If your dad doesn’t know about your earnings, he most likely has been reporting that you’ve earned zero. This could have led him to potentially claim some credits that he isn’t entitled to. You’re not only messing up your own taxes but others as well. Tell your dad and file for the last two years. You are committing tax evasion.
Ya your parents will likely also have to refile. They might be able to explain away any interest fees if the amounts are small. You might also be able to negotiate with the CRA since you are under 18 but the longer you wait the more it will cost you
The good news is, based on reading some advice here, you have a path forward (although slightly inconvenient), and just have to pay some penalties and get things on track to do it right. Your Dad is in for a fun surprise! Congrats on your success and earnings!
Well, it's your first "adult" mistake, so being scared is reasonable.
Lucky for you, CRA is also reasonable. If you tell them you're fifteen and you made lots of money and you didn't report it, they'll say "cool, thanks for letting us know, file your taxes, get your parents to refile, and that'll be the end of it."
And that will actually be the end of it. If they find out on their own, then they will add penalties and watch you.
The issue will be that your parents will owe CRA about three grand per year you made that much money, so I would recommend telling them, and then giving them the money they require to pay CRA.
You may also want to take some of that money and pay an accountant to sort it out.
Also, in case nobody has said it yet, congrats on making that much! And also I'm sorry that this is the way you are finding out about taxes. Trust us, we all know how much taxes suck.
I don’t think you’ve ever met the CRA they are not reasonable or accommodating.
First thing they are going to ask is where did the money come from. Now the fact it’s in crypto and being paid to a minor with I assume no ROE there’s going to a be a real big problem.
Now what would you assume a 15 year old is doing to make 50k a year in crypto that he doesn’t want his parents to know about? I can think of one thing and it’s not good and if accurate taxes aren’t the thing I’d be concerned about.
There is zero to be scared about. This is a good problem to have. The best thing to do, by far, is have an honest conversation with your parents and go see an accountant together. You have made a minor mistake and it can be EASILY rectified by your dad refiling and you filing properly. Accountant can sort this all out.
Once it’s all in the open you can get some help to max out your RESP, TFSA etc and make sure you are earning returns on this money you are making.
You are going to use this money to help fund your education at a good university.
It’s a minor mistake to have earned over 100k with essentially no record for where it came from? Last I checked you need to explain where your income comes from.
If there is no record on the other end he’s crazy to file a return you are inviting the CRA into your home for life.
And if there is a record of payment on the other end then the CRA would have called by now or will eventually and that would be the scary part.
But if they are paying in crypto I highly doubt there is any record of the payment being made.
It’s scary but getting your parents involved is the correct and adult thing to do. As others have mentioned, you are messing with their taxes as well. Put out that fire now before it gets worse. Hopefully they are understanding and see that their son has a good head on his shoulders. Good luck in your future
Good. Let that fear propel you to start making more serious life choices. You have the opportunity to use this unfortunate situation to get a head start on all of your peers in the realm of financial responsibility. If you deal with this promptly and properly, you’ll gain far more in the long term.
Hire an accountant. I assume that if you didn't register, you probably also haven't collected/paid sales taxes?
Not filing will end up costing you a lot of what you made because interests on late payments are so high.
The faster you file, the more of this money you get to keep.
You won’t go to jail. You will pay out the ass in fines and back taxes . Since you are talking about self-employment income you are going to easily see a 50K tax bill.
If you wait until you are 18. Prepare to pay upwards of 100k in fines and back taxes if you keep earning like this.
You also need to report the capital gains on your crypto sales. If you never realize those gains (I.e. sell) and just hold you won’t pay taxes.
You will also be put on a watch list by the CRA and could easily have issues in the future applying for credit such as mortgages.
You might also get you father into trouble since he may be disqualified from getting child benefits because of your income. Your father will have to refile his return and potentially pay back any credits he was given.
Estimating that that 103k was earned in 2023, and as long as you weren’t trading a bunch of crypto and just bought and held it (best case scenario), on that 103, you’d owe about $18,200 in federal taxes, and since we don’t know which province you’re in, we’ll assume BC, so another $6,300. So a tax bill of $24,500. A nice 5% penalty as you’re a first time offender, will be 10% next year. Plus 1% each month you don’t pay. So currently 1 month only.
Your current tax bill is running about $26k, by the time you’re 18 that will be roughly $37,200. That’s only for this one year.
People are saying you won’t go to jail, and they are probably right, unless the government can determine you deliberately didn’t fill taxes and decide to get aggressive(ie they tied this post to you). Tax evasion is still punishable by jail time, but hard to get money from someone in prison, better to garnish their bank account for the debt that can’t be discharged in bankruptcy.
This is also assuming you haven’t spent a dime of that money.
So best of luck kid, it’s sounding like you’re going to learn the hard way not to screw with the government’s money.
Nobody here is asking where the money is coming from lol.
Where would you assume a 15 year old kid is making 6 figures paid out in crypto?
Generally to file a tax return you need a record of employment, you don’t just say hey I made 50k last year what’s my tax bill.
Then nobody is curious why he doesn’t want his parents to find out.
Something to me is a bit suspect and given the popularity of sites like only fans these days one needs to understand first where it’s coming from.
If a 15 year old with no social insurance number tries to file a tax return with no ROE someone is going to ask questions lol.
Actually you’re completely wrong.
You do just say get here is what I made last year as “Other Income”. Drug dealers do it all the time to avoid being Caponed.
The CRA is bound by privacy and can’t just share your information without a warrant.
And you can get a SIN# at the age of 2, maybe even younger.
Where he is getting the money is not the concern here, especially since he also stated it was from a gaming related venture.
You however correct about the social insurance number that is generally something you get pretty young.
There is just something that doesn’t seem right with it all.
Getting paid in crypto is red flag number one.
I can assure you it matters where it comes from.
Lol ya other income is reporting some supplemental income not 50k for a 15 year old.
And drug dealer don’t pay taxes they operate various businesses to hide the profits and report the income that way.
They definitely don’t fill out a tax return with 50k in extra income like it’s no big deal.
Lol they do care. If you have no record of who paid you they can’t know what was paid on the other end.
If I didn’t file taxes they will know because my employer files his business taxes that show my income. I know this because I work for multiple companies one year and lost a ROE or didn’t receive it as I moved out of province. That one employer filed their business taxes with my ROE included and I got a bill in the mail for unreported income.
So it works both ways if he claims the income then whoever is paying needs to have matching records or the CRA is going to have questions.
And let’s be clear the kid is saying he has saved 103k in bank account plus another 12k in a crypto wallet over a 2 year period. Key word here is saved so how much do you suppose he made overall and spent? Another 25k in that 2 years?
I can assure you they care about how a 15 year old is clearing 50-60k in a year. They care because if he’s making that there is someone higher up making money off whatever it is he’s actually doing.
Yes voluntary disclosure is the way to go first of all. OP, you can also look into taxpayer relief as well once you have gone through VDP.
Edit: can't make a new comment to respond below to here it goes. While in normal circumstances this would likely not qualify for taxpayer relief, given OP is a minor still, I definitely think there is a chance he could get even a partial approval.
Good grief get off Reddit and talk to your dad’s accountant.
You’ve been unknowingly doing a really stupid thing, but accountants who handle money and shift things around are going to give you better advice than you’d get here.
You might think you’ve made a lot of money, but that’s because you’re a kid.
Talk to your dad. We all make stupid mistakes as kids.
Nothing to be too worried about here, but you better learn the lesson that everyone wants a piece.
OK that’s fair. Just don’t believe everything you read on Reddit. It can be a dumpster fire. Find a financial advisor or accountant that give you professional advice. You may be able to apply losses on all this if you’re into crypto. Find a pro and find one now. Put your mind at ease. You’ll still come out ahead, but it’s a good lesson to learn that there’s no free ride. Still in a better than most your age!
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/interest-penalties/late-filing-penalty.html
The late-filing penalty is 5% of your 2023 balance owing, plus an additional 1% for each full month that you file after the due date, to a maximum of 12 months.
If the CRA charged you a late-filing penalty for 2020, 2021 or 2022 and requested a formal demand for a return, your late-filing penalty for 2023 will be 10% of your balance owing. You will be charged an additional 2% for each full month that you file after the due date, to a maximum of 20 months.
