Personal Finance

Taxes on Self-Employed with low income

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  • Feb 1st, 2013 3:11 pm
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Newbie
Apr 13, 2009
11 posts
2 upvotes
Ontario

Taxes on Self-Employed with low income

I am self-employed (commission income from Internet advertising) and doing up a mock income tax return using TurboTax 2012 to see how much more tax to pay in the next several months. I pay a bit here and there during the year, then a lump sum come tax return time.

I think I am doing something wrong cuz it shows a 'refund' this time around, and I have only paid ~$500 installments in 2012. The only difference is that I made considerably less income in 2012 (less than 10k). I am also disabled at present, and get the Disability Tax Credit (DTC) on returns. Am I missing something? tx
14 replies
Deal Addict
Aug 30, 2011
3537 posts
1279 upvotes
Ottawa
If you made less than $10,000 in 2012 and get the DTC, you won't owe any tax, and will get your $500 back.
Deal Addict
Dec 29, 2011
1860 posts
370 upvotes
Vancouver
Hey, I started working from home this year, and still haven't figured out how to make tax payments. How do you send the gov payments? Also, how do you know how much to send? Thanks
Deal Addict
Aug 30, 2011
3537 posts
1279 upvotes
Ottawa
mofesto wrote: Hey, I started working from home this year, and still haven't figured out how to make tax payments. How do you send the gov payments? Also, how do you know how much to send? Thanks
You probably won't have to for 2013, if you didn't pay much in taxes in 2011 or 2012. Answer the questions on this link http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... 1-eng.html

If you want to make payments (so that you don't end up with a big bill) read this ...http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... k-eng.html Re: how much to send, that's harder to answer. If you're not required to pay instalments, you can pre-pay as much as you want, but without knowing your 2013 income, that's going to be harder to figure.
Deal Guru
User avatar
Oct 24, 2012
11641 posts
2620 upvotes
Montreal
To keep is simple, just so you know you aren't messing up in Turbotax, try this simple calculator.

Punch in the income you want to declare *wink* and it will give you how much taxes you should/will pay. Deduct any tax you already paid from the total.

Note: If you really are declaring less than 10k$, then you should pay 0$ taxes (except manitoba) and you get a refund because you paid taxes you shouldn't have (those two 500$ instalments).
Deal Guru
User avatar
Oct 24, 2012
11641 posts
2620 upvotes
Montreal
mofesto wrote: Hey, I started working from home this year, and still haven't figured out how to make tax payments. How do you send the gov payments? Also, how do you know how much to send? Thanks
If you complete the tax forms, you'll get the amount you need to pay. The forms will also give instructions as to methods of payment.
Deal Addict
Dec 29, 2011
1860 posts
370 upvotes
Vancouver
alkizmo wrote: If you complete the tax forms, you'll get the amount you need to pay. The forms will also give instructions as to methods of payment.
But that's at the end of the yeah, right?

I'm working as a self-employed programmer. I heard somewhere that means I have to make payments in installments every 4 months or so, does that sound about right? So I would have to use this "My Payment" website to send them payments, even before the filing my taxes in 2014 (for 2013).
Newbie
Dec 15, 2011
56 posts
3 upvotes
Toronto
oldzy wrote: I am self-employed (commission income from Internet advertising) and doing up a mock income tax return using TurboTax 2012 to see how much more tax to pay in the next several months. I pay a bit here and there during the year, then a lump sum come tax return time.

I think I am doing something wrong cuz it shows a 'refund' this time around, and I have only paid ~$500 installments in 2012. The only difference is that I made considerably less income in 2012 (less than 10k). I am also disabled at present, and get the Disability Tax Credit (DTC) on returns. Am I missing something? tx
Because you are working and have a disability, you may be also eligible for disability supplement

http://www.cra-arc.gc.ca/bnfts/wtb/fq_q ... ng.html#q3
Deal Fanatic
User avatar
Jan 27, 2007
5116 posts
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T.
OttawaGardener wrote: If you made less than $10,000 in 2012 and get the DTC, you won't owe any tax, and will get your $500 back.
True with respect to income tax, but he won't get the $500 back as he has to pay 10% CPP premium on every dollar over $3,500. The amount of CPP premiums owing will be offset by the $500 in tax deducted. So on earnings of $10,000, there will be approximately $650 in CPP premiums owed. So on a net basis, OP will owe $150 when he files.


Edit - DTC does not offset CPP premiums owing to my knowledge either.
[QUOTE]I know you are, but what am I.... ;) [/QUOTE]
Newbie
Apr 13, 2009
11 posts
2 upvotes
Ontario
Thanks for all the info. If I deselect the DTC option, refund drops a bit. Then when I deselect the WITB option (WITB disability supplement option was selected automatically), then a balance of just over $100 is owing.
Deal Addict
Aug 30, 2011
3537 posts
1279 upvotes
Ottawa
oldzy, I agree with ccyk and dutchca that CPP will be owing -- I should have thought of that.
Deal Addict
Aug 30, 2011
3537 posts
1279 upvotes
Ottawa
mofesto wrote: But that's at the end of the yeah, right?

I'm working as a self-employed programmer. I heard somewhere that means I have to make payments in installments every 4 months or so, does that sound about right? So I would have to use this "My Payment" website to send them payments, even before the filing my taxes in 2014 (for 2013).
mofesto, read my previous post to you. I think alkizmo misunderstood your query.
Newbie
Nov 19, 2010
97 posts
21 upvotes
Edmonton
I personally like this calculator.

http://www.taxtips.ca/calculators/taxcalculator.htm

Based on your income, you will only have to pay a 9.9% CPP on income over $3,500 (which is $644).

I think you will get a refund from the WITB (if you are eligible) and, as Matrix786 mentioned, you might be eligible for a disability supplement.

On an related note, be aware that as self-employed you are able to claim expenses for your business (phone, rent, materials, printers, fees, etc. or portions of those used for business purpose) when calculating your net income. This might further reduce your CPP amounts owed.
Deal Addict
Apr 2, 2007
1423 posts
64 upvotes
Toronto
mofesto wrote: Hey, I started working from home this year, and still haven't figured out how to make tax payments. How do you send the gov payments? Also, how do you know how much to send? Thanks
http://www.cra-arc.gc.ca/mypayment/

Login to your account if you have one and it will show you your balance owing

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