But what exactly goes in total of lyft ?
Also do we have to add HST to the total income ? in Turbotax it says including HST/GST but then on GST/HST return it says not to include HST in 101. How will they match if on income tax i have to add HST and not on GST/HST return ?
Sorry it is so confusing :frown: The youtube video use an old version of Turbotax without HST in total income
Line 101 is your total business revenue, including your uber commissions added. A fare has several components in it; such as booking fee, uber's cut, your cut, tip, third party fees like 407 usage, pearson airport fee and lastly the HST etc. This Line 101, you add all that up and put the value you get in that box. That's what a gross business revenue is.
For example, if a rider request a ride and it cost him $30. That's what you'll put in your Line 101. As you know, in that $30, there are flat fees like booking and stuff which will be taken out before splitting it 75/25 with Uber. But $30 is the one you put, It'll also include the HST of the sales.
Then in the box below in HST box, you'll enter the amount of HST on that $30. In this case, it'll be $3.9. Here I just did a 13% of the $30 of the fare but this doesn't always work. Because if the rider tipped you $5. Your total revenue (aka Line 101) now will be $35 but the HST collected is still $3.9.
After you enter both the total revenue and HST collected in TurboTax, you'll see in the end how much of your income is taxable.
A simple example:
Total year end revenue: $50,000
If, out of that, $4,500 is HST collected. Then TurboTax will do 50,000 - 4,500 = $45,500 as the taxable income. But this is an over simplified example. And like I said, that revenue includes all other stuff you've generated through Uber including their portions of the fees and other third party fees like pearson fees.
- So a more realistic value could be, after all that deductions, the $50,000 revenue could come down to $25,000 ish. Here, you can even deduct more business expenses such as your car loan or lease payments, your car insurance etc. If those two items were $10,000 total in the whole year, you'll be left with $15,000. Let's say there's nothing else you can deduct business-wise. That would be considered your taxable income from this business. But that's not the final. TurboTax will guide you through many other stuff you can qualified for deductions based on where you live and your unique living condition. After everything is deducted, then you'll see your taxable income. This final taxable income is your Line 150.
And when you remit HST
You take that $4,500 that you've "collected" and deducted the HST you've spent in business related expenses such as gas.
So let's say you spent $3,000 in gas total for the year for personal and ubering combined. And if you use your car 75% of the time for ubering (you'll determine this based on the kilometer usage)
So 13% of $3,000 is $390.
75% of $390 is $292.50.
You go back to your HST collected amount and deduct that HST from gas expense.
So you do $4,500 - $292.50 = $4207.50
Now you have to remit $4,207.50
. You see how this HST number is different from the HST number you had to put in the TurboTax (which was $4,500)? That's why you're told not to put the HST from TurboTax because you have yet stuff to deduct from it before remitting to the CRA.
You do the same calculation for every business related expenses you've incurred during the year. And that $4,207.50 should go down even more. But if it goes down below $0 or even in the negative, that means you've spent more that year than you've made. This is a possible scenario and doesn't necessarily mean you did something wrong.
For example, someone started late in December and had to buy winter season, dash cam set, and a few other accessories to start off driving Uber. This person probably spent $2000+ for business related and only worked 1 month of 2019. So the HST remittance for this person would likely be in the negative values.
All of these are very hard to keep track of. So if you're serious about doing these things properly, try to make a book keeping system, a spreadsheet or some sort. So you can see the values in one view and can understand better as you get more experience. In the end you'll have a good understand of it.
Edit: I kinda used pseudo math in all the calculations because I'm lazy to get the correct numbers but the idea is still the same.