Another Tax Question

[Dave]

The original question was about Canadian tax law.

Aidan,

http://www.cra-arc.gc.ca/tax/busines...er/menu-e.html

All the information is there.

Hire an accountant if you have doubts as to your ability to do it yourself.

[JohnG]

Graham, had a meeting with my accountant today and asked that question. It ultimately depends on your preference but there are benefits to incorporation such as:

- Limited Liability (Not really applicable to affiliates)
- Lower Tax Rate - 18% on first $400,000 of revenue Approx.
- You can pay yourself up to $30,000 in dividends tax free meaning that your first $30,000 of income is exempt for income tax

Those are just a few of the main points that I picked up, the problem with a sole proprietership is that it is straight income and you have to pay income tax according to the regular schedule which goes up to 48%. Also, with either method you should always set a certain amount aside from your revenues whenever you receive them as a provision for taxes so you do not end up with back taxes and penalties. Hope that helps.

[Aidan]

Originally Posted by Dave

The original question was about Canadian tax law.

Aidan,

http://www.cra-arc.gc.ca/tax/busines...er/menu-e.html

All the information is there.

Hire an accountant if you have doubts as to your ability to do it yourself.

Thanks, for that link.

Can you claim these types of expenses if you do not have any sort of company registered?

[Dave]

Yes you can, you don't have to register as a business.

http://www.cra-arc.gc.ca/tax/busines...er/what-e.html

You're a sole proprietor engaged in an activity for profit.

Here's the list of allowable expenses.

http://www.cra-arc.gc.ca/tax/busines...es/menu-e.html

[Aidan]

Pow!

Thanks for that Dave you've made my night.