#8264958 - 06/25/15 08:52 AM
Re: please educate me on incorporating myself as a business
[Re: TheRealCSnapper]
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4age
XD XD XD XD
Post Master Sr
Registered: 09/11/01
Posts: 3969
Loc: North York, Ontario, Canada
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the actual process is easy. fill out some forms, yup.
cost anywhere from 1.5k to 3k+. you will need your incorporation, a business number and an hst number.
you do your own payroll remittances, hst remittance etc. The benefit all boils down to how aggressive you are willing to be in taking advantage of grey areas + having a suitable accountant.
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#8265044 - 06/25/15 09:33 AM
Re: please educate me on incorporating myself as a business
[Re: SuPeR-MaRiO]
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Risky Business
Provides a Great Work Environment. he/him
Post Master Supreme
Registered: 05/17/10
Posts: 44794
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I am on my phone right now so I can't give you a full write out but it comes down to paying less tax if you are incorporated and a contractor. You can pay yourself via dividend which is taxed at a lower rate than income tax however you forego the accumulation of rrsp room and such which isn't the the end of the world. Word of caution, if you incorporate and work for someone rather than multiple clients (not at arms length) you will be deemed an employee and the incorporating will not give you any tax benefit. It's been a while since I've gone over the rules. First understand why you are incorporating and if it even makes sense and then take it from there.
You can incorporate for less than 500 online, you will need to file annual returns going forward which cost a couple of hundred.
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#8265089 - 06/25/15 09:57 AM
Re: please educate me on incorporating myself as a business
[Re: TheRealCSnapper]
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4age
XD XD XD XD
Post Master Sr
Registered: 09/11/01
Posts: 3969
Loc: North York, Ontario, Canada
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u can pay into RRSP.
what risky is saying is in your setup, you technically are an employee.
on paper you are a contractor, but if you are only doing business with this 1 place, you will not (read: should not) reap the benefits of going to a numbered business.
You can pay into RRSP if you pay yourself a salary (rather than dividend).
The other advantage of being incorporated is not paying urself all the income...and u can invest the money in the business through other channels. u save some tax that way (annually anyway)
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#8265200 - 06/25/15 10:51 AM
Re: please educate me on incorporating myself as a business
[Re: c2k]
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4age
XD XD XD XD
Post Master Sr
Registered: 09/11/01
Posts: 3969
Loc: North York, Ontario, Canada
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^yes but up to a certain %
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#8265509 - 06/25/15 01:16 PM
Re: please educate me on incorporating myself as a business
[Re: 4age]
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Lafora
Post Master Sr
Registered: 12/16/01
Posts: 4623
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the actual process is easy. fill out some forms, yup.
cost anywhere from 1.5k to 3k+. you will need your incorporation, a business number and an hst number.
you do your own payroll remittances, hst remittance etc. The benefit all boils down to how aggressive you are willing to be in taking advantage of grey areas + having a suitable accountant.
doesn't take that much.
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#8265902 - 06/25/15 05:09 PM
Re: please educate me on incorporating myself as a business
[Re: Risky Business]
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Simon_the_Pieman
Post Master Sr
Registered: 08/13/01
Posts: 9464
Loc: The A
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What kind of shit can you ... 'write off', assuming only 1 'client'?
- clothing expenses? (No, not a uniform. I'm talking that Gucci watch, Prada tie)
- Gas?
- Food?
- Gift cards? (StarBucks, Subway, Spa, shopping mall)
- Hotels
- Condoms
- Cell phone bill
- Cell phone You can write off anything and everything as long as the CRA doesn't audit you. People are abusing the shit out of this and the CRA is starting to clamp down on contractors in particular. As far as writing off portion of housing costs, yea allowed but it can be deemed as work space and upon sale you can be taxed on capital gains of the square footage. It's very rare, but like I said the CRA is clamping down on all of this shit. I know people who have gone through audits and are on the hook for 50k+ with liens on their assets. Do whatver you want at your own risk, everyone is a city slicker writing off that starbucks coffee on a Sunday morning until they get audited 
thats why i dont fuck around.
work is work / personal is personal.
if i get audited at least im clean. why fuck shit up for me and my employees?
do the right thing.
snapper, if you are planning to offer your services elsewhere at the same time then inc. if not then solprop.
