Important Tax Update for Rideshare and Delivery Drivers

Are you a driver for services like Uber, Lyft, UberEats, or SkipTheDishes? The Canada Revenue Agency (CRA) has announced revised tax obligations that you need to be aware of for 2024. Stay compliant and make your tax season smoother with these key updates!

What is Commercial Ridesharing?

Commercial ridesharing involves using your vehicle to provide passenger transportation services through apps like Uber and Lyft. As a rideshare driver, you’re considered self-employed with specific tax responsibilities.

Income Tax Obligations

Report All Income: You must report all earnings, including tips, on your income tax return.
Claim Business Expenses: Deduct fees, maintenance costs, and other expenses incurred while earning your income.

GST/HST Obligations

Register Immediately: Register for a GST/HST account as soon as you start earning.
Collect and Remit GST/HST: Ensure you charge, collect, and remit GST/HST to the CRA. You can claim input tax credits for
GST/HST paid on expenses.

What are Delivery Services?

Delivery services, such as UberEats and SkipTheDishes, involve delivering goods via apps. Like rideshare drivers, delivery drivers are also considered self-employed.

Income Tax Obligations

Report All Income: Report all earnings, including tips, on your income tax return.
Claim Business Expenses: Deduct fees, maintenance costs, and other expenses incurred while earning your income.

GST/HST Obligations

Small Supplier Threshold: Register for a GST/HST account and remit taxes once your earnings exceed $30,000 over four calendar quarters.
Optional Early Registration: Even if you earn less than $30,000, you can choose to register and claim input tax credits for GST/HST paid on expenses.

Key Differences and Combined Activities

If you’re involved in both commercial ridesharing and delivery services, your obligations include:

Income Tax: Report all income from both activities and claim eligible expenses.

GST/HST: Register, collect, and remit GST/HST on all rideshare fares. For delivery services, adhere to the small supplier threshold rules, and claim input tax credits accordingly.

Keep Organized Records

Maintaining accurate books and records is crucial for reporting income and GST/HST, and for claiming eligible expenses. This will help you stay compliant and simplify your tax filing process.

Correcting Your Tax Affairs

If you’ve previously missed reporting income or remitting GST/HST, it’s important to correct your tax affairs to avoid penalties and interest. You can:
Request Changes: Adjust your income tax and benefit return.
Adjust GST/HST Returns: Make necessary corrections.
Voluntary Disclosures Program: Submit an application to potentially receive relief from prosecution, penalties, and interest.

Need help navigating these changes? Our team is here to provide expert guidance and support. Contact us today to ensure you’re on track with your tax obligations!