How to report Canadian income from a small contract job?
"It's pretty easy. In the Interview Setup for Ufile, check the box for ""Self-employment business income"". Then during the process of filling everything out, you'll get a Self-Employment screen. It'll ask for the name of your business, but just put your own name since you don't have one. For the 6-digit classification code, click the ? button and look through the list for the industry that best matches the one for whom you wrote the technical report. Or you can go with 711500: Independent artists, writers and performers. It doesn't really matter that much so don't worry if it's a poor match. It will also ask you for your income and expenses.   I don't know exactly what costs you might have incurred to write your report, but you can likely claim a very tiny amount of ""home office"" expenses. Costs like rent (or mortgage interest + property tax), utilities, and home insurance can be claimed, but they have to be pro-rated for the time you were actually doing the work, and are based on the amount of space you used for the work.  For example, if you paid $1000 rent and $200 utilities for the month in which the work was done, and it took you 20 of the 31 days in that month to actually do the work, and you used a room that makes up about 10% of the square footage of your home, then you can claim: $1200 * 20/31 * 0.1 = $77.42 for your home office expenses. If you also used that room for non-business purposes during that time, then you reduce it even further. Say, if the room was also used for playing video games 50% of the time, then you'd only claim $38.71"
"If you are in the US, you legally must file taxes on any income whatsoever.  How much you will pay in taxes, if any, will depend on your total taxable income. Now, for small transactions, the payments are often not reported to the IRS so some people do not file or pay.  The threshold at which they payer is required to send a 1099 to the IRS is $600.  Patreon considers each donation a separate transaction and therefore does not send a 1099 to the IRS unless you make more than $20,000 in a calendar year.  If they do not report it, the IRS will not know about it unless they audit you or something.  However, you are technically and legally responsible to report income whether the IRS knows about it or not. -------- EDIT ------- Note that the payer files a 1099, not the recipient. In order to report your patreon income you will either use schedule C or add it to the amount on 1040 line 21 (""other income"") depending on whether you consider this a business or a hobby.  If it's a business and it's a lot of money you should consider sending in quarterly payments using a 1040-ES in order to avoid a penalty for too little withholding." Yes, you did. To give an example of the contract terms that allow this, the [Capital One credit card agreement](https://www.capitalone.com/media/doc/credit-cards/Credit-Card-Agreement-for-Consumer-Cards-in-Capital-One-N.A.pdf) states:  &gt; Credit Reports &gt;  &gt; We may report information about your Account to credit bureaus and others. Late payments, missed payments, or other defaults on your Account may be reflected in your credit report. Information we provide may appear on your and the Authorized Users’ credit reports. &gt; &gt; If you believe that we have reported inaccurate information about your Account to a credit bureau or other consumer reporting agency, notify us in writing at PO Box 30281, Salt Lake City, UT 84130-0281. When you write, tell us the specific information that you believe is incorrect and why you believe it is incorrect. &gt; &gt; We may obtain and use credit, income and other information about you from credit bureaus and others as the law allows. @JoeTaxpayer's answer outlines how to value it. Some other considerations: As I understand it, some public pensions may be tax-free if you still live in the state that is paying the pension. E.g. when a Massachusetts teacher receives pension, it is exempt from state taxes, but if that person moves to Vermont he will have to pay Vermont income tax on those payments. So if you plan to stay in the state post-retirement, this provides additional value. Pension payments aren't fully guaranteed by the PBGC. And not all pension plans are fully funded. Depending on the political and economic environment when you hit retirement, your retirement plan could suffer. (And if you aren't working, you may not have a union vote any more when the other working members are voting on contract amendments that affect pensions.) I'm not certain of all of the rules, but I hear news reports from time to time that formulas like what you've posted in the original question are changed through negotiation with the union. If you make an employment decision using the formula in year X and then the formula changes in year X+10, your expected pension payment will change. Canadian here: the US is our biggest customer, so we were impacted economically. I expected that within a year or two of the US housing collapse, we would also be hit, but something else happened: when the US dropped interest rates like a stone, we were also forced to drop interest rates. This meant that suddenly, money was being handed out for very very cheap, so cheap it was almost free if you had a decent job and good credit. The housing market here paused for a brief moment, and then continued climbing. It never stopped until some new rules were implemented, aimed mostly at foreign buyers and investors, and put in place this year. It appears however that this current drop in prices may be a temporary dip. The average cost of a home in Toronto is still around $1m CAD, and our real estate is still among the most expensive in the world if you look at how much we pay compared to our incomes.  In some places, houses have basically tripled over the past decade.  My point here is that Canadian home owners were not impacted negatively by the 2008 crisis. In fact, once the free money started flowing and prices went up accordingly, Canadian home owners were enriched as a direct result of the 2008 US housing crisis. The situation is clearly unsustainable, and the market is irrational. It's easy to say that we are in a bubble but it is  impossible to tell when it will crash. In Canada, it's harder to walk away from mortgage debt; if you're underwater on your home, and the bank forecloses on you and sells the house for less than you owe, you still owe the bank the remainder of the money (in most provinces). "Chris, Joe's table helps.  