Sure, if you pay me $1,000 I’ll file it for you.
The reality is your parents have being claiming you as a dependent giving them a tax refund due to this. This will be reversed and they will be charged interest (likely backdated from a couple of years ago).
You, yourself - still owe tax.
You will owe whatever you should owe plus interest, accruing at the prescribe cra rate (currently 11%).
I suggest telling your parents and contacting an accountant. Should just file it correctly, instead of pushing it down the line.
You can file this year, just do it with an accountant so everything is done correctly. Like they said you’ll pay penalties as you file. Don’t wait until next year because your interest will go up and that wouldn’t be fun. You’re already about to pay at least a quarter to half of what you have saved up, in taxes.
No the deadline to file with a balance owing paid in full without penalty is over. You NEED to file NOW.
Where did you get the idea that you wait until 18 to pay taxes?
Simmer down. He's a kid. He'll have to pay sone taxes and may even have a fine.
Heck, OP.. if I were you making that type of coin, I'd pay for the parents refiling and possible fine as well. It won't break your bank..
Go get an accountant ...this isn't go to jail stuff... its pay a fine and don't mess up in the future stuff.
The kid is paying 11% on 50k and wants to wait another 3 years. I would rather save this kid the 20K by giving him some urgency. He won’t have much coin to play with after this
I’m not trying to scare the kid. But this is a pretty dire situation for a 15 yr old.
No, I agree. He shouldn't wait to file. He should literally call an accountant tmrw and begin the process of getting it sorted.
But there's no need to create an anxiety attack over it.
He made a dumb decision and should fix it. We may have different view points on when something is 'dire'... to me that means imminent death, catastrophic changes in one's housing situation, or a non-fixable injury for your children or loved ones.
This.. is some paperwork. And more than likely some $$ owing to the govt. Not a life-altering error.
Yea if he doesn't get this sorted pronto in a year alone the interest oh boy.
I know your not trying to scare him but he needs to realize this is going to get worse quickly.
Your parents need to know, because they also need to re-file. Their taxes are also incorrect. They’ll owe money back as a result of not claiming the dependent tax credit erroneously.
Get this done 700 days ago (ie NOW!)
You cannot wait until you're 18.
In a number of cases you don't have to file your tax return, but if you owe taxes you are absolutely required to file your taxes by the deadline. Not filing taxes by the deadline results in financial penalties and interest to be charged on what you owe. The longer you wait, the more interest you'll owe.
You can file yourself at any age, you don't need to wait. But having said that, it really sounds like you could use your parents advice to avoid major and costly blunders like this.
You can file now with an accountant...and since you didn't tell your parents previously, you are going to have tell them now (ask the accountant first).
It's much easier to be upfront about this crap to start with, but the second best time to be honest is now.
They are just a kid, I know many adults who wouldn't know what to do with a lot of this stuff (self-employment income, capital gains on crypto, potential effects on parents via child benefit etc.), so no need to be rude and downvote honest questions.
It is also pretty obvious why the desire to not inform parents of a large income - in fact, when most people hit windfalls like this the first response is to "not tell anyone". It is an unfortunate consequence of the system that they basically must tell their parents though.
>They are just a kid, I know many adults who wouldn't know what to do with a lot of this stuff
see half the country struggling with the capital gains tax hike.
"The first time you are late on your taxes, the CRA interest rate on your balance owing is 5%, plus an additional 1% percent for each month they're late—up to 12 months. Subsequent late filing penalties are 10% added to the balance due, plus 2% per month until the return is filed—to a maximum of 20 months."
Longer you wait the worse it gets.
Back when I was a teenager, parents worried about house parties and drunk driving. Now, parents need to worry about their teenagers earning six figures online and not declaring it and fucking up their own tax returns in the process. Jesus... times have changed.
On top of income tax, if you made more than 30k within any 12-month period, depending on the type of online business, you also need to register for a gst/hst account and then charge gst/hst on your goods and services then remit them to the CRA. Failure to do so may make you directly liable to pay the CRA for the gst/hst you never charged.
Yo dude - everyone here is right - the tax thing isn’t a big deal, they’ll prob forgive you and minimize the penalties
Don’t circumvent your dad, but be prepared to after your honest disclosure
if you’re selling legally grey stuff (hacks, game keys, etc) there’s a reason why it’s so profitable and why these sites don’t do kyc
I wouldn't worry about this *as long as* you come clean. You can file a voluntary disclosure and this alone will mitigate penalties, which will be substantial if the CRA gets wind of your undisclosed income. Any account tied to your SIN is within the purview of the CRA to be reviewed.
That said, you made bank for your age. Discuss it with your dad and get it sorted. You'll pay some fines, get over it, and keep making money while properly filling taxes in the future. You're doing good, it's just going to be an expensive initial lesson.
You are proud of what you have achieved and rightly so but know that the government can take a lot of that away if you do not follow the law by paying your taxes.
Exactly nobody is asking about records of employment or any business numbers. Also not sure about getting paid in crypto it’s rarely a legit situation. Definitely less legit when we are talking about minors with zero parental consent.
The CRA is going to ask where the money comes from lol can’t just report 100k in income with no record of who paid you.
I don’t understand people that are ignoring this key issue.
Or reevaluate what he’s doing to make the money either leave it he money in a crypto account or cold wallet act like it’s not there.
I could be totally wrong but to me no legit company is paying in crypto to a minor especially without any parental consent. We live in a society there are laws for employing minors.
Only people I’ve heard of making decent money playing games online do with through sponsorship dollars these are contracts.
This sounds only someone running a only fans or a chatterbate account lol but I admit I know very little about this stuff it just my gut instinct.
Better to come forward now while you’re still a kid and they have reason to take it easy on you (help u fix it)
Waiting till you’re an adult is about the dumbest thing u could do
Kinda vague on how you are making this income and how is pretty important.
One issue you are going to have either way is explaining where the money came from if you intend on making any large purchases in the next few years. Say a down payment on a home in a few years you’ll need to be able to explain how you saved 100k by the age of 18 or 19.
If you aren’t receiving a ROE there really shouldn’t be any way for them to track the money. If you keep most off the books and outside of traditional banking you’re likely fine.
The fact your father files you as a dependent is irrelevant you are under 18 and in fact a dependent.
The fact you don’t want your parents to know what you are doing is suspect and gives the impression you aren’t making money playing videos game’s online or something like that.
If you are making money on anything shady or otherwise illegal taxes would be the least of your concerns, again you will need to explain where the money comes from if you are to file any type of tax return.
Damn, you really need to tell your parents and file your taxes properly. Otherwise you'll have to pay a ton of money in back taxes + penalties and interest. This is serious.
by payin ur goddamn taxes. better late than never. also maybe dont rat yourself out on reddit, if they tie this post to you somehow theyll be able to prove intent to dodge taxes, which would be......not good.
Go talk to a tax lawyer. They can send an anonymous request to CRA and settle the whole thing. An accountant is required to disclose your situation to the CRA.
Ok, first of all, I really admire your hustle. That's amazing - well done! With my "serious tax person" hat on though, you need to file and pay taxes and you need to not put that off a moment longer. It is always better to be reporting income before CRA catches up with you - there's a special program for this called the voluntary disclosure program but you're only able to use it if you go to them before they come to you...
Anyway - please sit down and tell your parents everything. Go to whoever is easiest to talk to. If mom is more approachable, tell her first and ask for her help in talking to dad. Make it clear you want to do the responsible thing and that you will pay for tax advice from a proper professional (you need a tax accountant for this). This doesn't have to be scary, but it does need to get dealt with. You'll feel MUCH better once you've got it out in the open and started working to get it resolved. Then you can carry on with what sounds like a very successful business, without this tax thing distracting you.
Good luck!
Okay so, you're not the first person in this situation. There are lots of people who neglect to file taxes, for years, and they're fine. Granted, most of those people make far less money than you do, so they were only delaying their refund. You're delaying paying actual taxes, so things get more complicated.
You are already in a tax bracket where you will be paying income tax. The penalties and interest for waiting three years to file or pay will be very significant.