_________________________
"I'd love it if we did it... but I guess I'm a big skeptic on Canadians because so many are retarded as fuck." - 355-Si, 2020
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#8265941 - 06/25/15 05:26 PM
Re: please educate me on incorporating myself as a business
[Re: Risky Business]
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TheRealBenzo
Jr Member
Registered: 03/09/02
Posts: 657
Loc: Toronto, Ontario, Canada
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Some of the posts above raise the questions you should be asking (of yourself and your employer). Generally speaking, it's easier to understand that you do not really "incorporate yourself" - the use of this language can cause confusion and missteps from both a taxation and structure standpoint. You will either be a self-employed independent contractor ("IC" for the purposes of this discussion) in which case your salary will be taxable at your personal marginal rate, or carry on their activities THROUGH a corporation ("Corp") - a distinct entity apart from yourself which will be taxed at corp fed/prov rate (will touch on this in a moment).
If you are going to be a sole proprietor IC, confirm this with your employer (should be fine if others are in a similar arrangement) but understand that the employee versus independent contractor determination is a question of fact and the factors to be considered in any given case will be different. Generally, if you provide services through your corporation and, if not for the corporation, you could be considered an employee of the entity to which you provide the services, the corporation may be considered a personal services business (apart from some very specific tax planning arrangements, this is a bad thing). You do not want to earn income as an IC, only to be deemed a PSB (read:)employee by the CRA and have all deductions disallowed (your employer also has a dog-in-the-fight here, so they will likely have already turned their mind to this).
Option B is operating through a corporation in order to obtain the benefit of small business deductions (this is a longer discussion, but you cannot simply "write-off" anything salient to the business; your accountant will speak to what can and cannot be deducted). Your two main benefits to incorporation are tax savings (by way of income splitting) and if the funds are left in the corporation, tax deferral of the what would other wise be income taxable at your personal marginal rate (corporations pay less tax, you do not realize any income until you (or your spouse, children) are personally paid out as shareholder(s) of the Corp.
The cost of option B will be the registry fees (depending upon jurisdiction around $400) and the cost of drafting your post incorp docs. An estimate of $1000 for a junior/paralegal at a smaller shop to put everything together (including reg fees) would be getting a good "deal". Though like anything else, work product should be front of mind (I've seen some fucking mind-blowing "friend who is a lawyer or something gave me a good deal" minute books in my time).
Hope that answers your questions for the most part. Feel free to ask clarifying questions, I'm experiencing death-by-conference-call right now.
_________________________
"Sounds like she's carrying baggage. Keep your trunk closed. " Moof, 2003
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#8266017 - 06/25/15 06:00 PM
Re: please educate me on incorporating myself as a business
[Re: Risky Business]
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TheRealBenzo
Jr Member
Registered: 03/09/02
Posts: 657
Loc: Toronto, Ontario, Canada
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What CAN you write off as a single-client sole pro?
What SHOULD you write off as a single-client sole pro?
This is more of an accountant question, but generally speaking you can deduct expenses paid in the course of earning business income. I'll direct you to the CRA listing to see examples: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/menu-eng.html#expenses
What CAN you write off as a single-client sole pro?
What SHOULD you write off as a single-client sole pro?  Did you not read the fucking thread? Single client anything and you will be deemed an employee for tax purposes by the CRA.
This is a more nuanced answer, which would require facts in order to properly characterize the relationship. If there was a disagreement as to whether or not you could, as a SP, work for one client without being deemed to be an employee, a test would be used to determine, among other things, how reliant one party is on the other. One of the prongs of this test is whether or not the IC has other clients, but it is not determinative.
Edit: If the foregoing is not clear, maybe an example would help. Let's say you work as a gas fitter for a large oil and gas company that controls most of the work in your area so all your work comes through them simply by way of volume. You would look like an employee. But let's say that you tell them when you come and go, you bring your own tools, and if you don't feel like taking a job you can refuse. Now, despite the fact that you have one client, you are starting to look more like an IC. Make sense?
Edited by TheRealBenzo (06/25/15 06:07 PM)
_________________________
"Sounds like she's carrying baggage. Keep your trunk closed. " Moof, 2003
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#8266059 - 06/25/15 06:50 PM
Re: please educate me on incorporating myself as a business
[Re: TheRealBenzo]
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Risky Business
Provides a Great Work Environment. he/him
Post Master Supreme
Registered: 05/17/10
Posts: 44794
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What CAN you write off as a single-client sole pro?
