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To: Land Shark who wrote (71557)	2/18/2011 6:39:51 PM
From: Sexton O Blake	Respond to of 233807

Doubt that. What (I think) some of you are failing to say is that EITHER you take money out as income (via payroll) OR you have the company pay the tax (~18%) and it SITS in the company. If you want the money, you extract it as a DIVIDEND after that. AFAIK, all things being equal either way the CRA is getting their money. It isn't like "you pay 18% tax and that is it." IMO the beauty of incorporation is that you can control the money flow out of the company better. Under SELF - once there is income (you work and get paid; you sell the security - close the trade) that is the trigger for income. All of it is taxed at that point. Under a company, you sell - you will be taxed on the profits (assuming you don't take the money out), at 18%, but you can still keep that money in the company. If you have an AMAZING year, you can still draw as little payroll as possible. Otherwise you can keep it all churning - increasing your capital. Similar to say an RSP (/registered account) albeit you need to keep the required say 18% aside so you can meet your tax liabilities. Really depends on the kind of years you are having. There is a point where it is probably better to shift to incorporation. Self employed is easier overall on an accounting/tax reporting basis. I actually had many Decembers where I dreaded billing everything because I wanted to keep my income under a certain level - the billing cycle was the ONLY way to control things. But then one company I dealt with got tired of that and forced me to bill within 30 days. Oh well. But now I am incorporated, it doesn't matter as I can control that myself. What I HATE about Self is that you can't do the T1 until you finish the T2124. So if your "expenses" are a mess then you are now stuck and have to get that cleaned up before reporting your income tax. In the case of INCORPORATION you expense the company and draw a salary. I just need to print my T4 and I am done. The company is a separate process. For this reason alone I should have incorporated years ago. Another biggie is not having to be forced to have a Dec 31st year end. But to each their own and every case is different. Mr Shark - if I made a FACTUAL error please point it out since it is what I believe. Sexicus Osiris Blakicus <SPAN style='font-family:verdana;color:red;font-size:64px;align:center'>Disclaimer:</span> <SPAN style='font-family:verdana;color:blue;font-size:8.5px;align:center'> "Sold 1/2 of FEI.TO - that is not suggesting anyone else should dump that POS and RUN" and "I flipped MKI.V once today and re-bot and am currently underwater ... for the rest of you ... you should consult a financial adviser since that security may fall outside of your intended long term goals as you described to your broker when setting up the account" and Hurt in a Car? Call William Mattar 444-4444. </span> (You may need to increase your browser's font size to read this - but consult legal advice first) OUI? (<- I left early today to meet my son's gr 7 French teacher ... all for the children)