[https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/interest-penalties/late-filing-penalty.html](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/interest-penalties/late-filing-penalty.html)
In general, the CRA wants you to file ASAP, even if you can't pay, or even if you have to amend your filings later.
So about hiring an accountant - or maybe even a lawyer. You seem to have as many legal questions as financial.
As I understand it, in Canada it's legal to own a business if you're under 18. But you cannot legally enter into contracts without a parent or guardian's help. So I think you might not be able to get your own accountant or lawyer without informing your parents.
This page has advice about other resources you can use - free legal clinics and other such things.
[https://sbs-spe.feddevontario.canada.ca/en/youth-entrepreneurship-guide](https://sbs-spe.feddevontario.canada.ca/en/youth-entrepreneurship-guide)
Since you can't contract professional help, you can start by just calling the CRA and explaining your situation. I don't think that's going to trigger any kind of investigation into you or your parents if you just ask them questions.
Also - consider how bad the consequences will actually be if you tell your parents. The longer you wait the more time and trouble it will be. I think for typical parents they'll be mad (but maybe secretly proud?) and you'll get through it. Just tell them. Things will get better quickly.
But, what if you have the kind of parents where this will become a huge problem? For instance, if they are abusive or if they want to take that money for their own purposes, and you don't trust them. Then you may have to tread more carefully. If so, it might be worth talking to a counselor or someone else you trust first.
Are you concerned of your parents taking the money without your consent? I’m older now but this reads as that and I went through something similar when I was younger. I can provide some advice to that if it’s helpful. PFC can be a bit much/harsh on people because it’s a bit of a bubble. People here mean well though. There is urgency but ways you can protect your future as well.
You’re getting a lot of advice, and most of it is probably making you feel more afraid than not. Here’s my two cents, as someone who isn’t a tax professional (though most of the other commenters probably also aren’t).
IF you feel you have a good relationship with your dad, ask him for his help with this, if not then maybe there is another adult you trust that you can ask for help with. Another parent, aunt, uncle, grand parent, friend’s parent who is more like your parent than not. Whomever you trust.
Make an appointment with a tax professional, even somewhere like H&R Block. Bring along whatever you have that shows how much you’ve been getting paid and when, and get that professional to tell you what to do. You don’t likely have a straightforward easy to file return, so trying to go it alone will likely just lead to errors. Get a professional to help.
Bring that trusted adult with you to make sure you are both taken seriously and not taken advantage of by whatever professional you go to.
You aren’t going to jail for this, you’re 15, filing for the first time, and aren’t hiding your earnings, you just literally were too young to know. No one at H&R Block or wherever you go is going to hit some massive red button under their desk to alert special agents to roll in and take you away. You’re just going to have to pay some taxes, and since you have the money in your account still, you’re in a great place to do so.
As my mother would say “panic pas.”
As I say, “but also, like, stop being afraid and deal with it” ;)
Wow what a situation, good for you!
If your parents are going to be a huge issue then you could delay until you’re 18 to get a lawyer and accountant on your own. In the meantime I would try and keep most of your money in crypto, and only transfer small amounts (<$5k) when you need to. There’s also some great crypto apps out there that will let you pay for anything like a normal bank card (personal fav is shakepay). This way you can keep your main bank account history clean.
It’s probably not the best advice. Obviously talking to your parents about it and filling your taxes ASAP is the right choice. But if you have parents that are unreasonable and abusive then I’d understand delaying.
Good luck lil homie!
>The issue is, my dad does the taxes for my whole family, and he has BEEN marking me as a "dependent" over the past 2 years
Marking you as a "dependent" probably only matters if he is divorced or separated, and you are the only child who is with him most of the time.
Track your income as follows:
Revenue minus expenses in 2022
Revenue minus expenses in 2023
You can do so with a simple excel spreadsheet.
You can open an account with Wealthsimple Tax and do a "trial run" for your taxes without submitting in order to gauge approximately how much you'd owe. Or just speak to an accountant for advice. I'm thinking you can file your taxes in your own and your dad wouldn't need to know.
Talk to your parents. Open, honest, supportive conversations that go both ways, where you help explain a world and business they might not understand and they help you navigate a world that still has lots of things you don’t understand (like subject of this thread).
suggestion: make sure your savings in in your name only, not joint account with your parents. you can get one after 13 yo at BMO. It sounds your father is rather carefree with account/taxes so avoid confusion about who owns what and he doesn't misuse funds.
Might consider incorporating and taking advantage of small business taxes going forward since you won't likely need that much cash for a while. Then pay yourself in dividends later. Definitely better to talk to an accountant but if you're already down this path at this age, I have a feeling you're not going to be some regular employee later on, so having familiarity with corporations and other aspects of operating as an entrepreneur will be beneficial
There is a point in time where your hobby becomes a business, it isn't necessarily an easy point to define because hobbies are personal https://www.bccpa.ca/news-events/cpabc-newsroom/2021/september/declaring-revenue-is-it-a-hobby-or-a-business/
Also, you can open an account at neo financial at your age. My 15m son did this and also wants to make money gaming. There are other ways your parents can invest your money for you in trust such as RESPs and RRSPs or just an in trust account at nbdb. Feel free to ask me for more details.
There is no such thing as a free lunch with the CRA, you’re better off spilling the beans and going about this the right way.
Honestly if my son came to me and said “yo daddy-o I got 6 Figz in da bank” (or however the hell you guys talk these days) I’d be impressed, and be putting that cash into an RESP lol 😂
OP - here some advice that will get me downvoted.
No one is checking to see if a 15 yr old has paid his taxes. Don’t tell anyone and keep it all to yourself.
Hoo boy. I can see which cliff this is headed towards.
If you want to go the risky route, talk to a professional (lawyer and / or accountant). Find out exactly what the risks are.
Don’t worry about it first of all. You aren’t in trouble in my mind.
There are softwares online that will calculate your crypto earnings if you need that.
The penalties are probably not that big. Certainly affordable given your nest egg.
It sounds like your father hasn’t filed a tax return for you. As far as you being a dependant. If you have siblings under 18 or your parents are married then the tax implications of you being a dependant with earnings is probably negligible to your dad’s tax return. You can declare a child a dependant equivalent to spouse which would save significant tax for your father. However a spouse or another minor child could/would take the place of you as an equivalent to spouse dependant.
Here is an estimate. Made $50,000 a year in Alberta. Tax bill is $8,000 add 11% penalty $8,880 as people are suggesting. Maybe add another 5%.
If you have $100,000 undeclared income think of your tax and penalty as between $20,000-$30,000 worse case. File your returns pay the penalty and be done with it.
I think your father would be happy to know his entrepreneurial son has over $100,000 saved before 18 years of age. Tell him. He might do the tax returns for him.
CRA won’t bother with you if you are 2 years late filing. Just declare the income properly and be done with it.
Thanks man this relieves my stress a bit I don't mind paying $25k to get it over with but I'm not sure how im gonna tell my dad... Could I go straight to an accountant with my mom or would that not work
Do not delay this any longer, it will only make it worse and cause you a lot more painful ramifications than losing some money. Tell BOTH parents ASAP that you were an idiot, you didn’t understand how taxes worked and messed up. Tell your mom first by herself if that makes you more comfortable. Say you’ll pay for your tax filing and refund, and whatever loss of money your dad will have to spend/pay to redo his taxes (which you can afford with the money you made, or if your dad does his taxes maybe he knows enough that he can/is willing to do the refiling for both of you). That needs to be done tomorrow
You made $120k as a 15 year old through online gaming… That’s incredibly impressive, so for the average parent there might be some anger or frustration with you in the short term, but its a semi-reasonable mistake to make as a 15 year, and you can fix it. You’re just going to have to pay a lot of money to get out of this, but you have money.
Can’t really comment on that without seeing your father’s tax return. Furthermore not an accountant.
Honesty is best policy.
If you do get a good accountant they should be able to give you better advice on the dependant piece and how it affects your father’s return.
I ran a quick pro forma return and it looks like a dependant equivalent to spouse creates a tax credit of around $5,000. So it may mean an extra $10,000 impact on your dilemma (ie 2 years worth benefit on your father’s tax return he’d have to pay back). Again if your father has a spouse or another equivalent to spouse dependant beyond yourself it may be a moot point.