What SHOULD you write off as a single-client sole pro? This is more of an accountant question, but generally speaking you can deduct expenses paid in the course of earning business income. I'll direct you to the CRA listing to see examples: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/menu-eng.html#expensesWhat CAN you write off as a single-client sole pro?
What SHOULD you write off as a single-client sole pro? Did you not read the fucking thread? Single client anything and you will be deemed an employee for tax purposes by the CRA. This is a more nuanced answer, which would require facts in order to properly characterize the relationship. If there was a disagreement as to whether or not you could, as a SP, work for one client without being deemed to be an employee, a test would be used to determine, among other things, how reliant one party is on the other. One of the prongs of this test is whether or not the IC has other clients, but it is not determinative. Edit: If the foregoing is not clear, maybe an example would help. Let's say you work as a gas fitter for a large oil and gas company that controls most of the work in your area so all your work comes through them simply by way of volume. You would look like an employee. But let's say that you tell them when you come and go, you bring your own tools, and if you don't feel like taking a job you can refuse. Now, despite the fact that you have one client, you are starting to look more like an IC. Make sense?
You need context in order to understand why I answered a certain way, if you care to search under “threads created by furball” you will understand.
Yes you are right in everything you said, your example however is the exception and not the rule. Knowing what most of the posters do here (white collar service jobs) and having a bit of background on c_snapper’s personal situation my response is mostly catered to that..
Back to what you said, there are few things to consider and you pretty much nailed it with who sets the wages/hours/etc. CRA will draw a line in the sand if the notion of “control” exists. More likely than not for professional services with single client base, the “contractor” will be deemed an employee, the exception exists usually for those who have single clients, but do project based work that usually ends within a year and they move on to the next client (I believe it has to be within 18 months max, can’t recall now). Now before anyone shits their pants and provides anecdotal evidence that this isn’t true, go back to my earlier post about “until you get audited”. I know people who’ve been bit and I know those who are still going strong abusing the system who haven’t been caught, it’s all just a matter of time, but using the latter example as evidence as to why you can be a contractor with a single client is stupid.
Full disclosure, I am an accountant, but small business tax isn’t my specialty and I am going off based on memory, however I’ve had a numbered corp for years and did work as a Sole prop for years (in construction – where it’s a lot more common and easy to prove).
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#8266298 - 06/26/15 04:19 AM
Re: please educate me on incorporating myself as a business
[Re: TheRealCSnapper]
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TheRealBenzo
Jr Member
Registered: 03/09/02
Posts: 657
Loc: Toronto, Ontario, Canada
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jesus. you guys really educated me. thanks!
shouts to TheRealBenzo for the VERY informative wall of text, tho there are still some confusion. I look forward to speaking with the accountant. Full disclosure, my new employer is also my best friend's father. This is the personal accountant he's used for YEARS, and since he's a very wealthy man, I'm sure his accountant knows what he's doing. At least now I know what questions to ask the accountant when i do speak to him.
The new gig is a "private equity" firm and have shares in various companies, perhaps they will be paying me through the different companies, and i'll won't be treated as an employee.
whatever i end up doing, it'll be very above board. Apparently one of the other dudes there only paid 13% taxes last year.
If you're going to be in PE in Toronto you may have danced well into my space, and our crowd; in which case there are other considerations which prompt a longer discussion. I have 100 days in Ontario, and as a 12/05/02 poster I guess I owe some sort of an obligation. So I'll paper it if you want for cost.
PM me your firm and accounting firm (they will have to sign off on structure and elections) and I'll put you in touch with our local guys.
_________________________
"Sounds like she's carrying baggage. Keep your trunk closed. " Moof, 2003
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#8266366 - 06/26/15 07:19 AM
Re: please educate me on incorporating myself as a business
[Re: Simon_the_Pieman]
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LNXGUY
Post Master Supreme
Registered: 08/06/00
Posts: 106974
Loc: Barrie, Ont,
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It's like our own version of Suits in here
_________________________
-Bill The GN would OWN you, your children and your children's children. '09 E90 335 d 
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#8266469 - 06/26/15 08:32 AM
Re: please educate me on incorporating myself as a business
[Re: Simon_the_Pieman]
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Risky Business
Provides a Great Work Environment. he/him
Post Master Supreme
Registered: 05/17/10
Posts: 44794
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Harvey, dat man crush love
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