Money Mart question

[JonesingAbout]

Occasionally I work on the side and get paid by cheque. Not a lot but a few thousand a year.

I'd like to understand the risk/reward of cashing a cheque there. Yes, I'll loose a small percentage in transaction fee, but would save a bunch on income tax.

Ethically - i'm not too worried about it. I have a above average steady income in which all is declared. I think I pay more than my fair share.

Do you know their processes are and if/how they report to CRA? What is my exposure?

I'm also concerned that once I start declaring additional income on my tax return, I'll be put in a higher probability for audits.

 

[gdurham]

Occasionally I work on the side and get paid by cheque. Not a lot but a few thousand a year.

I'd like to understand the risk/reward of cashing a cheque there. Yes, I'll loose a small percentage in transaction fee, but would save a bunch on income tax.

Ethically - i'm not too worried about it. I have a above average steady income in which all is declared. I think I pay more than my fair share.

Do you know their processes are and if/how they report to CRA? What is my exposure?

I'm also concerned that once I start declaring additional income on my tax return, I'll be put in a higher probability for audits.

you are worrying about the wrong things my man. the fact that you have a cheque in your hand is the biggest risk from a CRA perspective - you are more likely for CRA to find out about this through an audit of the entity that is issuing hte cheque than them doing an audit on you. if you are tapped for an audit it will usually be a desk audit and they won't be digging too far into your banking information.

I am fairly sure that banks do not provide information about deposits to the government - save large transactions which may need to be reported for money laundering purposes. then again every time I've deposited a large cheque (over 10K)I have never been asked any questions by the bank. if you are talking about farly small cheques then your exposure is very low - regardless of who cashes the cheque.

 

[GPIDEAL]

Occasionally I work on the side and get paid by cheque. Not a lot but a few thousand a year.

I'd like to understand the risk/reward of cashing a cheque there. Yes, I'll loose a small percentage in transaction fee, but would save a bunch on income tax.

Ethically - i'm not too worried about it. I have a above average steady income in which all is declared. I think I pay more than my fair share.

Do you know their processes are and if/how they report to CRA? What is my exposure?

I'm also concerned that once I start declaring additional income on my tax return, I'll be put in a higher probability for audits.

How can you be flagged for an audit if you declare additional income? Perhaps if you try to claim additional expenses, but not additional income. They're called the Canada REVENUE Agency, remember?

 

[GPIDEAL]

you are worrying about the wrong things my man. the fact that you have a cheque in your hand is the biggest risk from a CRA perspective - you are more likely for CRA to find out about this through an audit of the entity that is issuing hte cheque than them doing an audit on you. if you are tapped for an audit it will usually be a desk audit and they won't be digging too far into your banking information.

I am fairly sure that banks do not provide information about deposits to the government - save large transactions which may need to be reported for money laundering purposes. then again every time I've deposited a large cheque (over 10K)I have never been asked any questions by the bank. if you are talking about farly small cheques then your exposure is very low - regardless of who cashes the cheque.

Why would a bank ask more questions (other than telling you that your deposit may be put on hold for a few days) when you deposit a large cheque?

Money-laundering is an issue when large cash deposits are made.

 

[richaceg]

I don't think you will have a problem with CRA on cheques that are under 2k. But from what I heard, they % cut of MM is ridiculously high, no?

 

[explorerzip]

Occasionally I work on the side and get paid by cheque. Not a lot but a few thousand a year.

I'd like to understand the risk/reward of cashing a cheque there. Yes, I'll loose a small percentage in transaction fee, but would save a bunch on income tax.

Ethically - i'm not too worried about it. I have a above average steady income in which all is declared. I think I pay more than my fair share.

Do you know their processes are and if/how they report to CRA? What is my exposure?

I'm also concerned that once I start declaring additional income on my tax return, I'll be put in a higher probability for audits.

Spend a bit of money and hire an accountant so they can give you the proper advice for your circumstances.

 

[gdurham]

Spend a bit of money and hire an accountant so they can give you the proper advice for your circumstances.

any professional accountant is obligated to tell you that this money must be reported as income. they are not going to help you evade the payment of taxes - which is what the OP is after.


look at the end of the day those who are caught are the small minority. I wouldn't spend too much time worrying about it - especially if this is a few g's a year

 

[peter4025]

If the person of company that writes you the cheque fill a T4A summary report at the end of the year it will come back to you.