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When filing your tax return, there is no need to "print" any report other than attach your Profit and Loss statement for the year and enter the net profit on line 135 of your tax return.
Here is a sample P&L I prepared for eBay viewers a few years ago:
http://pierrelebel.com/lists/P&L-sample.htm
As far as conversion is concerned, the tax department will accept any reasonable conversion method as long as it is consistent from year to year. Personally, I have always used the "annual average" (as offered by the Bank of Canada) method as I find it easier to manage. I have schedules for my expenses, my purchases and my sales. All US$ entries are converted using the same annual average (regardless of the actual rate paid/received).
According to the Bank of Canada, the following averages apply:
2008 = US$ 1.00 = Cdn$ 1.0660
2009 = US$ 1.00 = Cdn$ 1.1420
2010 = US$ 1.00 = Cdn$ 1.0300
2011 = US$ 1.00 = Cdn$ 0.9891
Keep in mind that you should keep receipts for your purchases and expenses in case of tax audit (a larger number of eBay sellers (not just PowerSellers) get audited every year). You should also keep your bank statements, cheque registers, credit card statements to evidence your receipts and expenses/purchases.
"if the paper work is all there - there is nothing to worry about!"
If the paperwork is all there, and the numbers are matched by receipts and bank deposits, and the net profit reported on the tax return matches with reality... then there is nothing to worry about! 🙂
Hi fatdane
" write off expenses like " Happy Bodies Excort Service"
Is this why your tax audit took so long? 🙂
Is your wife aware of the "business expense'? 🙂
There is no need to panic (yet).
Tax returns have to be filed by April 30th (businesses have until June 15th but the taxes are due on April 30th and interest is charged from April 30th).
Once you have calculated your "business income" simply prepare a corrected return (extra forms are available at the post office if needed) or use a copy of the return you already sent and make the necessary adjustments (it could look messy!).
If you owe extra money, you can include a cheque or wait for CRA to advise you how much you shiould send by April 30th when they send your tax assessment.
Yes, using a P&L based on the sample supplied over the years will work just fine as long as your numbers are relatively accurate and you can prove them in needed. Yes, CRA does match business income information against information obtained from eBay, PayPal, Canada Post, banks, and other suppliers of goods and services.
As long as your worldwide annual sales volume (including shipping charges) remains under $30,000 you are not required to register with HST/GST although many Canadians sellers do to take advatnage of Input Tax Credits (refund of the GST/HST paid on your goods and services).
Good Luck.
"Do you need to registar your 'business' have a business id number with the governement and all that ?"
No unless your annual worldwide sales exceed $30,000 (your HST/GST registration and business numbers are the same)
"but it`s in 'the best of my memory'...."
From now on, why don't you make sure you pay everything with a credit card. That is the best documentation you can have. Actually, I would recommend one card used specifically for your business. You can use it to pay your eBay fees, your supplies, etc...
"the input tax credits.... does that mean I can't claim postage, enveloppes and stuff?"
Input Tax Credits (ITC) are valuable to recover 100% of the tax (HST/GST) you pay on your purchases, equipment and business related expenses. They can only be claimed if you are GST/HST registered. With annual sales of $5,000 I would not worry about it at this time.
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