With a CRA strike impending it may seem like a strange time for an article about tax avoidance/evasion but it’s timeless advice, a strike will only delay, not prevent a reassessment for hidden side hustle income:
“Soucie offered a hypothetical. Let’s imagine that a side-hustler — let’s call him Kevin — chooses (to) hide $10,000 of income, and his marginal rate is 30 percent.
Kevin would owe $3,000 in tax on the unreported income, plus a penalty based on the “intent” of the misfiling. If it was a mistake, Kevin would have to pay a 10 per cent, or $1,000 penalty, but if the Canada Revenue Agency finds it was deliberate, the agency would hit him with a 50 per cent, or $5000 penalty, instead.
Then, the CRA would charge Kevin five per cent interest on the $3,000 of unpaid tax.
This means that Kevin could owe roughly $4,600 — or $9,200 in total — depending on the intent of the misfiling. But this the extent of the CRA’s leniency. Tax evasion, in full or in part, is a criminal offence, said Krishna. “The law requires one to declare all of one’s income, whether it is from your main hustle or your side hustle or from your legal hustle or from your illegal hustle,” he said.”
If you receive a reassessment for tax on undeclared income let a ZheroTax expert help you determine your chances of a successful appeal and take it on contingency for a % of the tax they will save you.