Understanding Tax Return Line 13500:
Business Income for Self-Employment” Line 13500 on the tax return, previously known as line 135, pertains to self-employment income for the tax year. This line reflects any income from professional, trade, or other profitable activities, and replaced line 135 after the CRA modified the T1 General form. It’s essential to differentiate business income from employment income, as the former applies to self-employment.
Overview of the T1 General Form for Canadian Income Tax Return
The T1 General Form, also known as the Income Tax and Benefit Return, is used by Canadians to file their income taxes. It serves as a summary of various other forms and includes information such as provincial or territorial tax (excluding Quebec), total income, net income, tax payable, deductions, non-refundable credits, and more. In addition to filing income taxes, the form is also used to apply for government benefits like the Canada Child Benefit and refundable credits such as the GST/HST tax credit.
What are the consequences of not reporting my business on my taxes?
Failing to report your business income to the Canadian Revenue Agency can result in penalties. The penalties can be as high as 50% of the amount that you neglected to report, with a maximum penalty of 10%. The best way to avoid these penalties is to be honest and transparent. In some cases, penalties may be reduced if you voluntarily disclose any omissions. As a self-employed business owner, you are required to complete Lines 13500 to 14300 on your income tax return. Failure to do so may result in severe fines.
Summary of Key Points Regarding Line 13500 on Tax Return
Line 13500 on the tax return refers to business income and is included in the T1 General Form, also known as the Income Tax and Benefit Return, used by Canadians to file their income taxes. It details any self-employment income for the 2019 tax year and is distinct from employment income. Certain unique businesses may have their own designated line on the CRA form. Failing to disclose business income can result in penalties ranging from 10% to a maximum of 50% of the undeclared amount.