If you’re diving into the world of side hustles, like selling quirky crafts on Etsy or delivering tasty treats with UberEats, you might be wondering when the Canada Revenue Agency (CRA) starts to take notice of your extra cash flow. Let’s break it down like a plot twist in a rom-com: it’s not as complicated as it seems, and knowing the rules can save you from unexpected drama down the line.

First things first, the CRA generally wants to know about your side hustle income if it’s more than $1,000 in a calendar year. That’s right, if you’re raking in a little extra on the side—think of it like your personal version of a superhero origin story—once you hit that threshold, it’s time to report it. This doesn’t mean you owe taxes on every single dollar you make, but it does mean you have to tell the CRA about your earnings.

So, what happens if you earn less than $1,000? The CRA might not come knocking at your door with a tax return in hand, but it’s still smart to keep track of your income and expenses. Consider it your financial diary, where you jot down everything from the glitter for your handmade earrings to those late-night snacks while you’re driving for UberEats. You could be sitting on a treasure trove of deductions that could lower your taxable income if you ever hit that $1,000 mark.

Now, let’s talk about what happens when you do cross that magical threshold. You’ll want to report your income on your tax return, and it’s generally classified as business income. This means you’ll have a chance to deduct any legitimate expenses related to your side hustle, which can help lower your overall tax bill. It’s like getting a backstage pass to your own earnings; you get to see what really counts.

When you report your income, it’s essential to have a clear picture of what you’ve brought in and what you’ve spent. Think of it as organizing your comic book collection; you want to know what you have, so you can make informed decisions about future purchases. Keeping good records not only helps with your taxes but also gives you insights into how to grow your side hustle further.

As you dive deeper into this side hustle journey, remember that the CRA wants you to succeed. They encourage entrepreneurship, so don’t shy away from exploring your creative side or picking up those extra shifts. Just keep in mind that honesty is key. If you’re unsure about how to report your income or what qualifies as an expense, consulting a tax professional is like having a trusty sidekick at your side, guiding you through the complexities of the tax world.

In summary, once your side hustle income exceeds $1,000, the CRA expects you to report it. Until then, keep those records tidy and enjoy the ride. Whether you’re delivering meals or crafting one-of-a-kind items, just remember that every dollar counts—and with a bit of planning and awareness, you can turn that side hustle into something truly rewarding.