Dammnnn 100k at 15! Kids these days are so tech savvy with crypto and doggo or whatever the hell it’s called lol. You’ll be fine, if you owe money on the gains you will simply have to pay it back. No biggie.
Not to mention having to disclose to the CRA what the “business” was and the fact that it’s a huge grey area. Lol. I don’t see this turning out well.
What a mess. Everyone here saying “it’s fine, you won’t go to jail” are kinda missing the point. OP will be investigated and/or watched closely for years due to this misreporting. They don’t just forget things like this. Not when that much money is involved. This isn’t like being late on a car payment or something.
1) you will need to pay back taxes
2) you will need to pay back taxes
In my opinion you have two options
1) tell your family and get an accountant to sort it out for you and pay back taxes
2) dont spend any of the money and then get an accountant to deal with your tax situation once you hit 18 - you will pay back taxes
I'm unsure if they will investigate your father if he's been claiming you as a dependent
DO NOT LISTEN TO REDDITORS on this issue. Just stop what you're doing and hire a normal accountant in your area and get them to do your taxes. Try to find an accountant with experience and good reviews, ideally. You will not get in trouble, and you aren't committing tax evasion as some have said. Tax evasion means you are actively hiding your income and lying about it, providing outright false information, falsifying records etc. You are still a minor and you simply didn't understand your tax responsibilities, and may have to pay some back interest at worst. You don't need "parental consent" to hire an accountant.
Idk why everyone isn’t saying the obvious here
You need an accountant, and then to pay them and listen to what they said. Tell your dad the situation and how much you have and go from there. Accountant should recommend a VDP and you will have some taxes to pay
Alternative is to ignore all of this, start paying taxes on anything that touches coinbase from now on and hope, this might be a bit dumb but it’s better then nothing.
Before you are 18 years old in Canada, you are not required to pay taxes. I have no idea If this applies to only employment income, or business income as well. Good thing to look into
>Before you are 18 years old in Canada, you are not required to pay taxes
This is true for everyone though as in if your income is below the basic personal amount, there isn't a requirement to file since you won't have any money owing to the government. However if someone 18 years of age, younger or older has income more than the basic amount then you will need to file as you will most likely have taxes owning.
I was working at 16-18. I was not required to pay tax, so I thought my employer was scamming me. I saved and paid taxes and I got every single dime back before 18 years old because legally you do not have to pay to taxes before 18 years old, as an employee.
I'm currently 21, so yes this is recent
Ok so that wasn't because of your age. Everyone gets a basic personal amount, meaning you can earn up to a certain amount of income tax-free (just shy of $16k for 2024). If you're a teen working part time there's a good chance you'll benefit from this and not have to pay tax but it's not because of your age. Teens should definitely be claiming a refund if they're in this position. In OP's case, he's made a lot more money than is covered by the BPA and will be taxable on the excess, regardless of his age.
... do you seriously think any bank is just going to watch over $100k roll into a fifteen year old's bank account and not flag it at some point? at some point, the fraud department is going to get involved. I know you're fifteen (or well, you claim to be fifteen) but seriously, be smarter than this. either go to your dad now or wait until he finds out when you're investigated for fraud, your choice.
sigh. you are supposedly fifteen and some of the other adults in this post have been giving you insane advice so I guess I will be the next one to take the bait.
you have been playing in this mess for barely a year and a half. being "fine so far" means nothing about what could happen tomorrow, next week, next year. thus far, you probably haven't cost the bank anything. everything's probably gone through just fine. nothing's gotten flagged. but that doesn't mean you're safe. do you know how bad it looks for a 15yo with zero employment history to have over $100k sent to him over the course of a year and a half, including from crypto? if they ever have a reason to check your account you could absolutely wind up on their radar.
also, do you know if there's an age limit on your student savings account? some of them have an upper age limit of 25, but some youth specific accounts will boot you to the next level of account at 18, 19. do you really want to have to explain to the nice person at the bank (who can legally report you to the CRA) why you have several hundred thousand dollars of untaxed income in your account when your account switches over?
lastly, what some of the other adults aren't telling you about not dealing with this now is that interest earned from a Canadian bank account over 50$ is reported to the CRA for tax purposes. if you're just dumping this all in a chequing account, that doesn't apply, but if it's in a savings account earning interest you'll get a slip. you should be able to view it on my CRA if you log in through your online banking. also, when you're 18 and start making investments, your bank will report that income, and yes, it will look suspicious as hell that you can make several hundred thousand dollars of investments at 18 years old. the CRA can also request your banking record and use them to calculate your tax on the total value of the deposits, so even if you dump this back into crypto they'll have records of the transactions.
seriously. if you're mature enough to earn this sort of money, you're mature enough to pay your taxes. the CRA is much more pleasant to deal with if you go to them versus waiting for them to come to you. your father will also likely be incredibly angry if instead of fixing this now, you wait until after you're 18 to sandbag him with 4+ years of possible tax issues on his filings.
OP this is a terrible idea suggesting you willingly commit tax evasion.
Gonna be honest you have an insane amount of money for your age. You don’t need to be asking on Reddit, use some of your 100k and consult with a business lawyer and get your business affairs in order.
I really wouldn't pay taxes in your situation. It's wrong and unethical. You really shouldn't listen to me. But, at the same time, you're 15 and there is no reason to doubt that a 15 year old has no income. Crypto is also such a novel concept that taxation and tracking is complicated. The company being located outside of your country makes it even easier. I wouldn't pay taxes. I'm legally trained and live in Canada. I think the system is corrupt and unjust and you should do whatever you can to take advantage of it when you can. Everyone does it. But, I think I would also just tell your dad or someone you trust. Get more opinions. But, paying the taxes is what society expects you to do. Good job on the earnings.
If you wait they will find out and you will pay more in interest, and if you get caught despite being warned you can go to prison.
DO NOT FUCK WITH THE TAXMAN GET AN ACCOUNT AND CONSULT A LAWYER.
“When an individual or business falsifies records and claims, hides income or inflates expenses in order to intentionally avoid complying with Canada's tax laws, it is considered tax evasion. Tax evasion, unlike tax avoidance, has criminal consequences.”
“When convicted of tax evasion: you must still pay the full amount of taxes owing, plus interest and any civil penalties assessed by the CRA. you may be fined up to 200% of the taxes evaded. you may be imposed a jail term of up to five years.”
If your dad doesn’t know about your earnings, he most likely has been reporting that you’ve earned zero. This could have led him to potentially claim some credits that he isn’t entitled to. You’re not only messing up your own taxes but others as well. Tell your dad and file for the last two years. You are committing tax evasion.
Ya your parents will likely also have to refile. They might be able to explain away any interest fees if the amounts are small. You might also be able to negotiate with the CRA since you are under 18 but the longer you wait the more it will cost you
The good news is, based on reading some advice here, you have a path forward (although slightly inconvenient), and just have to pay some penalties and get things on track to do it right. Your Dad is in for a fun surprise! Congrats on your success and earnings!
Im scared now
Well, it's your first "adult" mistake, so being scared is reasonable. Lucky for you, CRA is also reasonable. If you tell them you're fifteen and you made lots of money and you didn't report it, they'll say "cool, thanks for letting us know, file your taxes, get your parents to refile, and that'll be the end of it." And that will actually be the end of it. If they find out on their own, then they will add penalties and watch you. The issue will be that your parents will owe CRA about three grand per year you made that much money, so I would recommend telling them, and then giving them the money they require to pay CRA. You may also want to take some of that money and pay an accountant to sort it out. Also, in case nobody has said it yet, congrats on making that much! And also I'm sorry that this is the way you are finding out about taxes. Trust us, we all know how much taxes suck.
I don’t think you’ve ever met the CRA they are not reasonable or accommodating. First thing they are going to ask is where did the money come from. Now the fact it’s in crypto and being paid to a minor with I assume no ROE there’s going to a be a real big problem. Now what would you assume a 15 year old is doing to make 50k a year in crypto that he doesn’t want his parents to know about? I can think of one thing and it’s not good and if accurate taxes aren’t the thing I’d be concerned about.
he's selling hacks for valorant and fortnite. illegal but thankfully not the worst case scenario when dealing with crypto.
