Gross or Net for self employed folks
- Thread starter hybridin
- Start date
It's all about how you are using the gross vs. net definition for the purposes of being self-employed.Hey I am kind of finding conflicting info on this form: If I apply for PGP do the CIC look at my GROSS 15000 or NET 23600?
Thanks!
If are defining net as gross minus expenses, then the answer is net.
Not sure if I understand. What does CIC would like to see?It's all about how you are using the gross vs. net definition for the purposes of being self-employed.
If are defining net as gross minus expenses, then the answer is net.
I have Total Income - Deductions from total income = Net income/Taxable income
Net income / taxable income.Not sure if I understand. What does CIC would like to see?
I have Total Income - Deductions from total income = Net income/Taxable income
But they say 15000 GROSS on their official Twitter account? I am also looking through their 2020 guide and it only mentions GROSSNet income / taxable income.
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They also said line 150 which contradicts their statement. You can't trust IRCC customer service.But they say 15000 GROSS on their official Twitter account?
Well before it was just 150, and now its 15000. Same thingThey also said line 150 which contradicts their statement. You can't trust IRCC customer service.
????? Line 15000?Well before it was just 150, and now its 15000. Same thing
Also found this info from Desloges Law Group
.5.32 states as follows:
"Total income" as referred to in R133(1)(j)(i) is the total income shown on line 150 of the Notice of Assessment.
To make a long story short, Line 150 is the only relevant number we need, and thankfully no additional calculations are required in filling up the sponsor's Financial Evaluation. If you're like me and math makes your head hurt, you could stop there, but if you really want to understand why this all makes sense, please keep reading.
Line 150 on a person's tax return represents the total of Lines 101-147, representing all potential income sources, such as employment income, business income, rental income, commission income, etc. See a line by line breakdown at http://www.cra-arc.gc.ca/E/pbg/tf/5006-r/5006-r-15e.pdf
Since self-employed income is captured in lines 135-143 of a person's tax return, it is automatically captured in Line 150 and no separate calculation is needed on our side. Something important to note is that in lines 135-143, only the NET self-employed income goes toward Line 150. This means that any business deductions the person claimed have already been taken out and only the surplus goes toward Line 150.
Deductions such as RRSP contributions are reflected in Lines 206 onward, and therefore do not have to be included in "Total Income".
So to summarize, the amount which is relevant in calculating Minimum Necessary Income is limited to "Total Income" which is fully represented and pre-calculated by simply using the figure from Line 150 of the person's Notice of Assessment.
.5.32 states as follows:
"Total income" as referred to in R133(1)(j)(i) is the total income shown on line 150 of the Notice of Assessment.
To make a long story short, Line 150 is the only relevant number we need, and thankfully no additional calculations are required in filling up the sponsor's Financial Evaluation. If you're like me and math makes your head hurt, you could stop there, but if you really want to understand why this all makes sense, please keep reading.
Line 150 on a person's tax return represents the total of Lines 101-147, representing all potential income sources, such as employment income, business income, rental income, commission income, etc. See a line by line breakdown at http://www.cra-arc.gc.ca/E/pbg/tf/5006-r/5006-r-15e.pdf
Since self-employed income is captured in lines 135-143 of a person's tax return, it is automatically captured in Line 150 and no separate calculation is needed on our side. Something important to note is that in lines 135-143, only the NET self-employed income goes toward Line 150. This means that any business deductions the person claimed have already been taken out and only the surplus goes toward Line 150.
Deductions such as RRSP contributions are reflected in Lines 206 onward, and therefore do not have to be included in "Total Income".
So to summarize, the amount which is relevant in calculating Minimum Necessary Income is limited to "Total Income" which is fully represented and pre-calculated by simply using the figure from Line 150 of the person's Notice of Assessment.
Would add that EI, if you qualify and receive, would need to be deducted from line 150 in any year except 2020. As previously stated IRCC customer service is often wrong.Also found this info from Desloges Law Group
.5.32 states as follows:
"Total income" as referred to in R133(1)(j)(i) is the total income shown on line 150 of the Notice of Assessment.
To make a long story short, Line 150 is the only relevant number we need, and thankfully no additional calculations are required in filling up the sponsor's Financial Evaluation. If you're like me and math makes your head hurt, you could stop there, but if you really want to understand why this all makes sense, please keep reading.
Line 150 on a person's tax return represents the total of Lines 101-147, representing all potential income sources, such as employment income, business income, rental income, commission income, etc. See a line by line breakdown at http://www.cra-arc.gc.ca/E/pbg/tf/5006-r/5006-r-15e.pdf
Since self-employed income is captured in lines 135-143 of a person's tax return, it is automatically captured in Line 150 and no separate calculation is needed on our side. Something important to note is that in lines 135-143, only the NET self-employed income goes toward Line 150. This means that any business deductions the person claimed have already been taken out and only the surplus goes toward Line 150.
Deductions such as RRSP contributions are reflected in Lines 206 onward, and therefore do not have to be included in "Total Income".
So to summarize, the amount which is relevant in calculating Minimum Necessary Income is limited to "Total Income" which is fully represented and pre-calculated by simply using the figure from Line 150 of the person's Notice of Assessment.