Canadian Economy under the Cons going downhill.

[RNG]

Ok tell me after his private pension contributions and paying family members and employee sharing plan contributions, capital acquisitions and business expenses and the $3500 basic deduction would guyser need to pay in cpp contributions?

If he pays himself an income, he has to pay CPP X2. If he, on paper pays his child a salary, he has to deduct the CPP form the kids salary and pay the company portion. With the same deducteble and the same max as any other salaried worker. He could not pay it if he gets his money out as a dividend, assuming he is incorporated, but dividend expenses are not deductible for the corporation. Assuming he doesn't cheat, reasonable home office expenses is about the only break above what a "normal" employee gets. And keep in mind that capital aquisitions are not a deduction, they must be depreciated over time And things like a company car carries such a tax liability that very few companies have them any more as it is not a real benefit for the workers.

[hitops]

Free advertising, what is your business, currious.

Well there is a difference between working for yourself and working for someone else at that level of income.

Atleast with yourself you can add capitalization to your assets as a business expense, as well as perform many other tax write offs.

People who arn't working for themselves are probably paying higher taxes on those 400 dollars. even at only $20,000 a year before taxes.

Also what are you doing to earn that $400 paper pushing or performing actual labor like those poor JOBers are on 40 hours a week plus 10 to 20 hours of extra time in transit without their work vehicle, without their travel expenses, and without their free phone account, and without their other free write offs for luxuries and other benefits. Plus them needing to pay into extra services you don't have to like EI and CPP.

Lol, the fact that you want to differentiate between 'paper pushing' and 'actual labor' as some kind of value statement, shows you have no concept of how labor is valued. It's not valuable because you personally feel it does something. The value of the work is whatever it commands in the market. Guess what.....now this may shock you.....some people do even less than pushing paper, they use computers all day! What a useless job!

If you don't like making $400 a week as an employee, then start a business where you make $400 a week like this guy. Far preferable to the option of just complaining that other people do it. If you don't want that enormous hassle and stress, than don't complain what about you have because you're not willing to pursue more.

Edited March 22, 2013 by hitops

[shortlived]

Lol, the fact that you want to differentiate between 'paper pushing' and 'actual labor' as some kind of value statement,

I've done both there is a difference.

shows you have no concept of how labor is valued.

No how people who have money value labour and its actual worth are two different economic values.

]

If you don't like making $400 a week as an employee, then start a business where you make $400 a week like this guy. Far preferable to the option of just complaining that other people do it. If you don't want that enormous hassle and stress, than don't complain what about you have because you're not willing to pursue more.

I don't work at $400 a week, it is guyser who runs his own business to earn $400/week.

You need to pick up your reading ability seriously.

[hitops]

I've done both there is a difference.

No how people who have money value labour and its actual worth are two different economic values.

I don't work at $400 a week, it is guyser who runs his own business to earn $400/week.

You need to pick up your reading ability seriously.

I would suggest you take a break, walk outside and take a few deep breaths. Do something active maybe?

[shortlived]

If he pays himself an income, he has to pay CPP X2. If he, on paper pays his child a salary, he has to deduct the CPP form the kids salary and pay the company portion. With the same deducteble and the same max as any other salaried worker. He could not pay it if he gets his money out as a dividend, assuming he is incorporated, but dividend expenses are not deductible for the corporation. Assuming he doesn't cheat, reasonable home office expenses is about the only break above what a "normal" employee gets. And keep in mind that capital aquisitions are not a deduction, they must be depreciated over time And things like a company car carries such a tax liability that very few companies have them any more as it is not a real benefit for the workers.

No I asked

Ok tell me after his private pension contributions and paying family members and employee sharing plan contributions, capital acquisitions and business expenses and the $3500 basic deduction would guyser need to pay in cpp contributions?

Not what he pays cpp for, I asked how much we would pay if he paid into those things.

Edited March 22, 2013 by shortlived

[shortlived]

I would suggest you take a break, walk outside and take a few deep breaths. Do something active maybe?

Already worked out in the gym moving weights for a few hours today,

[hitops]

Already worked out in the gym moving weights for a few hours today,

Just moving them around doesn't count.

[RNG]

No I asked

Ok tell me after his private pension contributions and paying family members and employee sharing plan contributions, capital acquisitions and business expenses and the $3500 basic deduction would guyser need to pay in cpp contributions?

Not what he pays cpp for, I asked how much we would pay if he paid into those things.

