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It was my exclusive full time job for about a year and a half. I was paid an hourly rate, by cheque, bi-weekly.

Thank you, that's helpful. I think given the length of your employment some things can be understandable, but without getting into too many more specifics, let me ask you this:

Do you believe that you could have continued working for this company, exclusively, year after year, earning no other income throughout the year on which you pay taxes - and that you could possibly continue do so without ever being required to pay something throughout the year?

Until this point in the thread you have discussed the manner in way that your response is yes (see page one for example about how many companies don't take deductions if requested), but maybe I'm mistaken so I'm asking point blank.

Is that what you believe? Do you think that's a possible option?

Edited by BC_chick
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Do you believe that you could have continued working for this company, exclusively, year after year, earning no other income throughout the year on which you pay taxes - and that you could possibly continue do so without ever being required to pay something throughout the year?

I know people still working there who are still doing that. Hasn't been an issue yet. If it was a problem, why wouldn't CRA mention it?

Until this point in the thread you have discussed the manner in way that your response is yes (see page one for example about how many companies don't take deductions if requested), but maybe I'm mistaken so I'm asking point blank.

What I said on page one is that I know people who have this option at their jobs.

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Just to add something to my previous post, your employer was still very much breaking its obligations if they paid you by the hour (no risk of profit or loss), and you worked for them exclusively (another criteria of employment) for an extended period of time (yet another).

However, my point is that the length of your tenure was probably the only thing that prevented you from being required to pay instalments as an independent contractor. You know that you could not file taxes like that indefinitely without being required to contribute throughout the year. Hence, my question.

As for your employer, they really are pushing it. Even if I speed along the road and no police stop me, I'm still speeding.

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I know people still working there who are still doing that. Hasn't been an issue yet. If it was a problem, why wouldn't CRA mention it?

What I said on page one is that I know people who have this option at their jobs.

While I could see how the employer could push its luck with paying employees as contractors (many companies do but it's still not legal even if they're not penalized), I have a difficult time believing that CRA would not require your former associates to pay instalments in their earnings if they continue to work independently year after year and they pay taxes over $3k/year.

Sorry, I'm just gonna have to call BS on that we go our separate ways.

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Uh, Bryan, you don't get my main point.

We should vote once a year on the same day that the government (politicians) send us a tax bill.

Moreover, to show that we live in a democracy, and we paid our taxes, we should receive a purple finger to show that we paid our taxes, and we voted.

=====

To me, in this 21st century world, the measure of a civilized (democratic) society is not voter participation, respect for minorities, gay rights, multiculturalism, or Left/Right ideology; it is tax compliance.

Canada is a civilised society because most Canadians largely pay their taxes. The same can be said of people in Sweden and the US.

People in f*up'ed countries don't pay taxes.

I'm not sure whether you're reacting to the news of 350 rich Canadians not paying taxes?

And I'm not sure we can catch up them by sending out purple fingers.

I'm sure they claim some income, to try to avoid detection.

However the government, CRA and media seem very reluctant to expose who they are.

I'm guessing some political and media bigwigs are on the list.

.

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It was my exclusive full time job for about a year and a half. I was paid an hourly rate, by cheque, bi-weekly.

Oh, so I was right: a combination of not enough time and not enough money being earned to go over the $3k threshold over the two year period (with the possibility of other income having withholdings in year two).

Yeah, you sure stuck it to the system! /sarcasm

The funny thing is, you're the one who was taken advantage of by your employer (pretending to be the general contractor) and you don't even know it.

Or maybe you do by admitting that it was a "PITA."

Nothing quite like being a contractor, not getting any benefits, not being eligible for EI (but at least not paying into it), while paying both portions of CPP, having to pay accountanting fees to get your tax return done because it's too complicated to do now compared to just getting a T4 slip and filing it yourself.

The contractor economy is a win for business at the expense of the little guy. It benefits the company employing you and it benefits accountants.

On behalf of my brethren we thank you for your patronage!

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Oh, so I was right: a combination of not enough time and not enough money being earned to go over the $3k threshold over the two year period (with the possibility of other income having withholdings in year two).

Yeah, you sure stuck it to the system! /sarcasm

The funny thing is, you're the one who was taken advantage of by your employer (pretending to be the general contractor) and you don't even know it.

Or maybe you do by admitting that it was a "PITA."

Nothing quite like being a contractor, not getting any benefits, not being eligible for EI (but at least not paying into it), while paying both portions of CPP, having to pay accountanting fees to get your tax return done because it's too complicated to do now compared to just getting a T4 slip and filing it yourself.

The contractor economy is a win for business at the expense of the little guy. It benefits the company employing you and it benefits accountants.

On behalf of my brethren we thank you for your patronage!

No. I was well over $3K per year.

I never claimed I stuck it to anyone. I was only letting you know that I (and people that I know) have in fact done the very thing that you claimed was not possible. I never said I liked the situation, only that it happens.

I also never claimed it was my preference, or that I would continue to work that way, only that I know others who do. That you made assumptions about things I never said, and projected other intent behind my patience with your arrogance is not something that I can control.

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Thank you, that's helpful. I think given the length of your employment some things can be understandable, but without getting into too many more specifics, let me ask you this:

Do you believe that you could have continued working for this company, exclusively, year after year, earning no other income throughout the year on which you pay taxes - and that you could possibly continue do so without ever being required to pay something throughout the year?

Until this point in the thread you have discussed the manner in way that your response is yes (see page one for example about how many companies don't take deductions if requested), but maybe I'm mistaken so I'm asking point blank.

Is that what you believe? Do you think that's a possible option?

