Income Tax Essentials for Influencers: Reporting Your Self-Employment Income (Part 3)

Once you understand what constitutes taxable income as an influencer, the next step is knowing how to report it to the Canada Revenue Agency (CRA). For most independent influencers, this means reporting self-employment income.

Operating as a Sole Proprietor: If your influencing activities are run as a sole proprietorship – meaning you and your business are seen as one entity – you'll report all your income and expenses directly on your personal income tax return. You'll detail your total earnings and then subtract your eligible business expenses to arrive at your net income, which is what's subject to tax.

What if Your Influencing Business is Incorporated? If you've chosen to incorporate your influencing activities, the reporting process changes. Your corporation is now a separate legal entity. This means the corporation itself will file its own corporate tax return, providing details of its financial activities. As the owner of an incorporated business, you would then draw income from the corporation, typically through salary or dividends, which you would report on your personal tax return.

A Note for Non-Resident Influencers: If you're a non-resident influencer earning income from Canadian sources, specific Canadian income tax rules will apply to you. These situations can be quite complex, as they may involve tax treaties between Canada and your country of residence, which could affect what income is taxable here. For non-residents, it's always wise to seek specialized tax advice to navigate these rules.

Properly reporting your income is fundamental to tax compliance and ensures you're on the right track with the CRA.

Source: https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/platform-economy/social-media-influencers.html?hsid=3d168752-db3e-40d2-96e5-366907a2c33e