Commissions

[Tami H]

If I report an amount from box 20 on my T4A (Self employed commissions).  I am an employee working whenever someone needs to book a trip, I am a travel Advisor and work for a company.  Do I need to also report this amount on a T2125 C.   I do not own the company, I only work once in a while.

 

[Geo123]

Hello Tami H,

You received a T4A slip with an amount in box 020 for the commissions you earned when self-employed. Note that this amount does not include taxes.

To enter this amount in the program, please follow the steps below:

1. On the "Left-side menu on the Interview tab", select "Interview setup".

2. On the screen that appears on the right, go to the "Pension" group, and check the box "Pension income, other income and split pension income (T4A, T4A(OAS), T4A(P), T4A-RCA, T4RSP, T4RIF, T1032)". Then, go to the "Self-employment" group and check the box "Self-employment business income". If you paid tax by instalments, go to the group "Tax paid by instalments and tax transfer" and check the box "Tax paid by instalments and tax transfer" and click "Next" at the bottom of the page.

3. Return to the "Left-side menu on the Interview tab", select "Pension income, T4A".

4.  On the page appearing to your right, click on the plus "+" icon to the right of the line "T4A - Pension, retirement, annuity and other income".

5. On the new page, enter the amount from Box 020 of the T4A slip on the line "Self-employed commissions (report this amount as a T2125 - Commission income) (RL-1 box O)", on the right field choose Box 020.

6. Thereafter, return to the "Left side menu on the Interview tab", select the item "Self-employment income" and, on the page appearing on the right, choose "T2125C - Commission income".

7. On the page "T2125 - Business identification", enter the name of the business on the line "Name of the professional business (or your own name if the business does not have one)", then enter the other information in the mandatory fields marked with a red asterisk.

8. On the field for "6-digit code from the North American Industry Classification System", enter the code that best describes your industry. If you do not know the code, click on the tool tip (the question mark) (?) next to the box to get the list.

9. On the line "Products or services and their respective percentage (%) in the total income (mandatory for a Quebec return)", in the field on the right, enter your main service or product and enter the percentage (%). If you have other products or services, click on the "plus sign +" icon on the right to generate another field.

10. Under the subsection "Income, expenses", on the page entitled "T2125 - Commission", enter the amount from Box 020 of the T4A on the line "Self-employed commissions (T4A Box 020) (Enter the total if you have more than one amount)". If you have expenses, enter them in the boxes corresponding to their description.

11. If you paid tax by instalments, return to the "Left side menu on the Interview tab", select "Instalments and tax transfers" and on the screen to your right, choose the option "Income tax paid by instalments" and enter the amounts paid to the federal government and to the Quebec government (for residents of this province).

12. For expenses, if your company is registered for the GST and HST (QST), these expenses must be entered before taxes to reflect the ITRs and ITCs that you claimed.

13. For residents of Quebec, if you wish to pay your registration fee for Quebec, return to the "Left-side menu on the Interview tab" choose the "Self-employment income" section in the screen located to your right and choose the option ''Q438 - Quebec annual registration fee for the enterprise register''.

The gross amount of commission income will be carried over to lines 13899 and the net income on line13900 of the federal return, as well as to line 154 of the Quebec return and line 25 of Quebec Schedule L, if applicable. The program will also generate federal form T2125, as well as Quebec form TP-80 if applicable.

For more information on self-employed income, please consult the following links:
For the CRA

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002.html

For Revenu Québec:

https://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/in-155-v/

[Katherine]

Hello, 

I followed the steps above to add T2125C for a self employed commission income. Do I complete the home office expenses under employment expenses section AND home office expenses under T2125C? If not which home office expense section should be used?

[Geo123]

Hello Katherine,

If using T2125C then enter it there.