While I could see how the employer could push its luck with paying employees as contractors (many companies do but it's still not legal even if they're not penalized), I have a difficult time believing that CRA would not require your former associates to pay instalments in their earnings if they continue to work independently year after year and they pay taxes over $3k/year.

Sorry, I'm just gonna have to call BS on that we go our separate ways.

I ran my business this way for quite a while. The CRA wont bother you unless your business gets beyond a certain size. They certainly DO have the means to penalize you though. You are supposed to submit a T5018 that lists all your payments to contractors.

The trick to doing this as legally as possible is to make sure it looks like a business relationship and not an employer/employee relationship. Pay your "contractors" on a project basis, and make sure they have a business number and that they charge you GST, and don't write "X hours @ Y per hour" on their invoices.

This is extremely common for small businesses and there seems to very little enforcement... Mostly likely because you are screwing over your workers not so much the CRA.

Edited by dre
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This is extremely common for small businesses and there seems to very little enforcement... Mostly likely because you are screwing over your workers not so much the CRA.

You're not stating anything that refutes any of my claims and you're not telling me anything I didn't already know. As I said in my quote which you referred to, it's still illegal even if the company is is not penalized. In Bryan's case, he was paid hourly and worked exclusively, full-time for the employer. That's no grey area, if investigated, and established to be the case, that's cut and dry employment and the employer would be on the line for all the deductions s/he did not make, plus interest, plus fine and penalties. As I said before, just because I don't get caught speeding doesn't mean that I wasn't speeding.

The part I did call BS on (in that same post) was anyone working exclusively as a contractor for several years, paying more than $3K in taxes year after year and the CRA not requiring that contractor to pay instalments after a couple of years.

I was talking about two different things, first one being the employer, second one the employee.

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The contractor economy is a win for business at the expense of the little guy. It benefits the company employing you and it benefits accountants.

On behalf of my brethren we thank you for your patronage!

I don't agree, both sides could potentially benefit from it. If the company only offers the requirements of Employment Standards - 2 weeks vacation and no benefits - that's only around 8% added to the employee's hourly (2 weeks, 10 stats) plus 5% employer CPP. As contractor, they can reduce their taxable income considerably with the additional write-offs beyond T2200.

I've ran the analysis, there are many times both sides are benefitting from it.

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I've ran the analysis, there are many times both sides are benefitting from it.

Fair enough.

But from the point of view of benefits (or lack thereof) and the ease of which it is to terminate contractors, and the need for contractors to get legal and accounting advice and filings, for most people its not a benefit and us accountants are not much more than parasites on the system.

I have plenty of PSB or near-PSB corporations (and I'm sure you know what that means).

They do not benefit by me charging them $2,000 per year for corporate financial statements, tax return, T4 slips, and a T1.

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For sure, I'm talking cases like Bryan for whom you would probably charge no more than $400 if he brought you his own income-statements and one BN.

I covered the costs of my own mat-leave (prior to changes to EI for self-employment) and that cost me more than anything I possibly ever saved in paying less income-taxes. Employment is definitely advantageous in many instances.

Edited by BC_chick
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For sure, I'm talking cases like Bryan for whom you would probably charge no more than $400 if he brought you his own income-statements and one BN.

Less. The cost of the accountant was not the part that made it not worth it to me, I was just worried about not putting enough aside to pay the tax bill.

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Less. The cost of the accountant was not the part that made it not worth it to me, I was just worried about not putting enough aside to pay the tax bill.

I'm not sure why you're telling me given the context of the post to which I was replying.

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msj and Bryan, would you guys please rent a conference room?

I'm not sure whether you're reacting to the news of 350 rich Canadians not paying taxes?

And I'm not sure we can catch up them by sending out purple fingers.

I'm sure they claim some income, to try to avoid detection.

However the government, CRA and media seem very reluctant to expose who they are.

I'm guessing some political and media bigwigs are on the list.

.

If only 350 very rich Canadians - of 35 million - don't comply, then I would say that Canada is civilised. The CRA lawyers/accountants/forensic people can manage 350 thick files.

Presumably, using your numbers, there are about 3500 very rich US citizens and about 100 Swedes who evade taxes. Similarly, the IRS and Swedish authorities can deal with this.

======

Let me state once again my lemma: The basis of a civilised society is tax compliance.

Ergo: Canada, US, Sweden are civilised. (These three countries are among the very few countries/societies in the world where people generally pay their taxes honestly.)

Edited by August1991
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If only 350 very rich Canadians - of 35 million - don't comply, then I would say that Canada is civilised. The CRA lawyers/accountants/forensic people can manage 350 thick files.

Presumably, using your numbers, there are about 3500 very rich US citizens and about 100 Swedes who evade taxes. Similarly, the IRS and Swedish authorities can deal with this.

======

Let me state once again my lemma: The basis of a civilised society is tax compliance.

Ergo: Canada, US, Sweden are civilised. (These three countries are among the very few countries/societies in the world where people generally pay their taxes honestly.)

The 350 in the Panama Papers are the ones whose real incomes we don't know about and they don't pay Canadian taxes on.

This is what we do know about the incomes of the richest people in Canada.http://www.canadianbusiness.com/blogs-and-comment/not-as-wealthy/

The concentration of wealth in the top 10% cant be overstated. The collective value of investments, properties and other assets minus liabilities controlled by this group is equal to the total net worth of 70% of the population.

It's disturbing as it is.

Now add 350 more ...

.

Edited by jacee
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I was agreeing with you.

Less. The cost of the accountant was not the part that made it not worth it to me, I was just worried about not putting enough aside to pay the tax bill.

Thank you for clarifying in the other post and thank you also for making the case for instalments/payroll deductions.

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