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  1. #1
    New Member
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    Jul 2008
    Southwestern Ontario
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    Default Income spliting?

    HB is sole prop. and I do all of the bookwork. Can I say that he paid me $xxx and claim that I made $xxx amount, even though I never actually recieved a cheque from him? Or do I need the paper trail?


  2. #2
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    strongmommy's Avatar
    Join Date
    Sep 2006
    Old North
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    Hi there

    Short answer is yes - but to be employment wages you should have withheld and remitted tax and CPP and now the remittances would be late and subject to penalty and interest.

    You can consider yourself self employed and include the fee on your own tax return (the T2125 form for your management type services to him). You would then have your own CPP obligation as both the employer and employee so make sure any tax he saves on the deduction is greater than the net CPP and tax you'll need to pay instead.

    Hope that helps. Let me know if there is anything else.

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