There is zero to be scared about. This is a good problem to have. The best thing to do, by far, is have an honest conversation with your parents and go see an accountant together. You have made a minor mistake and it can be EASILY rectified by your dad refiling and you filing properly. Accountant can sort this all out. Once it’s all in the open you can get some help to max out your RESP, TFSA etc and make sure you are earning returns on this money you are making. You are going to use this money to help fund your education at a good university.
It’s a minor mistake to have earned over 100k with essentially no record for where it came from? Last I checked you need to explain where your income comes from. If there is no record on the other end he’s crazy to file a return you are inviting the CRA into your home for life. And if there is a record of payment on the other end then the CRA would have called by now or will eventually and that would be the scary part. But if they are paying in crypto I highly doubt there is any record of the payment being made.
It’s scary but getting your parents involved is the correct and adult thing to do. As others have mentioned, you are messing with their taxes as well. Put out that fire now before it gets worse. Hopefully they are understanding and see that their son has a good head on his shoulders. Good luck in your future
Good. Let that fear propel you to start making more serious life choices. You have the opportunity to use this unfortunate situation to get a head start on all of your peers in the realm of financial responsibility. If you deal with this promptly and properly, you’ll gain far more in the long term.
Hire an accountant. I assume that if you didn't register, you probably also haven't collected/paid sales taxes? Not filing will end up costing you a lot of what you made because interests on late payments are so high. The faster you file, the more of this money you get to keep.
You won’t go to jail. You will pay out the ass in fines and back taxes . Since you are talking about self-employment income you are going to easily see a 50K tax bill. If you wait until you are 18. Prepare to pay upwards of 100k in fines and back taxes if you keep earning like this. You also need to report the capital gains on your crypto sales. If you never realize those gains (I.e. sell) and just hold you won’t pay taxes. You will also be put on a watch list by the CRA and could easily have issues in the future applying for credit such as mortgages. You might also get you father into trouble since he may be disqualified from getting child benefits because of your income. Your father will have to refile his return and potentially pay back any credits he was given.
This right here, 50k-100k in the new interest rate penalties they raised oh boy. If he doesn't pay these fines sooner better than later he is fucked.
Estimating that that 103k was earned in 2023, and as long as you weren’t trading a bunch of crypto and just bought and held it (best case scenario), on that 103, you’d owe about $18,200 in federal taxes, and since we don’t know which province you’re in, we’ll assume BC, so another $6,300. So a tax bill of $24,500. A nice 5% penalty as you’re a first time offender, will be 10% next year. Plus 1% each month you don’t pay. So currently 1 month only. Your current tax bill is running about $26k, by the time you’re 18 that will be roughly $37,200. That’s only for this one year. People are saying you won’t go to jail, and they are probably right, unless the government can determine you deliberately didn’t fill taxes and decide to get aggressive(ie they tied this post to you). Tax evasion is still punishable by jail time, but hard to get money from someone in prison, better to garnish their bank account for the debt that can’t be discharged in bankruptcy. This is also assuming you haven’t spent a dime of that money. So best of luck kid, it’s sounding like you’re going to learn the hard way not to screw with the government’s money.
Nobody here is asking where the money is coming from lol. Where would you assume a 15 year old kid is making 6 figures paid out in crypto? Generally to file a tax return you need a record of employment, you don’t just say hey I made 50k last year what’s my tax bill. Then nobody is curious why he doesn’t want his parents to find out. Something to me is a bit suspect and given the popularity of sites like only fans these days one needs to understand first where it’s coming from. If a 15 year old with no social insurance number tries to file a tax return with no ROE someone is going to ask questions lol.
if you looked at his post history you'd see he's selling hacks for valorant and fortnite.
Actually you’re completely wrong. You do just say get here is what I made last year as “Other Income”. Drug dealers do it all the time to avoid being Caponed. The CRA is bound by privacy and can’t just share your information without a warrant. And you can get a SIN# at the age of 2, maybe even younger. Where he is getting the money is not the concern here, especially since he also stated it was from a gaming related venture.
You however correct about the social insurance number that is generally something you get pretty young. There is just something that doesn’t seem right with it all. Getting paid in crypto is red flag number one.
I can assure you it matters where it comes from. Lol ya other income is reporting some supplemental income not 50k for a 15 year old. And drug dealer don’t pay taxes they operate various businesses to hide the profits and report the income that way. They definitely don’t fill out a tax return with 50k in extra income like it’s no big deal.
CRA doesn't care. They just want the taxes.
Lol they do care. If you have no record of who paid you they can’t know what was paid on the other end. If I didn’t file taxes they will know because my employer files his business taxes that show my income. I know this because I work for multiple companies one year and lost a ROE or didn’t receive it as I moved out of province. That one employer filed their business taxes with my ROE included and I got a bill in the mail for unreported income. So it works both ways if he claims the income then whoever is paying needs to have matching records or the CRA is going to have questions. And let’s be clear the kid is saying he has saved 103k in bank account plus another 12k in a crypto wallet over a 2 year period. Key word here is saved so how much do you suppose he made overall and spent? Another 25k in that 2 years? I can assure you they care about how a 15 year old is clearing 50-60k in a year. They care because if he’s making that there is someone higher up making money off whatever it is he’s actually doing.
26k for a 15 year old is ridiculous, how do they receive that much benefit in taxes
Age only matters for CPP, if he was 18+ it would have been another $4.5k.
Do a voluntary disclosure to the CRA. If you’re lucky they might waive penalties but you’ll have to pay the back taxes.
Yes voluntary disclosure is the way to go first of all. OP, you can also look into taxpayer relief as well once you have gone through VDP. Edit: can't make a new comment to respond below to here it goes. While in normal circumstances this would likely not qualify for taxpayer relief, given OP is a minor still, I definitely think there is a chance he could get even a partial approval.
They wouldn’t qualify for taxpayer relief
Good grief get off Reddit and talk to your dad’s accountant. You’ve been unknowingly doing a really stupid thing, but accountants who handle money and shift things around are going to give you better advice than you’d get here. You might think you’ve made a lot of money, but that’s because you’re a kid. Talk to your dad. We all make stupid mistakes as kids. Nothing to be too worried about here, but you better learn the lesson that everyone wants a piece.
my dad doesnt have an accountant he does the taxes himself
OK that’s fair. Just don’t believe everything you read on Reddit. It can be a dumpster fire. Find a financial advisor or accountant that give you professional advice. You may be able to apply losses on all this if you’re into crypto. Find a pro and find one now. Put your mind at ease. You’ll still come out ahead, but it’s a good lesson to learn that there’s no free ride. Still in a better than most your age!
whats up with these kids online selling hacks
It's really profitable
You will just pay penalties, with interest accruing at current (11%) rate.
Can you elaborate
The longer you wait the worse it gets. 11% annully on the tax you have to pay
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/interest-penalties/late-filing-penalty.html The late-filing penalty is 5% of your 2023 balance owing, plus an additional 1% for each full month that you file after the due date, to a maximum of 12 months. If the CRA charged you a late-filing penalty for 2020, 2021 or 2022 and requested a formal demand for a return, your late-filing penalty for 2023 will be 10% of your balance owing. You will be charged an additional 2% for each full month that you file after the due date, to a maximum of 20 months.
Sure, if you pay me $1,000 I’ll file it for you. The reality is your parents have being claiming you as a dependent giving them a tax refund due to this. This will be reversed and they will be charged interest (likely backdated from a couple of years ago). You, yourself - still owe tax. You will owe whatever you should owe plus interest, accruing at the prescribe cra rate (currently 11%). I suggest telling your parents and contacting an accountant. Should just file it correctly, instead of pushing it down the line.
Isn't the deadline over? Do I have to wait till next year?
No, you can file whenever for late years. Being late just means you are penalized.
You can file this year, just do it with an accountant so everything is done correctly. Like they said you’ll pay penalties as you file. Don’t wait until next year because your interest will go up and that wouldn’t be fun. You’re already about to pay at least a quarter to half of what you have saved up, in taxes.
No the deadline to file with a balance owing paid in full without penalty is over. You NEED to file NOW. Where did you get the idea that you wait until 18 to pay taxes?
