I am working full time right now, and am doing IM on the side. I am starting to make some cash right now, but as a Canadian affiliate I do not have to submit my Tax ID to the American based affiliate companies. I want to eventually do IM full time, however right now I need a steady income to support my family. Basically I am worried that by the end of the year, I will have made some money, only to find at tax time I have to pay our 30% (that is our ridiculous tax rate here) of my earnings to the govt. And since I do not own a business, I cannot claim expenses such as PPC advertising or domain/hosting expenses. Is there a right way to go about this? I just don't want to end up getting screwed at year end.
I am in the same boat as you, I guess its a gamble the right thing to do would be to claim it on your personal income tax. Or you could forget about it and hope you don't get audited. Really the only two choices. Im not sure which way i want to go yet as i don't make that much online.
I know in the U.S. that even sole proprietorships can deduct these expenses. Is that not so in Canada?
Yes but we have to register as a sole proprietorship here, once we have a sole proprietorship we do get some income tax deduction options
Is it true you have to register as sole proprietorship? I was told by someone else that "by default" we can have sole proprietor status and that we can claim expenses without having to register.
maybe by default we can claim expenses, but we need to register if we want a different name or if you require a gst/pst number. I think it may change from province to province as well so Im not entirely sure.