If he pays into a private pension, doubtful for someone self employed or a one man corporation, the rules would be the same as for any employee, and I believe in those instances again the payment would be double. Capital aquisitions make no difference and the basic deduction works the same as for any employee. How much depends, as it does with you on how much salary or wages he gives himself.

Of note here, one can't just write cheques to yourself from the company. The CRA deems that to be salary and it is taxes as such, including all relevant payroll taxes.

[TimG]

Of note here, one can't just write cheques to yourself from the company. The CRA deems that to be salary and it is taxes as such, including all relevant payroll taxes.

The CRA rules are carefully set to ensure that one person owning a company pays basically the same taxes as an employee whether the money is paid out as dividends or salary. CPP contributions are doubled (5K a year now) but you don't pay or collect EI. The only difference is you can deduct legitimate business expenses but that is hardly a benefit since you are actually spending money to make money. Edited March 22, 2013 by TimG

[RNG]

The CRA rules are carefully set to ensure that one person owning a company pays basically the same taxes as an employee whether the money is paid out as dividends or salary. CPP contributions are doubled but you don't pay or collect EI. The only difference is you can deduct legitimate business expenses but that is hardly a benefit since you are actually spending money to make money.

I'm not sure if this is true for self employed, but I have been president of a private corporation and that has been my only source of income since 1996. Being in an arms-length relationship with the corporation, paying EI is at my discretion. But CPP is mandatory, and the corporation must contribute an equal amount. I'm not sure if the EI situation is the same with the self employed but one must pay a double CPP if self employed.

As far as dividends go, again the amount the individual is taxed on dividends depends on the taxable income of the individual. With modest income dividends are effectively taxed at a very low rate which escalates at a far greater rate than income tax as taxable income increases. And keep in mind these dividends are paid with after tax money from the corporation's perspective. I'm not sure a self employed person can dividend themselves at all.

(I may be president, but I'm also janitor. My corporation is totally a one man band.)

Edited March 22, 2013 by RNG

[TimG]

Being in an arms-length relationship with the corporation, paying EI is at my discretion.

You can pay if you like but if you ever tried to collect they would tell you that you don't qualify as a director/president of the corporation and refund your premiums.

With modest income dividends are effectively taxed at a very low rate which escalates at a far greater rate than income tax as taxable income increases.

The taxes paid by the corporation offset the lower tax rate on dividend income so your total tax bill (corporate+personal) is roughly the same as if you paid yourself salary (this assumes you qualify for the small business tax credit).

Self employed are not allowed dividends.

The only real benefit of running your own small corporation comes from the freedom of being your own boss.

Edited March 22, 2013 by TimG

[RNG]

You can pay if you like but if you ever tried to collect they would tell you that you don't qualify as a director/president of the corporation and refund your premiums. The taxes paid by the corporation offset the lower tax rate on dividend income so your total tax bill (corporate+personal) is roughly the same as if you paid yourself salary (this assumes you qualify for the small business tax credit).

Self employed are not allowed dividends.

The only real benefit of running your own small corporation comes from the freedom of being your own boss.

Actually, what I found was best is that the type of consulting work I did it was feast or famine. During feast times I could retain earnings in the company, pay the relatively low small business corporate tax and pay myself a modest salary. Then during the famines I would continue paying myself from the retained earnings. Thus my corporation has a far larger investment portfolio than I do personally. It became effectively another RRSP, that is deferring paying income tax when my income was high and thus paying a lower rate by giving myself a lower income.

[Bonam]

Just moving them around doesn't count.

Haha, score. Welcome to the board, hitops. You seem to be a good thoughtful poster, always a great addition to the forum!

[shortlived]

Just moving them around doesn't count.

Why not?

Thats what it is....

nay nay right.

I know I shouldn't feed the trolls.

Edited March 22, 2013 by shortlived

[shortlived]

If he pays into a private pension, doubtful for someone self employed or a one man corporation, the rules would be the same as for any employee, and I believe in those instances again the payment would be double. Capital aquisitions make no difference and the basic deduction works the same as for any employee. How much depends, as it does with you on how much salary or wages he gives himself.

Of note here, one can't just write cheques to yourself from the company. The CRA deems that to be salary and it is taxes as such, including all relevant payroll taxes.

Thanks for not answering the question, and applying a totally different situation.

Actually no those two retirement plans means 0 contribution to cpp for those earnings. The same as every other item listed.

Each has 0 CPP contribution required.

Also yes you can write yourself a cheque to pay for business expenses which are deducatable including capital acquisitions for your business, which includes entertainment, luxury, and office equipment, meals and travel.