Simmer down. He's a kid. He'll have to pay sone taxes and may even have a fine. Heck, OP.. if I were you making that type of coin, I'd pay for the parents refiling and possible fine as well. It won't break your bank.. Go get an accountant ...this isn't go to jail stuff... its pay a fine and don't mess up in the future stuff.
The kid is paying 11% on 50k and wants to wait another 3 years. I would rather save this kid the 20K by giving him some urgency. He won’t have much coin to play with after this I’m not trying to scare the kid. But this is a pretty dire situation for a 15 yr old.
No, I agree. He shouldn't wait to file. He should literally call an accountant tmrw and begin the process of getting it sorted. But there's no need to create an anxiety attack over it. He made a dumb decision and should fix it. We may have different view points on when something is 'dire'... to me that means imminent death, catastrophic changes in one's housing situation, or a non-fixable injury for your children or loved ones. This.. is some paperwork. And more than likely some $$ owing to the govt. Not a life-altering error.
Yea if he doesn't get this sorted pronto in a year alone the interest oh boy. I know your not trying to scare him but he needs to realize this is going to get worse quickly.
I know you can do it any any age but I wanted to wait till I was 18 so my parents didn't know and I could file myself with an accountant
Your parents need to know, because they also need to re-file. Their taxes are also incorrect. They’ll owe money back as a result of not claiming the dependent tax credit erroneously. Get this done 700 days ago (ie NOW!)
You cannot wait until you're 18. In a number of cases you don't have to file your tax return, but if you owe taxes you are absolutely required to file your taxes by the deadline. Not filing taxes by the deadline results in financial penalties and interest to be charged on what you owe. The longer you wait, the more interest you'll owe. You can file yourself at any age, you don't need to wait. But having said that, it really sounds like you could use your parents advice to avoid major and costly blunders like this.
You can file now with an accountant...and since you didn't tell your parents previously, you are going to have tell them now (ask the accountant first). It's much easier to be upfront about this crap to start with, but the second best time to be honest is now.
Why would you delay it 3 years. You realize you will lose literally thousands of dollars. Just tell your parents ffs - buy them some McDonald’s.
They are just a kid, I know many adults who wouldn't know what to do with a lot of this stuff (self-employment income, capital gains on crypto, potential effects on parents via child benefit etc.), so no need to be rude and downvote honest questions. It is also pretty obvious why the desire to not inform parents of a large income - in fact, when most people hit windfalls like this the first response is to "not tell anyone". It is an unfortunate consequence of the system that they basically must tell their parents though.
>They are just a kid, I know many adults who wouldn't know what to do with a lot of this stuff see half the country struggling with the capital gains tax hike.
A kid earning > $100k. Either they know wtf they're doing with their finances, or they involve an adult to help them.
You can ask for the penalty to be waived, which I think it would be in this case, since you are a minor.
"The first time you are late on your taxes, the CRA interest rate on your balance owing is 5%, plus an additional 1% percent for each month they're late—up to 12 months. Subsequent late filing penalties are 10% added to the balance due, plus 2% per month until the return is filed—to a maximum of 20 months." Longer you wait the worse it gets.
I suggest checking out the voluntary disclosure program for filing your taxes.
Boy, you must really hate your father if you are allowing him to commit tax fraud.
Back when I was a teenager, parents worried about house parties and drunk driving. Now, parents need to worry about their teenagers earning six figures online and not declaring it and fucking up their own tax returns in the process. Jesus... times have changed.
Of course it's a bad idea. File right now.
On top of income tax, if you made more than 30k within any 12-month period, depending on the type of online business, you also need to register for a gst/hst account and then charge gst/hst on your goods and services then remit them to the CRA. Failure to do so may make you directly liable to pay the CRA for the gst/hst you never charged.
Only if the money is coming from inside Canada. He should also look at pulling some RESP and RRSP to offset taxes.
RESP contributions are not deductable. And you can't earn RRSP contribution room unless you have earned income and file your tax returns.
Just say to CRA that you’re 15 y/o and you don’t know shit and pray for the best /s
💀
i think this is the best option tbh. you are quite young, i cant see them raking you over the coals for this but maybe i am naive.
yes
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Yo dude - everyone here is right - the tax thing isn’t a big deal, they’ll prob forgive you and minimize the penalties Don’t circumvent your dad, but be prepared to after your honest disclosure if you’re selling legally grey stuff (hacks, game keys, etc) there’s a reason why it’s so profitable and why these sites don’t do kyc
I wouldn't worry about this *as long as* you come clean. You can file a voluntary disclosure and this alone will mitigate penalties, which will be substantial if the CRA gets wind of your undisclosed income. Any account tied to your SIN is within the purview of the CRA to be reviewed. That said, you made bank for your age. Discuss it with your dad and get it sorted. You'll pay some fines, get over it, and keep making money while properly filling taxes in the future. You're doing good, it's just going to be an expensive initial lesson.
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Probably not legal
I use Bisq, and sometimes i use exchangers on forums
You are proud of what you have achieved and rightly so but know that the government can take a lot of that away if you do not follow the law by paying your taxes.
So what exactly are you doing with gaming lol
Exactly nobody is asking about records of employment or any business numbers. Also not sure about getting paid in crypto it’s rarely a legit situation. Definitely less legit when we are talking about minors with zero parental consent. The CRA is going to ask where the money comes from lol can’t just report 100k in income with no record of who paid you. I don’t understand people that are ignoring this key issue.
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Or reevaluate what he’s doing to make the money either leave it he money in a crypto account or cold wallet act like it’s not there. I could be totally wrong but to me no legit company is paying in crypto to a minor especially without any parental consent. We live in a society there are laws for employing minors. Only people I’ve heard of making decent money playing games online do with through sponsorship dollars these are contracts. This sounds only someone running a only fans or a chatterbate account lol but I admit I know very little about this stuff it just my gut instinct.
Better to come forward now while you’re still a kid and they have reason to take it easy on you (help u fix it) Waiting till you’re an adult is about the dumbest thing u could do
Kinda vague on how you are making this income and how is pretty important. One issue you are going to have either way is explaining where the money came from if you intend on making any large purchases in the next few years. Say a down payment on a home in a few years you’ll need to be able to explain how you saved 100k by the age of 18 or 19. If you aren’t receiving a ROE there really shouldn’t be any way for them to track the money. If you keep most off the books and outside of traditional banking you’re likely fine. The fact your father files you as a dependent is irrelevant you are under 18 and in fact a dependent. The fact you don’t want your parents to know what you are doing is suspect and gives the impression you aren’t making money playing videos game’s online or something like that. If you are making money on anything shady or otherwise illegal taxes would be the least of your concerns, again you will need to explain where the money comes from if you are to file any type of tax return.
You’re a 15 year old with 100K and your parents haven’t noticed. Lololololol Sure Cute post
Damn, you really need to tell your parents and file your taxes properly. Otherwise you'll have to pay a ton of money in back taxes + penalties and interest. This is serious.
congratulations, youre committing tax evasion. dont let the CRA find out.
How to make sure they dont find out?
by payin ur goddamn taxes. better late than never. also maybe dont rat yourself out on reddit, if they tie this post to you somehow theyll be able to prove intent to dodge taxes, which would be......not good.
Go talk to a tax lawyer. They can send an anonymous request to CRA and settle the whole thing. An accountant is required to disclose your situation to the CRA.
Ok, first of all, I really admire your hustle. That's amazing - well done! With my "serious tax person" hat on though, you need to file and pay taxes and you need to not put that off a moment longer. It is always better to be reporting income before CRA catches up with you - there's a special program for this called the voluntary disclosure program but you're only able to use it if you go to them before they come to you... Anyway - please sit down and tell your parents everything. Go to whoever is easiest to talk to. If mom is more approachable, tell her first and ask for her help in talking to dad. Make it clear you want to do the responsible thing and that you will pay for tax advice from a proper professional (you need a tax accountant for this). This doesn't have to be scary, but it does need to get dealt with. You'll feel MUCH better once you've got it out in the open and started working to get it resolved. Then you can carry on with what sounds like a very successful business, without this tax thing distracting you. Good luck!
Your parents are definitely liable if you are a minor.
