taxes & royalties in Canada

[lennard]

My wife Jennifer is starting to do her first set of taxes for Audio Lark which is a Canadian company. She has something like 60-70 folks who have received a bit of royalty money. This is a startup, many of these folks received enough cash to get a few cups of coffee, nobody got more than $75 in royalties. I know US portals starting asking me to fill out a form (1080?) for royalty income in the past few years but I don't know why all of this income wouldn't just be considered an expense from Audio Larks POV. She can't Google up an answer, we don't have a local accountant who would be knowledgeable about this topic and she won't be content with the answer I'm giving her which is "they aren't going to come after you over these #'s even if you do get it wrong".

Anybody got advice or a handy link?

[galent]

Is your wife's company in Canada? If so, she only needs to fill out her business tax return and use standard accounting practice to record payments, as long as she didn't hire those people (employees are quite different from contract or bus-bus payments (which is what royalities tend to be)).

If she hired them, then she has some more work to do...

Same for your 1080 comment, btw... actually I've never heard of a 1080. 1099, for sub-contractors, or W2 for employees. And even then, you normally wouldn't use a 1099 unless you exeeded $600 in the calendar year.

Hope this helps,

Galen

[Spore Man]

Just use an qualified accountant.

[Over00]

yeah those are just business expenses. No worries to have as long as those are not employees. Had to check that stuff myself and it all comes down to just putting a single number in a box.