What qualifies as business income?
Business income is income you earn from a profession, a trade, manufacture or undertaking of any kind, an adventure or concern in the nature of trade, or any other activity you carry on for profit and there is evidence to support that intention.
For example, income from a service business is business income. Business income does not include employment income, such as wages or salaries received from an employer.
Sources of income
The following are considered sources of income:
Vacation trips and awards
Surface rentals for petroleum or natural gas exploration
Gift cards or certificates – sales
Incentive income – pre-loaded credit cards and gift cards
Selling a property
Lottery prize commissions
How to account for your business income
Business owners have to provide information about their business income and expenses.
Although other types of financial statements are acceptable, we encourage you to use any of the following forms that apply to you:
Form T2125, Statement of Business or Professional Activities
Form T2042, Statement of Farming Activities
Form T2121, Statement of Fishing Activities
Form T1163, Statement A – AgriStability and AgriInvest Programs Information and Statement of Farming Activities for Individuals
You also have to record as income any amount credited to your account or set aside for you as payment for providing goods and services. This includes amounts credited to your accounts as offsets against an amount you owe.
You have to support all income entries in your records with original documents like:
cash register tapes
bank deposit slips
Keep these supporting documents in calendar order or numerical order. Keep them available in case we ask to see them.
You must keep a separate record of your income from all other sources, such as professional fees and income from property, investments, taxable capital gains, estates, trusts, employment, and pensions.
Culled from: https://www.canada.ca/en/revenue-agency/services/tax/businesses/small-businesses-self-employed-income/business-income-tax-reporting/business-income.html
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