Side hustle turning out better than expected...

Discussion in 'Finance, Investing & Careers' started by tommi, Oct 8, 2017.

  1. tommi

    tommi
    [OP]
    Active Member

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    I work full time and in February 2017 I started doing some e-commerce selling on Amazon. Started out slow but as I learned what brought huge ROI, I started to focus in on those particular items.

    Fast forward to today I have just over $35k in sales in 7 months. Nothing super substantial, but I can scale it up big time and would expect closer to $80k-ish next year. Problem is, I really didn't expect things to go this well. I haven't been keeping the best records. I have a handful of receipts/invoices for the products I've been selling and a some handwritten receipts.

    I am becoming concerned now re: income taxes. Also, now that I have reached the $35k in sales, I apparently must register my account to start collecting GST/HST.

    I imagine that I should also register a business name and a sole proprietorship license or whatever? And then at what point can I start writing off business expenses? I have not kept physical receipts for things like fuel, but would be able to obviously provide paperwork for things like utilities, etc.

    I also wonder how CRA will compute my NET income for this. My sales are $35k but of course that is not my "take-home". There is my cost for the product, (which is a fair amount in handwritten receipts in a receipt book --- is this good enough?), there is the fees I am charged, etc etc.

    Should I talk to an accountant? bookkeeper? Recommendations for a small business accountant? I can keep better records going forward, but I never expected it to become quite so profitable until now it's too late and I don't have great records.
     
  2. Pinkette

    Active Member

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    Absolutely talk to an accountant. The same thing happened for me this year where a side hustle ended up doing far better than projected. I've decided to just let a professional handle it once I started looking into everything because it's incredibly complicated unless you have the time and energy to learn everything between now and tax season.

    Keep receipts for literally everything. Buy something for two dollars that's buisness related? Keep the receipt because honestly that stuff starts to add up.

    My stuff isn't sales related but I'm pretty sure you only get taxed on profit and not overall sales. Which is why keeping receipts and records are so important.

    Having a registered buisness will help on taxes as well at a certain point. I'm sure someone here will have more info about what point that starts to make the most sense.
     
  3. dpwu32

    Is it summer yet?

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    Gather, keep, and track everything that you can back to when you started selling, and going forward keep EVERYTHING.

    I'm not able to recommend a personal tax accountant in NS, but do some calling around and get into one as soon a possible. I'm pretty sure amazon reports earnings to CRA over $10k, but I may be wrong on that. Do some searching, but I'd advise claiming the income either way.

    I'm in a similar situation this year, and will be claiming online income in addition to my day job income for the first time.
     
  4. Boots

    www.reality-check.ca

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    What are you selling? Are you just a middleman?
     
  5. Relentless

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    Having doen exactly what you are doing, but not wanting to spend the money on an accountant, heed their advice and get one. Also incorporate.
     

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