Congratulations on your entrepreneurship! Unfortunately, you need to declare the entire amount as additional revenue to your 2015 income tax filling.
Tax exemption is the process of exempting a person from paying taxes on a specified amount of income for themselves and their dependents. In Canada, a portion of your income is exempt from taxation, this is your Basic Personal Amount. As of the 2014 tax year,as a resident of Ontario, you can claim up to $21,190.00 ($9,863 in Ontario and $11,327 at the Federal level).
Your income for each tax year is not just your income from your one employer, it is the combination of all the income you earned in the tax year. If you have more than one employer/payer in the year and you have already claimed the entire personal tax credit amount (form TD1ON for Ontario and TD1 form at the Federal level), you cannot claim the personal tax credit amount again. Hence, any income earned above this amount is taxable income.
So in your case, even if you made $100 this year, if your full-employment income has already claimed all your personal tax credit amount, that $100 is taxable and you should declare it. Note, it is not your employers’ responsibility that monitor if this threshold has been reached, it is your responsibility as a tax payer to do so.
Charlene, should your income continue to increase due to your tutoring, consider incorporating into a small business to reduce your tax expenses.
Rosie Ogang, PFP, CPA, CMA