online learning tool. It offers a Working for yourself module that covers everything from registering your business to how to report your income.

Reporting your income correctly can help you:

• increase your qualifying amount for a mortgage or loan
• increase your contribution limit for a registered retirement savings plan

To report and pay tax on all your self-employment income, fill in lines 13499 and 13500 of your individual income tax and benefit return or complete the corporation income tax return for incorporated businesses. Fill in Form T2125, Statement of Business or Professional Activities, or Schedule 125 of the T2 return, and file it with your return.

To report and pay tax on rental income, including rental income earned via short-term accommodation platforms, fill lines 12599 and 12600 on your return. Also fill in Form T776, Statement of Real Estate Rentals.

• • Lines 12599 and 12600 - Rental income
  • Form T776 - Statement of Real Estate Rentals
  • Form T2125, Statement of Business or Professional Activities
  • How to fill in Form T2125
  • Are you a social media influencer? Here's what you need to know - Canada.ca

If your platform-based work is considered to be self-employment, you can claim eligible business expenses. Some eligible expenses include:

• advertisement costs
• costs to use a platform for sales
• software license and subscription fees

To see all the expenses you can claim, visit the Business expenses web page.

Note: Ensure that you're keeping records to support your claims when tax season comes around.

You must register for a GST/HST account once you earn more than $30,000 over four calendar quarters. To register for an account, you can use Business Registration Online (BRO).

Notes:

• If you earn income from ridesharing, you must collect and send the GST/HST to the CRA regardless of the amount you earn.  
• If the platforms you use don't collect GST/HST for taxable sales like subscriptions, you should account for it yourself by adding it to your invoices. You should also add GST/HST to your invoices even when the consumer is anonymous or unidentifiable.
• Make sure to have all the information you need when you register for your account (for example, your effective date or registration, GST/HST fiscal year, annual revenue, personal and business information).

You can visit the Taxes and the platform economy web page for the most technical and up to date information on you tax obligations as a platform economy participant.

Media Relations
Canada Revenue Agency
613-948-8366
[email protected]

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SOURCE Canada Revenue Agency