Uber drivers often unaware of tax obligations
Income tax, GST/HST and company’s commission cut deep into drivers’ take-home pay
March 16, 2016 – It’s been said there’s no such thing as a free ride and, at tax time, that’s as true for Uber drivers as it is for their passengers.
The controversial app-based ride-hailing service, and its competitor Lyft, are a source of income for tens of thousands of Canadians. But some of them are operating under some misconceptions, tax experts say.
The most common misconception is that their earnings are tax-free.
“And that’s obviously not true,” says Allan Madan, who heads a small accounting firm in Mississauga, Ont.
Drivers must report their earnings, as well as fill out and include Form T2125 with their personal tax returns. And if they made more than $30,000 on the road during the year, they must register with the CRA to charge GST/HST.
Getting the paperwork right is one of the biggest challenges faced by Uber drivers, according to Madan, because they’re often new to the responsibilities of self-employment.
“They may not necessarily be business people with exposure to business taxes,” he says. “They need education on their filing requirements, on what they can claim and what their obligations are to the CRA.
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Source: CBC News