I'm a freelancer with international clients. Do I claim my income under 'Foreign Income' or under 'Self-Employment'?

[taedaenextrea]

My clients are from the US and Europe, and I receive my payments in USD for simpler conversion. Do I claim the amount in the 'Foreign Income' section or the 'Self-employment' section? The money I earn is technically both, but I don't want to accidentally double-claim.

[tulip991]

As per Canada Revenue Agency (CRA): you would fill out the form T2125 Statement of Business activities or professional activities if you're self-employed. US business income is considered foreign business income thus, you have to report your foreign business income in Canadian dollars in T2125. 

You will treat your foreign business income the same way you would handle business income from Canadian sources when filing your Canadian income tax return. If you are a sole proprietor or part of a partnership, you will report your foreign income as part of your business or professional income on Form T2125 - Statement of Business Activities. 

In TurboTax, you will complete the Self-Employed section.

Since your foreign income needs to be converted into Canadian dollars, the Canada Revenue Agency (CRA) advises using the Bank of Canada exchange rate that was in effect on the day you received the income or using the average annual exchange rate.

Please see our TurboTax article, Using the United States-Canada Income Tax Treaty to Reduce Double Taxation

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