{"id":7062601,"date":"2026-09-21T01:29:01","date_gmt":"2026-09-21T01:29:01","guid":{"rendered":"https:\/\/peraltafinancing.com\/accounting\/what-you-do-and-dont-have-to-report-as-income\/"},"modified":"2026-09-21T01:29:01","modified_gmt":"2026-09-21T01:29:01","slug":"what-you-do-and-dont-have-to-report-as-income","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=7062601","title":{"rendered":"What You Do (and Don\u2019t) Have to Report as Income"},"content":{"rendered":"


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One of my ongoing challenges is defining what it means to be a small business owner.<\/p>\n

From a tax perspective, whether you\u2019re a self-employed gig worker, freelancer, independent contractor, or solopreneur, you are essentially seen as a small business. What this effectively means is, if you\u2019re unincorporated, you\u2019ll report your business income and expenses on the T2125 form<\/strong><\/a> (statement of business activities) as part of your personal tax return. If incorporated, you\u2019ll file a T2 corporate return.<\/strong><\/p>\n

In addition to small business income, the question arises, what other types of income do you have to report and what is non taxable<\/strong>?<\/p>\n

The Golden Rule:<\/strong> If you worked for it, invested for it, or it’s a government benefit, it’s usually taxable. If it’s a gift, a lottery win, or earned inside a TFSA, it’s usually not.<\/p>\n

Income You Do<\/em> Have to Report:<\/strong><\/h2>\n

These are all considered taxable and must be included on your return:<\/p>\n

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    Self-employment\/small business business income <\/strong>– essentially any income that you earn for which you do not receive a T4.<\/p>\n<\/li>\n

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    Employment income and tips<\/strong> \u2014 reported on a T4 if you\u2019re employed.<\/p>\n<\/li>\n

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    Barter income<\/strong> \u2014 even if you exchanged services or goods with no cash involved (though I suspect much of this goes unreported). For tax purposes, barter transactions should be recorded at the fair market value of the services exchanged<\/p>\n<\/li>\n

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    Rental income<\/strong> \u2014 including short-term or informal rentals like Airbnb. (There are special rules and a separate schedule for this.) Keep in mind that as of 2026, digital platforms are required to report your earnings directly to the CRA, so ensuring your records match their data is more important than ever.<\/p>\n<\/li>\n

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    Investment income<\/strong> \u2014 such as interest, dividends, or capital gains<\/strong> earned on regular, non-registered investments, property or other assets.<\/p>\n<\/li>\n

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    Foreign income<\/strong> \u2014 Canadians are taxed on worldwide income. If you earned interest, dividends, business or property income from foreign sources, it must be reported.<\/p>\n<\/li>\n

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    Retirement income <\/strong>– including CPP\/QPP, OAS, private pensions etc.<\/p>\n<\/li>\n

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    Other income <\/strong>– you also might have to report government benefits (you will receive a tax slip), scholarship income, EI benefits etc.<\/p>\n<\/li>\n<\/ul>\n

    Income You Don\u2019t<\/em> Need to Report<\/strong><\/h2>\n

    There are some situations where you receive money, but it isn\u2019t considered taxable income:<\/p>\n

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      Gifts<\/strong> \u2014 as long as they\u2019re not tied to work performed. (The rules are different and more complex in the U.S.)<\/p>\n<\/li>\n

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      Inheritances<\/strong> \u2014 these are taxed in the estate before you receive them.<\/p>\n<\/li>\n

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      Lottery or gambling winnings<\/strong> \u2014 unless you gamble professionally or frequently enough that it\u2019s considered a business.<\/p>\n<\/li>\n

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      Personal loans or transfers between accounts<\/strong> \u2014 not considered income.<\/p>\n<\/li>\n

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      Sale of personal-use property<\/strong> \u2014 such as selling used personal items occasionally, but not as a business (e.g. on Facebook Marketplace or Kijiji). The key here is occasional and usually for less than what your purchased it for. <\/p>\n<\/li>\n

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      GST\/HST or QST collected<\/strong> \u2014 you\u2019re collecting this on behalf of the CRA or Revenu Qu\u00e9bec. It must be reported and remitted, but it\u2019s not counted as income.<\/p>\n<\/li>\n

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      TFSA earnings<\/strong> \u2014 interest, dividends, and capital gains earned in a TFSA are tax-free for life.<\/p>\n<\/li>\n

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      RRSP income<\/strong> \u2014 not taxable until withdrawn in retirement. The income earned inside your RRSP is sheltered.<\/p>\n<\/li>\n

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      Canada Child Benefit (CCB), GST\/HST credits<\/strong> and other tax credits\/refunds<\/strong> and life insurance payouts<\/strong> (typically)<\/p>\n<\/li>\n<\/ul>\n

      If you\u2019re unsure whether a type of income needs to be reported, it\u2019s worth taking a few minutes to find out\u2014often a quick internet search will be sufficient. While many forms of income will come with a tax slip or official document, it is important to note that not all do. That means it\u2019s up to you to make sure you\u2019re reporting correctly.<\/p>\n

      Not reporting taxable income can lead to substantial penalties.
      Conversely, reporting income you don\u2019t need to could mean paying more tax than necessary.<\/p>\n<\/div>\n