knowledge topics
Income Received by Self-Employed Business Owners
KNOWLEDGE EXPECTED OF: CFP® Professionals Only
- Explain the factors the Canada Revenue Agency considers when determining whether an individual is self-employed or an employee.1
- Explain that any undertaking for the purposes of business must have a reasonable expectation of profit in order for income earned to be classed as self-employment income and allowable deductions to be permitted against such income.2
- Explain the factors the Canada Revenue Agency considers when determining if a business has a reasonable expectation of profit.3
- Identify the types of self-employment income.4
- Explain the tax impact of receiving each type of income.
- Estimate the tax impact of receiving each type of income.
- Explain the methods of accounting used by businesses.5
- Cash
- Accrual
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally

REFERENCES
- http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-e.html#workers_employment_status
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/135-143-eng.html
- http://www.cra-arc.gc.ca/E/pub/gl/p-176r/p-176r-e.html
- http://www.cra-arc.gc.ca/gncy/stts/gb09/pst/lcsts/dsctm-eng.html#s4
- http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/ccntng-eng.html