Moonlighting can be a great way to use your skillset to bring in some extra cash on the side. For some, it may also be a way to justify writing off some otherwise “personal” expenses, such as expenses for the business use of a work space in your home, for tax purposes. But be forewarned — if you don’t operate your business in a commercial manner or it’s deemed that there is a significant personal element associated with your so-called “business,” any losses you incur from that business may be denied by the taxman.
Take, for example, the recent case involving an Ontario accountant who was employed, full-time, by a local municipality from March 2005 through May 31, 2007, as its treasurer, chief financial officer and ultimately, as chief administrative officer. In 2007, the year under review by the Canada Revenue Agency, the taxpayer earned nearly $83,000 of employment income from the municipality.
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