proprietorship 30k gst/hst barrier but with additional income?

[entropicman]

Hi all, my question is this: Say I have a side project unrelated to my proprietorship/business and it brings in a small monthly revenue but this revenue puts my overall income above 30,000 - do I need to get an HST number?

In this example the proprietorship does not bring in over 30k yet however additional unrelated personal income does. Since you're reporting your businesses income on your personal income tax is there any distinction there between what "your business made" and what you made say from advertising revenue from website projects you do in your spare time - those are "businesses" in a sense but they are built by you and for you.

How would you (could you) distinguish that those are not a part of your proprietorship business? (considering your proprietorship is in this case offering technical services to businesses and your hobby is setting up interesting websites with for example google or local ads that you hope make a few extra bucks for the holidays) Or is this dangerous water to try to tread in?

 

[Kreskin]

I think it's only the business-related income to measure the 30k. Unrelated is unrelated.

 

[gerryh]

since you don't have a limited or incorporated company, then I would say your treading in a grey area and would strongly suggest you get tax advice from an acountant or someone that would know the tax laws.

 

[Kreskin]

It stands to reason, if someone makes 29,900 a year at a factory and sells 100 dollars worth of personally made widgets they aren't going to need an HST number for their side business, even though it all is taxable personally.

 

[jjaycee98]

Hi all, my question is this: Say I have a side project unrelated to my proprietorship/business and it brings in a small monthly revenue but this revenue puts my overall income above 30,000 - do I need to get an HST number?


Any income you make from whatever source has to be reported. Any Income that is earned by either sweat or brain that is not T4 Income is Business Income. If you do not Incorporate then you can report on multiple T2124s for what you want to consider separate businesses or you can do it all on one and report it as a business that has various types of endevors. If you are making money with a "hobby" it is reportable and taxable. Not hard to realize when you are "making money". Unless you support the "underground" economy as something good for the country.

It is totally beyond my conprehension as to why anyone wants to "escape" reporting GST/HST. This just means you are willing to give CRA your hard earned money. Everyone is used to paying GST/HST on virtually everything they buy. If you charge your customers $1500 (GST on $30,000) and have $ $400 GST on receipts for things you had to buy to run your business, then you send only $1100 to CRA and keep the $400. This is absolutly a desireable result!

If you chose Annual reporting it is not an overly burdening bit of bookkeeping. You also get to calculate GST on the value of preowned assets that you will be using exclusively for business and will be either amortizing or writing off. So if you have an old truck worth say $10,000 that is used just for the business you get to claim $476.19 GST.

 

[Kreskin]

How about charge your clients the extra of what the HST would be. Don't claim the GST expense receipts. The extra minus the non-claimed receipts = not sending anything to the CRA and keeping more in your pocket.

 

[jjaycee98]

How about charge your clients the extra of what the HST would be. Don't claim the GST expense receipts. The extra minus the non-claimed receipts = not sending anything to the CRA and keeping more in your pocket.

And for that you would probably go to jail. It's called "Fraud".

 

[Kreskin]

If I'm a small supplier and not required to charge HST, how could a tax deduction offset the difference between charging 10k plus 1.2k HST or just charging 11.2k and no HST?

 

[jjaycee98]

If I'm a small supplier and not required to charge HST, how could a tax deduction offset the difference between charging 10k plus 1.2k HST or just charging 11.2k and no HST?

Signing up for an HST number would mean you have to collect $1200 from clients. Let's pretent (making it simple) $400 of HST expense is your only expense. You recapture that $400 and send just $800 to CRA. In this scenario then you would have an actual profit of $10.000. That is how the system works-you collect from your clients and subtract what you have paid out, then send the rest to CRA.

Totally why HST is great for Companies! Also why companies will move to Ontario rather than having to pay the PST-which will be reinstated if HST is rolled back. Companies DO move where they get a Tax advantage. Even one Company closing down means a huge difference to a community.

 

[Kreskin]

Signing up for an HST number would mean you have to collect $1200 from clients. Let's pretent (making it simple) $400 of HST expense is your only expense. You recapture that $400 and send just $800 to CRA. In this scenario then you would have an actual profit of $10.000. That is how the system works-you collect from your clients and subtract what you have paid out, then send the rest to CRA.

Totally why HST is great for Companies! Also why companies will move to Ontario rather than having to pay the PST-which will be reinstated if HST is rolled back. Companies DO move where they get a Tax advantage. Even one Company closing down means a huge difference to a community.

But the client still pays 11,200. Lets not recapture the $400, but we'll charge the client what they would pay anyway. $11,200 - 400 = $10,800 is what you get (which is more than charging and recapturing the HST).

Most tax schemes are slight of hand baloney, and this is precisely one of them.

 

[cranky]

Gov of canada has an excellent website that would answer question so you know for sure. Id find and post the link for you but im on my phone. Maybe later tonight