Foreign income as CA self-employment income?

hello_image1978 · Post by **hello_image1978** » Tue Feb 03, 2009 2:01 pm

I apologize in advance if this is a stupid question, but this is my first self-employed year.

I do contract consulting work with one U.S.-based company out of my home. They have filed a 1099 miscellaneous income form for me for the fees they paid me (in U.S. currency) for 2008. I was a full-year Canadian permanent resident in 2008.

When I file my T2125 form for Canada, do I just use the 1099 miscellaneous income form as a receipt for my consulting fees? Then, I assume I'd just convert it to CA currency using the average 2008 rate given by the Bank of Canada (http://www.bankofcanada.ca/pdf/nraa08.pdf)? And that would be my professional income?

Or, do I just call it all foreign income (along with the 1099s I have for the interest I've earned from my savings accounts held in U.S. banks)?

Thanks, and sorry for my ignorance.

nelsona · Post by **nelsona** » Tue Feb 03, 2009 2:16 pm

Well, its professional income, so must be treated as such. Report on line 135 or 137 depending on the type of business you have. You'll need to pay CPP on it just like if it was earned in canada

Its foreign, as is your US bank , but since there was no US tax withheld, and there is no US tax to pay. it doesn't really matter what its source is -- there is no foreign tax credit to take.

nelsona · Post by **nelsona** » Tue Feb 03, 2009 2:20 pm

... and in general, foeign income, which all must be reported, is reported on the same line as it would be if it was earned in canada.

All figures on a Cdn return are in cdn dollars.

hello_image1978 · Post by **hello_image1978** » Tue Feb 03, 2009 3:41 pm

Just making sure I'm putting my income in the right place. Thanks!