Need Tax Help!!

[buyr-discounts]

I currently live in Canada but all my business is run through Ebay.com, I have been drop shipping from American distributors,  I only ship to American customers. and use American currency along with an American bank Account I use to purchase items that I ship.  I have no clue whether to incorporate my business in America or Canada. I know i need to pay taxes because I am nearing the 30,000 gross revenue mark.  Please help!! any advise would be greatly appreciated, Thanks in advance!  

from some of the reaseach i've done either I need to form an LLC and apply for S-corp froms 
or apply for GST/PST taxes with CRA  

[femmefan1946]

You don't need to register to remit Canadian sales taxes (GST/HST/PST) if you are not shipping to Canada.

You do need to pay Canadian income taxes on the money you have earned.

You do not have to incorporate to remit taxes. You should speak to an American tax accountant familiar with online/mail order selling about that.

Free advice is worth every penny you pay for it.

[recped]

The 30,000 limit only applies to GST/HST it has nothing to do with income taxes which should be reported on ANY business income.

Being incorporated or not has little to do with reporting business income which may be subject to income tax, it has nothing to do with registering for GST.

[cumos55]

That $30,00 value includes the total of sales ... plus shipping cost...

If your sales are close to $30,000  world wide... and that total does not include shipping...  register for GST/HST sooner than soon...

You do not want an audit  that can be very costly

The buyer pays  a single value for item sold plus shipping....that is your income....  You and not the buyer pays the shipper....

You live in Canada......  .... and all of the tax rules apply to you... You have sales worldwide.....

and then call the Canada Revenue Agency for confirmation  with respect to your situation..

[pierrelebel]

"I currently live in Canada "

This makes you liable to report your worldwide income on your income tax return, regardless of amount. 

If your net profit (revenues minus costs minus expenses) is $1,000 or $29,000 or $100,000 that is the amount to report on line 135 of your tax return.

"all my business is run through Ebay.com"

Totally irrelevant from a tax perspective.  It does not matter where you advertise your products or where the buyers are located.

"I only ship to American customers"

Your listings actually read: "Ships to:  United States and many other countries" and list a long list of countries.  Regardless that information is irrelevant for income tax purposes.

" use American currency along with an American bank Account "

Once again it does not matter what currency is used to buy and sell.  Reporting on your tax return is based on the equivalent Canadian dollar.

" I need to form an LLC "

There is no need to form a corporation.  It is expensive to do and run with no visible advantage.

"apply for GST/PST taxes with CRA"

Even with worldwide revenue (including shipping and handling charges) under Cdn$30,000 you may benefit from registration with GST/HST if some of your purchases or expenses attract GST/HST. The rules are complex and I strongly suggest you contact a competent accountant familiar with your personal circumstances to guide you on the subject.  For more information, please take a look at:

http://www.cra-arc.gc.ca/gsthstregistry/

[maggiebvintage2010]

Even if you don't reside in Canada, if you are Canadian, you must be deemed a non-resident for tax purposes before you are exempt from paying Canadian taxes on worldwide income.  There are several things taken into consideration - you must be a legal resident of another country, have severed ties to Canada (ie no residence, no income, no car, no family ties, no social club memberships, etc), and have filed a final income tax return to remove your assets from the country.