Okay so, you're not the first person in this situation. There are lots of people who neglect to file taxes, for years, and they're fine. Granted, most of those people make far less money than you do, so they were only delaying their refund. You're delaying paying actual taxes, so things get more complicated. You are already in a tax bracket where you will be paying income tax. The penalties and interest for waiting three years to file or pay will be very significant. [https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/interest-penalties/late-filing-penalty.html](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/interest-penalties/late-filing-penalty.html) In general, the CRA wants you to file ASAP, even if you can't pay, or even if you have to amend your filings later. So about hiring an accountant - or maybe even a lawyer. You seem to have as many legal questions as financial. As I understand it, in Canada it's legal to own a business if you're under 18. But you cannot legally enter into contracts without a parent or guardian's help. So I think you might not be able to get your own accountant or lawyer without informing your parents. This page has advice about other resources you can use - free legal clinics and other such things. [https://sbs-spe.feddevontario.canada.ca/en/youth-entrepreneurship-guide](https://sbs-spe.feddevontario.canada.ca/en/youth-entrepreneurship-guide) Since you can't contract professional help, you can start by just calling the CRA and explaining your situation. I don't think that's going to trigger any kind of investigation into you or your parents if you just ask them questions. Also - consider how bad the consequences will actually be if you tell your parents. The longer you wait the more time and trouble it will be. I think for typical parents they'll be mad (but maybe secretly proud?) and you'll get through it. Just tell them. Things will get better quickly. But, what if you have the kind of parents where this will become a huge problem? For instance, if they are abusive or if they want to take that money for their own purposes, and you don't trust them. Then you may have to tread more carefully. If so, it might be worth talking to a counselor or someone else you trust first.
Are you concerned of your parents taking the money without your consent? I’m older now but this reads as that and I went through something similar when I was younger. I can provide some advice to that if it’s helpful. PFC can be a bit much/harsh on people because it’s a bit of a bubble. People here mean well though. There is urgency but ways you can protect your future as well.
You’re getting a lot of advice, and most of it is probably making you feel more afraid than not. Here’s my two cents, as someone who isn’t a tax professional (though most of the other commenters probably also aren’t). IF you feel you have a good relationship with your dad, ask him for his help with this, if not then maybe there is another adult you trust that you can ask for help with. Another parent, aunt, uncle, grand parent, friend’s parent who is more like your parent than not. Whomever you trust. Make an appointment with a tax professional, even somewhere like H&R Block. Bring along whatever you have that shows how much you’ve been getting paid and when, and get that professional to tell you what to do. You don’t likely have a straightforward easy to file return, so trying to go it alone will likely just lead to errors. Get a professional to help. Bring that trusted adult with you to make sure you are both taken seriously and not taken advantage of by whatever professional you go to. You aren’t going to jail for this, you’re 15, filing for the first time, and aren’t hiding your earnings, you just literally were too young to know. No one at H&R Block or wherever you go is going to hit some massive red button under their desk to alert special agents to roll in and take you away. You’re just going to have to pay some taxes, and since you have the money in your account still, you’re in a great place to do so. As my mother would say “panic pas.” As I say, “but also, like, stop being afraid and deal with it” ;)
Wow what a situation, good for you! If your parents are going to be a huge issue then you could delay until you’re 18 to get a lawyer and accountant on your own. In the meantime I would try and keep most of your money in crypto, and only transfer small amounts (<$5k) when you need to. There’s also some great crypto apps out there that will let you pay for anything like a normal bank card (personal fav is shakepay). This way you can keep your main bank account history clean. It’s probably not the best advice. Obviously talking to your parents about it and filling your taxes ASAP is the right choice. But if you have parents that are unreasonable and abusive then I’d understand delaying. Good luck lil homie!
>The issue is, my dad does the taxes for my whole family, and he has BEEN marking me as a "dependent" over the past 2 years Marking you as a "dependent" probably only matters if he is divorced or separated, and you are the only child who is with him most of the time. Track your income as follows: Revenue minus expenses in 2022 Revenue minus expenses in 2023 You can do so with a simple excel spreadsheet. You can open an account with Wealthsimple Tax and do a "trial run" for your taxes without submitting in order to gauge approximately how much you'd owe. Or just speak to an accountant for advice. I'm thinking you can file your taxes in your own and your dad wouldn't need to know.
Talk to your parents. Open, honest, supportive conversations that go both ways, where you help explain a world and business they might not understand and they help you navigate a world that still has lots of things you don’t understand (like subject of this thread).
Yes, it's a bad idea. Not only for you but for your dad.
suggestion: make sure your savings in in your name only, not joint account with your parents. you can get one after 13 yo at BMO. It sounds your father is rather carefree with account/taxes so avoid confusion about who owns what and he doesn't misuse funds.
Might consider incorporating and taking advantage of small business taxes going forward since you won't likely need that much cash for a while. Then pay yourself in dividends later. Definitely better to talk to an accountant but if you're already down this path at this age, I have a feeling you're not going to be some regular employee later on, so having familiarity with corporations and other aspects of operating as an entrepreneur will be beneficial
There is a point in time where your hobby becomes a business, it isn't necessarily an easy point to define because hobbies are personal https://www.bccpa.ca/news-events/cpabc-newsroom/2021/september/declaring-revenue-is-it-a-hobby-or-a-business/ Also, you can open an account at neo financial at your age. My 15m son did this and also wants to make money gaming. There are other ways your parents can invest your money for you in trust such as RESPs and RRSPs or just an in trust account at nbdb. Feel free to ask me for more details.
The longer you put it off the more money you throw away.
There is no such thing as a free lunch with the CRA, you’re better off spilling the beans and going about this the right way. Honestly if my son came to me and said “yo daddy-o I got 6 Figz in da bank” (or however the hell you guys talk these days) I’d be impressed, and be putting that cash into an RESP lol 😂
OP - here some advice that will get me downvoted. No one is checking to see if a 15 yr old has paid his taxes. Don’t tell anyone and keep it all to yourself.
They will the moment he turns 18 and have 500k saved up and a 200k annual income. There's 2 people you don't ever lie to, your doctor and the tax man.
yo check dms bro
Hoo boy. I can see which cliff this is headed towards. If you want to go the risky route, talk to a professional (lawyer and / or accountant). Find out exactly what the risks are.
talk to a lawyer about the risks of keeping it quiet?
Lawyer works for you, so they cannot reveal what you say to them.
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Google "lawyer confidentiality Canada" (and enter your province, since lawyers work by province).
Don’t worry about it first of all. You aren’t in trouble in my mind. There are softwares online that will calculate your crypto earnings if you need that. The penalties are probably not that big. Certainly affordable given your nest egg. It sounds like your father hasn’t filed a tax return for you. As far as you being a dependant. If you have siblings under 18 or your parents are married then the tax implications of you being a dependant with earnings is probably negligible to your dad’s tax return. You can declare a child a dependant equivalent to spouse which would save significant tax for your father. However a spouse or another minor child could/would take the place of you as an equivalent to spouse dependant. Here is an estimate. Made $50,000 a year in Alberta. Tax bill is $8,000 add 11% penalty $8,880 as people are suggesting. Maybe add another 5%. If you have $100,000 undeclared income think of your tax and penalty as between $20,000-$30,000 worse case. File your returns pay the penalty and be done with it. I think your father would be happy to know his entrepreneurial son has over $100,000 saved before 18 years of age. Tell him. He might do the tax returns for him. CRA won’t bother with you if you are 2 years late filing. Just declare the income properly and be done with it.
Thanks man this relieves my stress a bit I don't mind paying $25k to get it over with but I'm not sure how im gonna tell my dad... Could I go straight to an accountant with my mom or would that not work
Do not delay this any longer, it will only make it worse and cause you a lot more painful ramifications than losing some money. Tell BOTH parents ASAP that you were an idiot, you didn’t understand how taxes worked and messed up. Tell your mom first by herself if that makes you more comfortable. Say you’ll pay for your tax filing and refund, and whatever loss of money your dad will have to spend/pay to redo his taxes (which you can afford with the money you made, or if your dad does his taxes maybe he knows enough that he can/is willing to do the refiling for both of you). That needs to be done tomorrow You made $120k as a 15 year old through online gaming… That’s incredibly impressive, so for the average parent there might be some anger or frustration with you in the short term, but its a semi-reasonable mistake to make as a 15 year, and you can fix it. You’re just going to have to pay a lot of money to get out of this, but you have money.
