Can we file skip the dishes income of $5000 on form t2125 or should we include this income in other income on line 104

toor_vjs · ‎June 02, 2020

Can we deduct car gas and other expenses from total income of $5000 if we put this on line 104 and if we use t2125 client does not have business ,gst/hst no as this is not mandatory for uber eats and skip the dishes income.

jparsons · ‎June 02, 2020

That is only correct if Skip the Dishes has been determined to be a taxi business. I don't believe it has been designated that way although I could be wrong. Skip the Dishes seems to be more of a delivery service, in which case the small supplier threshold applies.

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jparsons · ‎June 02, 2020

It might not be mandatory to apply for a BN since the sales are still less than $30,000, but why not handle it as a business from the start? Certainly any expenses incurred to earn the income, including reasonable vehicle costs, would be deductible.

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jenna3 · ‎June 02, 2020

you don't need to be registered for a business number to use T2125; this is small business income, deduct the costs it took to get there as long as they have an expectation of profit

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kozakworld · ‎June 02, 2020

There was a discussion in the TaxCycle forum just last week about the GST/HST issue surrounding Uber and Uber Eats drivers.

The resolve was that taxi services are automatically required to register and collect GST/HST as soon as they reach their first $1.00 of income, so all Uber drivers would fall in this category.  If the Uber Eats driver is also an Uber driver, then GST/HST needs to be collected: "a person or business who is registered for HST can not decide which of their sales they will collect tax on and which they won’t."

If, on the other hand, the Uber Eats driver's only income is from delivery services (no taxi services) and they are not registered for GST/HST, then GST/HST is not required while their income is below the $30K threshold.

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Teddybear1 · ‎June 02, 2020

Skip The Dishes is Like Uber. They have to charge GST/HSt on their services regardless of income level.

So yes T2125 is required and HST/GST return is also required irrespective of the $30K threshold! It is mandatory for such businesses.

jparsons · ‎June 02, 2020

That is only correct if Skip the Dishes has been determined to be a taxi business. I don't believe it has been designated that way although I could be wrong. Skip the Dishes seems to be more of a delivery service, in which case the small supplier threshold applies.

jparsons · ‎June 02, 2020

It might not be mandatory to apply for a BN since the sales are still less than $30,000, but why not handle it as a business from the start? Certainly any expenses incurred to earn the income, including reasonable vehicle costs, would be deductible.

jenna3 · ‎June 02, 2020

you don't need to be registered for a business number to use T2125; this is small business income, deduct the costs it took to get there as long as they have an expectation of profit

kozakworld · ‎June 02, 2020

There was a discussion in the TaxCycle forum just last week about the GST/HST issue surrounding Uber and Uber Eats drivers.

The resolve was that taxi services are automatically required to register and collect GST/HST as soon as they reach their first $1.00 of income, so all Uber drivers would fall in this category.  If the Uber Eats driver is also an Uber driver, then GST/HST needs to be collected: "a person or business who is registered for HST can not decide which of their sales they will collect tax on and which they won’t."

If, on the other hand, the Uber Eats driver's only income is from delivery services (no taxi services) and they are not registered for GST/HST, then GST/HST is not required while their income is below the $30K threshold.

jparsons · ‎June 02, 2020

Thank you for that. I agree totally with your analysis.

jrbooks · ‎December 16, 2021

You should definitely NOT put your Skip the Dishes income on line 104. This was done in the past, but CRA started cracking down on that practice quite some years ago. If it were $500 you might get away with that, but $5000 is a fair chunk of change.

You are considered a self-employed driver, so you will fill out a T2125. On this you will put the gross amount of $5000 and then take all relevant expenses (vehicle). Be aware that the vehicle portion of the form is not fun and requires keeping track of your total kms for the year as well as business kms for the year so you can pro-rate all your expenses. I have heard tax preparers say they have successfully used a mileage rate (such as $0.59/$0.53) for business kms but that's not how the rules read. You will also have to have a log of your business kms.as CRA likes to check those.

Your total income for the business was less than $30,000 for the year so you do not have to register for GST. However, should your income pass $30,000 (and the rules for passing are somewhat complex), then you will be required to register for GST.

I'm attaching a reference from Intuit from 2020:

https://turbotax.intuit.ca/tips/gst-hst-reporting-requirements-for-food-delivery-services-11950

Hope this helps.

Jo

hewi · ‎November 26, 2023

I believe that claiming as 'other income' will not calculate CPP contributions which usually start at $3500 income - best to just do the T2125, IMO, unless income under $3500