Taxes: 4 surprising sources of income you may have to claim

You know that tips and interest income are both subject to the Taxman. But what about other random items? Have a look at a few surprising things you can be taxed on.

Bitcoins

If the currency is digital, is it still taxable? You bet.

Bitcoins are virtual money that can be used to buy and sell goods or services. They’re not controlled by any central banks or country and can be traded anonymously via a bitcoin exchange.

Where digital currency is used to pay for goods or services, the rules for barter transactions apply, according to the Canada Revenue Agency.

“A barter transaction occurs when any two persons agree to exchange goods or services and carry out that exchange without using legal currency,” the CRA website states.

“For example, paying for movies with digital currency is a barter transaction. The value of the movies purchased using digital currency must be included in the seller’s income for tax purposes. The amount to be included would be the value of the movies in Canadian dollars.”

Bitcoins can also be bought or sold like commodities. Any resulting gains or losses could be taxed as a capital gain or loss.

Gambling winnings, maybe

You’re safe if you win the annual office hockey pool, but if you consider yourself serious and think you’re actually going to make money via casinos, racetracks, or websites, you may be subject to tax on income derived from it.

It depends on “the taxpayer’s intention to gamble for pleasure as compared with any intention to gamble for profit as a means of gaining a livelihood”, the CRA website states, as well as the “extent of the taxpayer’s gambling activities, including the number and frequency of bets.”

“It is clear from various decisions of the courts that earnings from illegal operations or illicit businesses, such as illegal gambling and fraudulent business schemes, are not exempt from tax," the website says.

Occasional earnings

This category is broad, but remember not reporting income is illegal.

Are you a mystery shopper? Do you regularly donate sperm or blood plasma to make money? Do you help your sister out with her catering company every now and then? Do you ghost-write term papers or books?

Best to declare any sources of spending money that don’t show up on T4 slips despite the fact that the government will take its share.

Scholarships and bursaries, maybe

Generally, post-secondary school scholarships, fellowships and bursaries are not taxable, providing you qualify for the education amount.

However, you need a PhD degree to understand the fine print. “The scholarship exemption will be limited to the extent that the award was intended to support the student’s enrollment in the program,” according to the Canada Revenue Agency.

To determine what portion of a scholarship was intended to support enrollment for full-time students, they need to consider the duration of the program, any terms and conditions that apply to the award; and the period for which support is intended to be provided by the award.

There are varying rules for part-time students too. In some cases they’re eligible for a basic scholarship exemption of $500.