Taxes for Side Hustlers in Canada (Education Only)

01

Your side hustle and your tax return

In simple words

If you sell lemonade, the money you make is part of what you earned this year. At tax time, you tell the government how much you earned and how much the lemons and cups cost. Then tax is worked out on what was left.

Key facts

Money from a side hustle (selling things you make, freelancing, content creation, tutoring, delivery, reselling and so on) is generally income that must be reported if it is a business.
The CRA encourages self-employed people to use Form T2125, Statement of Business or Professional Activities, to report business or professional income and expenses. It helps you calculate gross income and net income.
If you have both business and professional income, you complete a separate T2125 for each.
The CRA's main guide for this is Guide T4002 (Self-employed Business, Professional, Commission, Farming, and Fishing Income).
You are taxed on your net income: income minus allowable expenses.
Free products or perks received for promotion can also count as income (see course 2.10 for sponsorships).

Step by step

List every way you earned money this year from your side hustle, such as sales, freelancing or tutoring.
Open the CRA page for Form T2125, Statement of Business or Professional Activities, and the guide T4002.
Write your total income from the side hustle.
Subtract allowable expenses to find your net income.
Note any free products or perks you received for promotion, which can count as income.
Check: you can say which form you will use and what your net income is.

LESSON 01Your side hustle and your tax return

LESSON 01 / ANIMATED LESSON / AI VOICE00:00 / 01:00

Voice

Read the video script

[Host] "Got a side hustle in Canada? Here's the first tax thing to know."
[Text on screen: Form T2125] "Business income and expenses usually go on a form called T2125."
[Text on screen: income - expenses = net income] "You report what you earned, minus allowed expenses. Tax is based on what's left."
[Screen: CRA Guide T4002 cover page] "The CRA guide that explains it all is called T4002."
[Host] "We'll keep it simple. But for your own return, talk to an accountant."

Try it now

List every way you earned money outside a regular job in the past 12 months. Next to each, write the approximate total. This is your starting income list.

ClaudeStuck? Copy a ready-made prompt for Claude

Copy this, open Claude, paste it, and Claude will walk you through the lesson step by step.

For a grown-up: Claude is for adults (18+). Copy this, paste it into Claude, and use the answer to explain the lesson to your child.

I'm learning "Taxes for Side Hustlers in Canada (Education Only)" on The Future Market. Lesson 1: "Your side hustle and your tax return".

What the lesson teaches:
- Money from a side hustle (selling things you make, freelancing, content creation, tutoring, delivery, reselling and so on) is generally income that must be reported if it is a business.
- The CRA encourages self-employed people to use Form T2125, Statement of Business or Professional Activities, to report business or professional income and expenses. It helps you calculate gross income and net income.
- If you have both business and professional income, you complete a separate T2125 for each.
- The CRA's main guide for this is Guide T4002 (Self-employed Business, Professional, Commission, Farming, and Fishing Income).
- You are taxed on your net income: income minus allowable expenses.
- Free products or perks received for promotion can also count as income (see course 2.10 for sponsorships).

The exercise I'm working on:
List every way you earned money outside a regular job in the past 12 months. Next to each, write the approximate total. This is your starting income list.

I'm stuck. Please:
1. Explain the main idea in plain, simple words with one everyday example.
2. Walk me through the exercise one small step at a time. Ask me what I've done so far before giving the next step.
3. Don't just give me the final answer. Help me do it myself, and check my work when I share it.
4. This is for learning only. Remind me to check with a licensed professional before I make a real decision about my own money, health or legal situation.

I'm a parent helping my child (about 8 years old) with a lesson called "Your side hustle and your tax return" from the course "Taxes for Side Hustlers in Canada (Education Only)".

Here's what the lesson says:
If you sell lemonade, the money you make is part of what you earned this year. At tax time, you tell the government how much you earned and how much the lemons and cups cost. Then tax is worked out on what was left.

The activity:
List every way you earned money outside a regular job in the past 12 months. Next to each, write the approximate total. This is your starting income list.

Please explain this so an 8-year-old understands: short sentences, a fun everyday example, and no hard words.
Then give me 3 simple questions I can ask my child to check they understood, and a way to do the activity together, one tiny step at a time.
Keep it general and educational. This is not advice for a real situation.

Open Claude

Sources

CRA, Report business income and expenses: www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-pr
CRA, Completing Form T2125: www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-pr
CRA, Guide T4002: www.canada.ca/en/revenue-agency/services/forms-publications/publicatio

My notes

I learned this

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