I'm trying to help my boyfriend catch up on his taxes and I ran into an issue I'm a bit unclear on. Any help would be greatly appreciated!
He received cash for labour when he was between jobs. It totaled around $2000 over a span of about three weeks. Before and after this, he also worked two jobs for which he received T4's. What is the best way to report the $2000 cash?
- Other Employment Income
- Other Income
- Business Income
He has no expenses to report and simply wants to declare this income properly.
Here are the aspects I'm a bit fuzzy on:
- Other Employment Income lists "tips and occasional earnings" as examples, but I've heard that the CRA prefers you actually don't use this category for occasional earnings. I'm a bit unclear as to why.
- Would "Other Income" be preferred, or should this category not be used if the income was from employment?
- To my understanding, if your income was over $3500, you should list it as business income. Is the $3500 referring only to the occasional earnings portion, or to your total income? (He only made $2000 in occasional cash earnings, but he made well over $3500 from his jobs before and after this time). Is Business Income the safest way to go, or would reporting amounts under $3500 as business income actually be a problem? He doesn't have any records of the work he did for cash, so there is no way to back up the amounts reported. The T2125 also looks fairly complicated and requires info he doesn't know the answer to. I'm a bit hesitant to push him to do it in a more complicated way if it is acceptable or preferable to just list the number elsewhere.
- e.g. for "fiscal period" - would he just put the whole year of 2019?
- "Was this your last year of business?" - again, that's hard to answer when you're just referring to occasional earnings. If he's out of work again in the future, he'll probably pick up any odd jobs that he can get here and there. So I would think the answer is "no"?
- Can you do a T2125 on the standard TurboTax return?
Sorry that's a bit long and complicated! Thank you for any knowledge you have on this!!