Creative side-hustles and passion projects are on the rise for Canadians as they find new ways to stay afloat in the cost-of-living crisis, and many are overlooking filing their taxes.
According to a new survey by H&R Block Canada on Thursday, 44 per cent of Canadian gig workers would risk the consequences of not claiming all their income while filing their taxes this year.
Eighty-five per cent of Canadians believe their primary sources of income are not holding up against the pace of inflation. As a result, 20 per cent took on gig jobs to increase their earnings within the last 12 months.
Twenty-three per cent of gig workers say they have not grasped how to file additional income during tax season. Seventy-four per cent of Canadian gig workers receive earnings outside of their primary employment, and 26 per cent report it as their only income source.
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“The survey indicates that many Canadians feel tempted to avoid declaring all their income from a side gig, and many lack an understanding of the tax implications,” said Yannick Lemay, learning program lead and tax specialist for H&R Block Canada, in a news release.
“While it’s easy to think that smaller amounts may go unnoticed, by not declaring all income to the Canada Revenue Agency (CRA), Canadians face the risk of not just having to pony up for the full amount of taxes owing if they’re audited – but they’ll also be charged interest and could face substantial penalties if it’s discovered,” he continued.
H&R Block urges gig workers to track all incomes and expenses in detail, and to fill taxes to understand the provincial and territorial tax credits and benefits to which you are entitled.
CRA takes failure to report all income seriously, and failure to do so may lead to potentially substantial penalties.
This study was based on 1,501 Canadian members of the Angus Reid Forum surveyed from Feb. 14 to 16, 2023. The margin of error was plus or minus two and a half percentage points, with a confidence level of 95 per cent.
