Making this extra money will consist of a few different things. In fact, "making" might even be the wrong word. I plan to use gift money (from birthdays/Christmas) towards this goal. I also will include income from my second part time job. We are also trying to sell some of the stuff we have lying around that we don't use anymore. We seem have have a lot of furniture in the basement we aren't using. There is also taking back bottles and perhaps the odd job or babysitting that might fit in.
My biggest question was about taxes - in Canada - what of this "extra income" is supposed to be claimed on our taxes? After a couple hours of reading I seem to have figured out the basics. First, I shall start by saying that I am certainly no accountant or tax guru so don't take my advice alone, make sure you do some research yourself:
Taxable income (income you need to claim on your taxes):
- Any "business" income:
- that part time job (my work takes off taxes and sends a T4 so I don't have to worry about it).
- Any "side" jobs - babysitting, snow shovelling, dog walking
- Any "capital gains" on personal items, ie: you bought a lamp for $10 and sold it for $20.
Non Taxable income:
-Gifts and inheritances
-Capital losses ie: you bought a lamp for $10 and sold it for $5 (this category covers most of the stuff you are probably selling at a garage sale).
I was always told you needed to claim garage sale income on your taxes, but what I read from the CRA it says you don't have to as long as it's a capital loss. Makes sense, you already paid taxes on the money you used to buy the items - you shouldn't have to pay taxes on it twice!
I will be updating my goal money every once and awhile so I can see if I make my goal!
Total to date: $100/$5000
The lamp that you purchased for $10 and sold for $20 would be considered personal use property and would not be taxable.
ReplyDeletehttp://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/cmpltng/prsnls/menu-eng.html
Thanks for your comment! From what I read on that website you are required to claim the additional $10 as a capital gain.
ReplyDelete"When you sell personal-use property, such as cars and boats, you may have a capital gain or loss. In most cases you do not end up with a capital gain, because this type of property usually does not increase in value over the years. As a result, you may end up with a loss. Although you have to report any gain on the sale of personal-use property, generally you are not allowed to claim a loss. For more information and an example, see Personal-use property losses."
Like I said, I am certainly not a tax genius and it is pretty unlikely to sell a lamp for twice as much as you bought it for. The CRA website suggests calling for specific questions about what income should be claimed and what shouldn't.