# Income earned from the internet



## DoubleG (Mar 10, 2012)

Hello,

I am new to the forums and taxation and was hoping you could provide me some guidelines regarding the following case: 

A person is a full-time student with no employment income at all. Their income (roughly $15,000) is from their website advertisements (google-ads) and sale of self-produced software.

My understanding is that this person is deemed to be self-employed. They have to file a T1 and show employment income of 0 but business income of $15,000 (note that this is not a registered business - no business number nor government paperwork was done).

Is it correct to report it as business income? Or is it Other Employment Income? If it is business income, do I use the T2125 form?

Lastly, about CPP, I understand that for self-employed, EI is optional but these individuals must report employee/employer CPP portions. Do I calculate it with 4.95% on NITP and put it in the T1? 

Thank you.


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## ghostryder (Apr 5, 2009)

DoubleG said:


> Is it correct to report it as business income? Or is it Other Employment Income? If it is business income, do I use the T2125 form?


Yes, no, yes.



DoubleG said:


> Do I calculate it with 4.95% on NITP and put it in the T1?


Use schedule 8.


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## Jungle (Feb 17, 2010)

$15K from add sense sounds nice, how long did it take you to build up to that?


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## Sustainable PF (Nov 5, 2010)

Jungle said:


> $15K from add sense sounds nice, how long did it take you to build up to that?


No kidding! Our site doesn't see 10% of that.

One other note about income is the $30k mark where you need to pay the GST/HST. I haven't figured that out yet (don't need to!) but it is a bench mark to be aware of.


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## DoubleG (Mar 10, 2012)

Thank you very much Ghostryder and Sustainable PF. I will use the T2125 form and Schedule 8 for CPP. I will work on this over the weekend. 

(If anyone else stumbles on this, CRA's T4002 guide is quite helpful).

Regarding revenue, it's mostly from sales rather than the ads. 



DoubleG said:


> Their income (roughly $15,000) is from their website advertisements (google-ads) and *sale of self-produced software.*


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