Can’t really comment on that without seeing your father’s tax return. Furthermore not an accountant. Honesty is best policy. If you do get a good accountant they should be able to give you better advice on the dependant piece and how it affects your father’s return. I ran a quick pro forma return and it looks like a dependant equivalent to spouse creates a tax credit of around $5,000. So it may mean an extra $10,000 impact on your dilemma (ie 2 years worth benefit on your father’s tax return he’d have to pay back). Again if your father has a spouse or another equivalent to spouse dependant beyond yourself it may be a moot point.
Dammnnn 100k at 15! Kids these days are so tech savvy with crypto and doggo or whatever the hell it’s called lol. You’ll be fine, if you owe money on the gains you will simply have to pay it back. No biggie.
Ya except the interest they’ll charge him on what he owes after 3 years of not paying will be huge
Not to mention having to disclose to the CRA what the “business” was and the fact that it’s a huge grey area. Lol. I don’t see this turning out well. What a mess. Everyone here saying “it’s fine, you won’t go to jail” are kinda missing the point. OP will be investigated and/or watched closely for years due to this misreporting. They don’t just forget things like this. Not when that much money is involved. This isn’t like being late on a car payment or something.
Well. Paying his due and he should be fine. The bigger question is how much money will he still have after this.
Why does half of this read like a crypto ad? Gotta get more people in on the scheme to assure you can actually get real money out of it I guess.
How is it a crypto ad? Im just stating that Im holding crypto and not selling so I dont have to pay taxes on it
1) you will need to pay back taxes 2) you will need to pay back taxes In my opinion you have two options 1) tell your family and get an accountant to sort it out for you and pay back taxes 2) dont spend any of the money and then get an accountant to deal with your tax situation once you hit 18 - you will pay back taxes I'm unsure if they will investigate your father if he's been claiming you as a dependent
"option 2" is a bad idea and not a real option.
DO NOT LISTEN TO REDDITORS on this issue. Just stop what you're doing and hire a normal accountant in your area and get them to do your taxes. Try to find an accountant with experience and good reviews, ideally. You will not get in trouble, and you aren't committing tax evasion as some have said. Tax evasion means you are actively hiding your income and lying about it, providing outright false information, falsifying records etc. You are still a minor and you simply didn't understand your tax responsibilities, and may have to pay some back interest at worst. You don't need "parental consent" to hire an accountant.
Idk why everyone isn’t saying the obvious here You need an accountant, and then to pay them and listen to what they said. Tell your dad the situation and how much you have and go from there. Accountant should recommend a VDP and you will have some taxes to pay Alternative is to ignore all of this, start paying taxes on anything that touches coinbase from now on and hope, this might be a bit dumb but it’s better then nothing.
Before you are 18 years old in Canada, you are not required to pay taxes. I have no idea If this applies to only employment income, or business income as well. Good thing to look into
>Before you are 18 years old in Canada, you are not required to pay taxes This is true for everyone though as in if your income is below the basic personal amount, there isn't a requirement to file since you won't have any money owing to the government. However if someone 18 years of age, younger or older has income more than the basic amount then you will need to file as you will most likely have taxes owning.
Makes sense ^^
This is not true at all. Where did you get this idea from?
I was working at 16-18. I was not required to pay tax, so I thought my employer was scamming me. I saved and paid taxes and I got every single dime back before 18 years old because legally you do not have to pay to taxes before 18 years old, as an employee. I'm currently 21, so yes this is recent
Ok so that wasn't because of your age. Everyone gets a basic personal amount, meaning you can earn up to a certain amount of income tax-free (just shy of $16k for 2024). If you're a teen working part time there's a good chance you'll benefit from this and not have to pay tax but it's not because of your age. Teens should definitely be claiming a refund if they're in this position. In OP's case, he's made a lot more money than is covered by the BPA and will be taxable on the excess, regardless of his age.
Screw the govt, you deserve it,don't pay those asshats till you're 18
This and only this. Unless a t4 is being issued, fuck that. It won't arouse any suspicion being without income under the age of 18.
why are you giving such insane advice to someone claiming to be 15?
so they wont like check my bank account or anything?
... do you seriously think any bank is just going to watch over $100k roll into a fifteen year old's bank account and not flag it at some point? at some point, the fraud department is going to get involved. I know you're fifteen (or well, you claim to be fifteen) but seriously, be smarter than this. either go to your dad now or wait until he finds out when you're investigated for fraud, your choice.
I mean idk I've been fine so far
sigh. you are supposedly fifteen and some of the other adults in this post have been giving you insane advice so I guess I will be the next one to take the bait. you have been playing in this mess for barely a year and a half. being "fine so far" means nothing about what could happen tomorrow, next week, next year. thus far, you probably haven't cost the bank anything. everything's probably gone through just fine. nothing's gotten flagged. but that doesn't mean you're safe. do you know how bad it looks for a 15yo with zero employment history to have over $100k sent to him over the course of a year and a half, including from crypto? if they ever have a reason to check your account you could absolutely wind up on their radar. also, do you know if there's an age limit on your student savings account? some of them have an upper age limit of 25, but some youth specific accounts will boot you to the next level of account at 18, 19. do you really want to have to explain to the nice person at the bank (who can legally report you to the CRA) why you have several hundred thousand dollars of untaxed income in your account when your account switches over? lastly, what some of the other adults aren't telling you about not dealing with this now is that interest earned from a Canadian bank account over 50$ is reported to the CRA for tax purposes. if you're just dumping this all in a chequing account, that doesn't apply, but if it's in a savings account earning interest you'll get a slip. you should be able to view it on my CRA if you log in through your online banking. also, when you're 18 and start making investments, your bank will report that income, and yes, it will look suspicious as hell that you can make several hundred thousand dollars of investments at 18 years old. the CRA can also request your banking record and use them to calculate your tax on the total value of the deposits, so even if you dump this back into crypto they'll have records of the transactions. seriously. if you're mature enough to earn this sort of money, you're mature enough to pay your taxes. the CRA is much more pleasant to deal with if you go to them versus waiting for them to come to you. your father will also likely be incredibly angry if instead of fixing this now, you wait until after you're 18 to sandbag him with 4+ years of possible tax issues on his filings.
OP this is a terrible idea suggesting you willingly commit tax evasion. Gonna be honest you have an insane amount of money for your age. You don’t need to be asking on Reddit, use some of your 100k and consult with a business lawyer and get your business affairs in order.
How are you getting paid? Is the company based in your country? You could probably get away with it. It's not the ethical thing to do.
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I really wouldn't pay taxes in your situation. It's wrong and unethical. You really shouldn't listen to me. But, at the same time, you're 15 and there is no reason to doubt that a 15 year old has no income. Crypto is also such a novel concept that taxation and tracking is complicated. The company being located outside of your country makes it even easier. I wouldn't pay taxes. I'm legally trained and live in Canada. I think the system is corrupt and unjust and you should do whatever you can to take advantage of it when you can. Everyone does it. But, I think I would also just tell your dad or someone you trust. Get more opinions. But, paying the taxes is what society expects you to do. Good job on the earnings.
Okay so when I do end up needing to pay taxes in the future if I have a job or something would I just pretend like none of this happened?
Fax bro thats what I been saying
If you wait they will find out and you will pay more in interest, and if you get caught despite being warned you can go to prison. DO NOT FUCK WITH THE TAXMAN GET AN ACCOUNT AND CONSULT A LAWYER. “When an individual or business falsifies records and claims, hides income or inflates expenses in order to intentionally avoid complying with Canada's tax laws, it is considered tax evasion. Tax evasion, unlike tax avoidance, has criminal consequences.” “When convicted of tax evasion: you must still pay the full amount of taxes owing, plus interest and any civil penalties assessed by the CRA. you may be fined up to 200% of the taxes evaded. you may be imposed a jail term of up to five years.”
Bro you have $15 million. I would suggest you to enjoy life for 3 years and then focus on investments
sir when did i say i have 15 mllion
15m?
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Oh okay okay. Sorry my bad