but think this way:  there are two ways you can pay the taxes for your side-gig:  either you can send a check quarterly to the Feds, OR, you can overwithhold at your real job to cover taxes at your sidegig.  I'd do this in ""arrears"" -- after you get your first paycheck from sidegig, then adjust your real job's withholding. Except (and Joe neglected this), you're still responsible for Social Security / Medicare Tax from your sidegig.  I suspect your income at real-job is high enough that you stop paying Social Security Tax, so at least at this time of year you won't be subject to 15.4% Social Security Tax.  However, that's NOT true for the 2.9% Medicare Tax.  Remember that because you're an independent contractor being payed without withholding, YOU are responsible not only for the Medicare (and Social Security) taxes you'd be responsible for if a regular employee, but you're also responsible for what your employer's share as well." "There are way too many details missing to be able to give you an accurate answer, and it would be too localized in terms of time & location anyway -- the rules change every year, and your local taxes make the answer useless to other people. Instead, here's how to figure out the answer for yourself. Use a tax estimate calculator to get a ballpark figure. (And keep in mind that these only provide estimates, because there are still a lot of variables that are only considered when you're actually filling out your real tax return.) There are a number of calculators if you search for something like ""tax estimator calculator"", some are more sophisticated than others. (Fair warning: I used several of these and they told me a range of $2k - $25k worth of taxes owed for a situation like yours.) Here's an estimator from TurboTax -- it's handy because it lets you enter business income. When I plug in $140K ($70 * 40 hours * 50 weeks) for business income in 2010, married filing jointly, no spouse income, and 4 dependents, I get $30K owed in federal taxes. (That doesn't include local taxes, any itemized deductions you might be eligible for, IRA deductions, etc. You may also be able to claim some expenses as business deductions that will reduce your taxable business income.) So you'd net $110K after taxes, or about $55/hour ($110k / 50 / 40). Of course, you could get an answer from the calculator, and Congress could change the rules midway through the year -- you might come out better or worse, depending on the nature of the rule changes... that's why I stress that it's an estimate. If you take the job, don't forget to make estimated tax payments! Edit: (some additional info) If you plan on doing this on an ongoing basis (i.e. you are going into business as a contractor for this line of work), there are some tax shelters that you can take advantage of. Most of these won't be worth doing if you are only going to be doing contract work for a short period of time (1-2 years). These may or may not all be applicable to you. And do your research into these areas before diving in, I'm just scratching the surface in the notes below." "Journal entry into Books of company: 100 dr. expense a/c 1 200 dr. expense a/c 2 300 dr. expanse a/c 3   //   cr. your name 600 Each expense actually could be a total if you don´t want to itemise, to save time if you totaled them on a paper.  The paper is essentually an invoice. And the recipts are the primary documents. Entry into Your journal: dr. Company name   // cr. cash or bank You want the company to settle at any time the balce is totaled for your name in the company books and the company name in your books.  They should be equal and the payment reverses it.  Or, just partially pay. Company journal: dr. your name  //  cr. cash or bank your journal: dr. cash or bank  // cr. company name Look up ""personal accounts"" for the reasoning. Here is some thing on personal accounts. https://books.google.com/books?id=LhPMCgAAQBAJ&pg=PT4&dq=%22personal+account%22+double+entry&hl=es-419&sa=X&redir_esc=y#v=onepage&q=%22personal%20account%22%20double%20entry&f=false" "The difference between the provincial/territorial low and high corporate income tax rates is clear if you read through the page you linked: Lower rate The lower rate applies to the income eligible for the federal small   business deduction. One component of the small business deduction is   the business limit. Some provinces or territories choose to use the   federal business limit. Others establish their own business limit. Higher rate The higher rate applies to all other income.    [emphasis mine] Essentially, you pay the lower rate only if your income qualifies for the federal small business deduction (SBD).  If you then followed the small business deduction link in the same page, you'd find the SBD page describing ""active business income"" from a business carried on in Canada as qualifying for the small business deduction.  If your corporation is an investment vehicle realizing passive investment income, generally that isn't considered ""active business income."" Determining if your business qualifies for the SBD isn't trivial — it depends on the nature of your business and the kind and amount of income it generates.  Talk to a qualified corporate tax accountant. If you're looking at doing IT contracting, also pay close attention to the definition of ""personal services business"", which wouldn't qualify for the SBD.  Your accountant should be able to advise you how best to conduct your business in order to qualify for the SBD.  Don't have a good accountant?  Get one.  I wouldn't operate as an incorporated IT contractor without one. I'll also note that the federal rate you would pay would also differ based on whether or not you qualified for the SBD.  (15% if you didn't qualify, vs. 11% if you qualify.)   The combined corporate income tax rate for a Canadian-controlled private corporation in Ontario that does qualify for the small business deduction would be 11% + 4.5% = 15.5% (in 2013). Additional reading:"