Please remember this is a user-to-user community that relies on member participation. We encourage you to ask questions AND share your own thoughts, experience and advice.
A new client brought in a reassessment from 2004 for unreported self employment earnings. The reassessment resulted in income tax owing, but they did not assess the CPP payable on self employment. Did they omit this by mistake? The client did have T4 earnings, but not enough to max out CPP. When I recreate the return in Profile, I show $1000 of CPP payable.
When clients have small sub-contractor earnings and no expenses, I have occasionally been tempted to put them under 'other employment income' so as to avoid a schedule 2124 and wasting time trying to find an industry code that sounds anything like what they were doing. But as far as I know, CPP is not optional. Any thoughts?
Page 1 of 1
CPP on self employment income
MultiQuote
#2
JohnV 
- Top Contributor
-
- Group: Members
- Posts: 1,017
- Joined: 03-December 01
- Location:Edjadaglash
Posted 21 April 2007 - 01:45 PM
The CPP is probably an oversight...
But why avoid a 2124 when the self employment is legit? For one, I can't believe the "no expenses" because there has to be some cost to the delivery of the service, (even if it is only your accounting fees) and it is the right thing to do. I am all for being practical and take shortcuts where I've learned they're acceptable, but self employemnt to other employment earnings is a bit of a stretch...
BTW there's lots of catch alls in the "other .... services"
But why avoid a 2124 when the self employment is legit? For one, I can't believe the "no expenses" because there has to be some cost to the delivery of the service, (even if it is only your accounting fees) and it is the right thing to do. I am all for being practical and take shortcuts where I've learned they're acceptable, but self employemnt to other employment earnings is a bit of a stretch...
BTW there's lots of catch alls in the "other .... services"
#3 Guest_snowplowguy_*
Posted 21 April 2007 - 04:19 PM
I agree with John in that they most likely missed the CPP contributions on self employed earnings.
With regard to the 104 income...... be careful. The CRA has a unit set up with the sole purpose of investigating Other Employment Income reported on line 104. From what I hear their function is to grab CPP contributions on income they deem to be from self employment or even better..... EI, CPP, and penalties for not filing T4 slips on income they consider to be employment income.
Another issue you may encounter by reporting small amounts of self employed income on line 104 is the software will attempt to make a fraudulent claim on line 363 of Schedule 1 if the individual has no other employment income.
BTW....... SIC codes 561000 (or if the client is remotely involved with construction 230000) are pretty generic.
With regard to the 104 income...... be careful. The CRA has a unit set up with the sole purpose of investigating Other Employment Income reported on line 104. From what I hear their function is to grab CPP contributions on income they deem to be from self employment or even better..... EI, CPP, and penalties for not filing T4 slips on income they consider to be employment income.
Another issue you may encounter by reporting small amounts of self employed income on line 104 is the software will attempt to make a fraudulent claim on line 363 of Schedule 1 if the individual has no other employment income.
BTW....... SIC codes 561000 (or if the client is remotely involved with construction 230000) are pretty generic.
#5
RL Tax Joe
- Professional Member
-
- Group: Members
- Posts: 500
- Joined: 26-February 07
- Gender:Male
Posted 21 April 2007 - 10:35 PM
James1, on Apr 21 2007, 12:12 PM, said:
it appears that their system is not completly integrated.
And we though Profile was bad :lol:
Page 1 of 1