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rehman0780
Returning Member

Do I enter foreign self employment income using a foreign slip section in Turbo tax or do I need to complete the self employment section?

 
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Do I enter foreign self employment income using a foreign slip section in Turbo tax or do I need to complete the self employment section?

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.

Exchange Rates:

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.

For instance, suppose you are in Canada and do some work for an American client, who sends you a check in U.S. dollars. It gets converted to Canadian funds when you deposit it into your Canadian business account, and you record it in your business records. When you fill out your personal T1 tax return, this foreign income is part of your total business income calculations.

Note: If you are actually performing your work in a foreign country, such as the United States, you may have to pay income tax in that country.