I attended Blissdom Canada in Toronto a few weeks ago for my fifth time—I haven't missed a year yet—and I led three micro-sessions on the topic of "Blogging and Taxes." I promised those at my sessions (and those who wanted to come but couldn't), that I would write a post here at YMC to summarize what was asked and what we talked about. All three sessions had people asking similar questions, and five of them were prevalent:
1. What income do I need to report?
The technical answer is: everything. But when I first started blogging, the Partner I worked for said that if I was making coffee money from ads, that was more of a hobby, and I didn't need to report that income. But! If you're writing posts for pay or submitting articles and getting paid, that's income and it's taxable. Also, if you're given items to review or sent on trips, you're supposed to report the market value as income. (I KNOW.) The CRA likes to take their piece of the pie and you have to report anything that you're given as income. On the plus side . . .
2. What expenses can I deduct?
When you report income, you can also report the expenses you incur to make said income. Conference costs, travel costs, web-hosting costs, printer ink, pens, and so on and so on. You can claim your office use of home expenses, and your automobile expenses, as well. I outlined those deductions in this post.
3. When do I have to register for GST/HST?
When you've made $30,000 in a three month period, you are required to be registered for GST/HST . . . from the beginning of that three month period. CRA doesn't mess around. So, if you know you're getting close, just register to save yourself interest and penalties. You get to deduct the GST/HST you paid against the GST/HST you collected as well.
4. Should I be incorporated?
If you're making a small amount of income, probably not. If you're making full-time income, probably. There are more opportunities for tax planning, and there is also a shield against any legal liability if you're incorporated. An incorporated company is a separate entity. It's you cloned yourself, so any issues can be dealt with your clone.
5. What's the best way to track my income and expenses?
This should be a post on its own (And it will be!), but there are a number of programs that are easy to use and will help you keep track of the money coming in and coming out. I prefer Sage (formerly Simply) accounting, but Quickbooks is a close second.
Let me know if there's another question I can help you with!
Related posts:
How To Use Your Kids As Tax Deductions
How To Take the Stress Out Of Tax Time
My husband and I come from middle-class families. There were no trust funds, or people in our family able to fund our post-secondary education. He took out student loans to go to school and get a certificate in Wood Products Manufacturing, and had a great career trading lumber until the market crashed. (Side note: He is now the Director of Childrens & Families at our church. Life is weird.)
I am a Chartered Accountant and went about it in a roundabout way. I took some accounting courses while attending Briercrest College, then found a job at a C.A. firm. I took prerequisite courses, wrote the GMAT, then went through the C.A. program and wrote the (four-day) final exam to get my C.A. designation. I didn't have student loans, but money was tight living on an articling student's wage and paying for all of my courses.
When my husband and I started having kids, we wanted to do as much as we could to help our kids when they graduated from high school and wanted to attend post-secondary school. We read up on RESPs and it was a no-brainer, especially because the Canadian government matches your contributions to a certain limit.
The Government is giving you money, friends. This is a rare event.
We signed up with a company because a family friend represented them. He has since retired, and we've been wondering if we could do better for our kids (and ourselves).
It turns out that we can, thanks to giraffe & friends. We recently stopped our regular payments with the old RESP company as my husband and I both changed career directions and things were tight for a year or so. Now that we're both settled in our new paths, we now know how we're going to move forward in saving for our kids' education.
For you new moms out there (and you who have older kids, but haven't started RESPs yet), I want to help you understand why RESPs are important, and I want to help you navigate all of the information out there. If you ask any of my friends — especially those who had babies when I did — I preach the necessity of RESPs often. Very often.
A few things to consider:
The interactive post-secondary cost calculator on this site is a good one to start with. When I entered my info on the site, it told me the current average cost is $5,000 per year for post-secondary education (which seems low). An education in Law came in at over $10,000 per year and Dentistry was off the charts at $17,324. The true costs can be overwhelming — and probably higher than the chart says — so just take a moment and breathe.
Save what you can afford to save and that's better than saving nothing. Any little bit will help your kids when they go to post-secondary school.
Some RESP providers have hidden fees, but giraffe & friends do not. They sell one plan and it is all done online. That keeps their costs down and means more of your savings go directly to your child's education.
Very few RESPs are guaranteed not to take a dive in value (i.e., when the market crashes). giraffe & friends is different.
Most RESPs don't have a guaranteed outcome and your investment will be subject to stock market fluctuations. With the giraffe & friends 100% guaranteed RESP, you don't run the same risks. Your personal savings are 100% guaranteed to grow at about 2%.
You can also insure your contributions against the unthinkable (death or permanent disability).
You don't have to fill out oodles & oodles of forms to start contributions. This has been one of our major frustrations with our current RESP provider.
giraffe & friends has flexibility in how you contribute. You can make a lump sum payment, or schedule easy to manage pre-authorized payments through your bank account or credit card! It's about darn time that somebody made it easier to contribute to RESPs.
You have babies/toddler/children who will grow up to be high school graduates who want to pursue a higher education. (It goes by far too quickly, friends. My oldest is in MIDDLE SCHOOL.) You want to do whatever you can to help them when they get to that point and this is a no-brainer solution.
Do you contribute to RESPs? Do you have any questions about them? I've been convincing friends for eleven years now as to why they need to contribute, so I can answer any questions you have. Fire them at me.
Time flies by in the blink of an eye. One day you’re worrying about sending your little one to preschool, the next you’re sending them off to college. That’s why it’s important to invest in an RESP now.
Start saving today with a giraffe & friends' no-fee, worry-free and 100% guaranteed RESP. giraffe & friends helps you sleep easy with guaranteed growth, easy-to understand language, and the powerful boost of government grants.
Visit the ‘How To Plan For Your Kid's Future’ page and learn the best ways for parents to save money, when you should start saving, and more.
This is proudly sponsored by our friends at giraffe & friends.
www.giraffeandfriends.com
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