Edited March 22, 2013 by shortlived

[TimG]

It became effectively another RRSP, that is deferring paying income tax when my income was high and thus paying a lower rate by giving myself a lower income.

I can't see how that would be cost effective since income earned in activities that are not the core business of the company is taxed at a much higher rate. Edited March 22, 2013 by TimG

[TimG]

Also yes you can write yourself a cheque to pay for business expenses which are deducatable including capital acquisitions for your business, which includes entertainment, luxury, and office equipment, meals and travel.

All expenses must be backed up by receipts and - most importantly - have a business purpose. This means vacations do not qualify nor do 'luxury' items. Capital equipment is deductible over time but one must start out by paying full corporate income tax on the money spent. Deducting a car that is also used for personal purposes requires detailed trip logs - a huge hassle and not worth the effort for many. Lastly: all meals entertainment are only 50% deductible even if they are clearly for business purposes. Edited March 22, 2013 by TimG

[shortlived]

All expenses must be backed up by receipts and - most importantly - have a business purpose. This means vacations do not qualify nor do 'luxury' items. Capital equipment is deductible over time but one must start out by paying full corporate income tax on the money spent. Deducting a car that is also used for personal purposes requires detailed trip logs - a huge hassle and not worth the effort for many. Lastly: all meals entertainment are only 50% deductible even if they are clearly for business purposes.

Oh and what about home office write offs that lower your heating, electricity costs, and rennovation and upkeep costs?

[TimG]

Oh and what about home office write offs that lower your heating, electricity costs, and rennovation and upkeep costs?

So? A single office in a house would only allow 5-10% of those expenses to be deducted and that is only if you have a separate room dedicated for business. CRA used to allow you to deduct your entire internet cost but now that must be shared with the household too. I suspect that for most people the home office deductions would be less than the various fees that must be paid to run a business so deducting a home office does not leave one with more money than they would if they worked for an employer. Edited March 22, 2013 by TimG

[hitops]

Why not?

Thats what it is....

nay nay right.

I know I shouldn't feed the trolls.

Not so fast, we don't want you to starve. Anorexia is not a laughing matter.

[RNG]

Thanks for not answering the question, and applying a totally different situation.

Actually no those two retirement plans means 0 contribution to cpp for those earnings. The same as every other item listed.

Each has 0 CPP contribution required.

Also yes you can write yourself a cheque to pay for business expenses which are deducatable including capital acquisitions for your business, which includes entertainment, luxury, and office equipment, meals and travel.

Start a business, do whatever finagling you want to do but if you pay yourself a salary, or give yourself any money above real business related expenses and not deduct CPP as prescribed by law in the same manner as any other emloyee, plus contribute an equal amount from the corporation you are in violation of the law. I can not conceive of any way of legally arranging things to get a living wage out of a company without having to contribute CPP. The majority of my friends and associates were also self employed, one man private corporations or partnerships. Most of them worked out of their homes. Most of them paid highly trained tax consultants. And all paid CPP.

[shortlived]

Not so fast, we don't want you to starve. Anorexia is not a laughing matter.

get a life.

also stop harassing me you twit.

Edited March 22, 2013 by shortlived

[shortlived]

Start a business, do whatever finagling you want to do but if you pay yourself a salary, or give yourself any money above real business related expenses and not deduct CPP as prescribed by law in the same manner as any other emloyee, plus contribute an equal amount from the corporation you are in violation of the law. I can not conceive of any way of legally arranging things to get a living wage out of a company without having to contribute CPP. The majority of my friends and associates were also self employed, one man private corporations or partnerships. Most of them worked out of their homes. Most of them paid highly trained tax consultants. And all paid CPP.

I actually have a business.

Why do you make tons of stupid assumptions about me, why not keep this focused on the issue rather than poking at me.

[RNG]

I actually have a business.

Why do you make tons of stupid assumptions about me, why not keep this focused on the issue rather than poking at me.

I guess I don't see what you consider the issue to be.

[shortlived]

I guess I don't see what you consider the issue to be.

As to?

My political issues are not my issues, they are what I view are public issues.

My personal positions as it effects my life are quite different than my social positions.

Politics isn't about self advancement it is about making a better society.

My major platform issues are federally

-eradication of poverty

-removal of income taxes

-removal of the public debt

-equalizing citizens rights

-simplifying the justice system and justice reform

- simplifying government into a bank

-enfranchisement of the common person

-and making society more productive with less waste and environmental destruction.

Originally I had a 15 year timeline, but the conservatives poor fiscal management may have extended that to 18 to 20 years.

Edited March 23, 2013 by shortlived