Where tand how to pay tax on interenet earnings

QUESTION: I am a Canadian citizen making American money from my website. The majority of the funds coming from the Google Adsense program. Google however did not send me a tax form, but I made over $4000.00
with them. They say they only send it to qualifying U.S. Publishers.

What are my legal obligations in this matter. Should I even bother including this money in my tax return?


david ingram replies:

As a Canadian resident you are taxable on your world income no matter who pays it to you or where and how it is paid.

You need tofile form 2124 to report the income and of course, can then deduct the relevant expenses that you paid to earn the income.

There is a fair list on form 21214 but it is not set up for an internet business per se.

For instance there is no specific place for hosting fees or even your internet service provider.

You also get to dedcut things like bank charges and if you have a separate room set up in your home, you can dedcut the relevant expenses agains t the income. The Office in home form is part of the T2124.

Theoretically, willfully not reporting the $4,000 could result in fine and imprisonment although it would be unlikely.

Better to do it right and come out clean.