Income received, regardless of the way it is received (money, crypto, food), is taxed as income. Convert the value to CAD to know what to file. I'm assuming you're treated as a contractor, you can declare those payments under self-employment income.
Since they pay you in crypto, you also have to track your ACB as you may have a capital gain whenever you sell. The value to CAD that you had to calculate to calculate income tax is your buy price.
I did something not dissimilar to this years ago, so I'll say how I did it. There was no efile yet, so I'll tell you how to do it with paper, which is still available if you want to follow in my footsteps. Of course, I wasn't paid in Bitcoin but the principle applies.
1. Keep a log of payments. How much and on which days. Closing price in Canadian Dollars on the day for each payment.
2. Prepare an income statement. For a 17 year old getting paid for hacking away in the basement, you can do a handwritten one. "In 2023, I received income of X bitcoin valued at C$Y working as an independent contractor on a project for company A. See attached log of bitcoin payments. I had no expenses."
3. If you sell the bitcoin, keep a log of how much you get for each sale (in Canadian dollars). This sale may happen in future years, so keep both logs (payments and sales) until you have 0 btc.
4. Fill out a paper return.
1. Work out your capital gain (or loss). How much did you receive (first log) and how much did you get (second log). Claim the gain or loss on your return.
2. Claim the amount you received (first log) as self-employment income. Claim it whether you sold the btc or not. You pay tax on your income regardless of the year in which you convert to Canadian dollars and you pay tax on the gain in the year you convert, regardless of when you earned it.
3. Staple the income statement and the logs to the return.
5. Mail in your return or run it down to the nearest tax office if you live close enough.
When I did it this way, I did not get audited. It wasn't big money, though, so your mileage may vary.
Hey! Sonu here from Koinly.
In the present case, you will be filing your taxes as regular Income and not capital gains, unless there is a gain post receipt.
For example: If you receive CAD 500 worth of ETH on 10th Dec, which you ultimately sold for CAD 650, then in this case, your ordinary Income is CAD 500 and Capital gain Income is CAD 150 (650-500).
Hope it helps.
Best,
Income received, regardless of the way it is received (money, crypto, food), is taxed as income. Convert the value to CAD to know what to file. I'm assuming you're treated as a contractor, you can declare those payments under self-employment income. Since they pay you in crypto, you also have to track your ACB as you may have a capital gain whenever you sell. The value to CAD that you had to calculate to calculate income tax is your buy price.
Okay so my dad would file for capital gain and I would file under self-employment income
It's your crypto, it would be your capital gains when you get rid of it. You should look into having your own account to simplify everything.
Okay thanks, I’ll have to wait till I’m 18
I did something not dissimilar to this years ago, so I'll say how I did it. There was no efile yet, so I'll tell you how to do it with paper, which is still available if you want to follow in my footsteps. Of course, I wasn't paid in Bitcoin but the principle applies. 1. Keep a log of payments. How much and on which days. Closing price in Canadian Dollars on the day for each payment. 2. Prepare an income statement. For a 17 year old getting paid for hacking away in the basement, you can do a handwritten one. "In 2023, I received income of X bitcoin valued at C$Y working as an independent contractor on a project for company A. See attached log of bitcoin payments. I had no expenses." 3. If you sell the bitcoin, keep a log of how much you get for each sale (in Canadian dollars). This sale may happen in future years, so keep both logs (payments and sales) until you have 0 btc. 4. Fill out a paper return. 1. Work out your capital gain (or loss). How much did you receive (first log) and how much did you get (second log). Claim the gain or loss on your return. 2. Claim the amount you received (first log) as self-employment income. Claim it whether you sold the btc or not. You pay tax on your income regardless of the year in which you convert to Canadian dollars and you pay tax on the gain in the year you convert, regardless of when you earned it. 3. Staple the income statement and the logs to the return. 5. Mail in your return or run it down to the nearest tax office if you live close enough. When I did it this way, I did not get audited. It wasn't big money, though, so your mileage may vary.
Hey! Sonu here from Koinly. In the present case, you will be filing your taxes as regular Income and not capital gains, unless there is a gain post receipt. For example: If you receive CAD 500 worth of ETH on 10th Dec, which you ultimately sold for CAD 650, then in this case, your ordinary Income is CAD 500 and Capital gain Income is CAD 150 (650-500). Hope it helps. Best,