What to do with T4A slips received from customers / clients
by Patrick
(Vancouver, BC)
I get self-employment professional income reported on T4As from several different sources and although they are for work that is essentially similar, every client issues them against different box codes (Box 048, 020 etc) without tax deducted. How do I show these on my T2125 instead of "Other Income" on "information slips.
I am trying to find a simple way to file taxes for income from a combination of employment income, professional income reported on T4As, professional income not reported on T4As, student bursaries, artist grants, EI payments, book royalties, payments from clients in USA (some who deduct withholding tax at source and some who don't.) Currently using GenuTax but getting frustrated as the gig economy grows.
I am also trying to find out how to deal with making sure that multiple jobs that pay very little individually actually constitute a "home-based business" income isn't always greater than the expense of trying to generate it .
I am also looking to find how to claim a tax credit for US withholding tax amounting to $240 USD on an $800 USD payment can be reclaimed either from US IRS or as a tax credit with CRA and how to do that using GenuTax - and whether its even worth bothering.
Patrick,
I am not familiar with GenuTax but most tax programs work as follows:
1. Key in the T4A slip into the tax program.
2. Based on the box number, it will allocate it to the proper schedule / line in the tax return.
Usually T4A slips that have a number in box 48 will show up on your T2125 Schedule in the Business Income area. You just have to be sure that your manually entered sales data on line 3A does
NOT include these amount ... otherwise you will be double counting.
T4A box 20 income pertains to self-employed commission.It should work the same way.
If your tax program doesn't do this, take a look at CRA's page on the subject and that should help you figure out where to input the values manually:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/tax-slips/understand-your-tax-slips/t4-slips/t4a-statement-pension-retirement-annuity-other-income.html
Regards how to keep track of all your various types of income, have you considered having a tax professional do a return for you at least one time so you can see where everything gets reported then do the DIY the following year.
You might also want to consider hiring a bookkeeper who would use SAAS to track your various categories of income. It won't get easier as your income and sources of income increase. Excel is okay but at some point it doesn't work any more. In addition, Excel doesn't have any GAAP "accounting" knowledge where a SAAS subscription such as QBO does.
Hopefully you are earning your professional income and side income using the same name so that although all your smaller multiple jobs are captured under it too. It is important to track all of it under one business. That way you can see if you are making money overall ... because who knows ... some of the smaller jobs could turn into larger jobs in the future so taking a small loss initially may be worth it.
If you had a good set of books that includes all of the T4A slips income already captured, as stated above, you just make sure you deduct it from line 3A so as to not to double count it.
With regards the tax withheld ... you could enter it as an expense on your T2125 Schedule called "tax withheld".