OT contracting and incorporation

[Fraser Campbell]

On Tuesday 25 September 2007 16:41:41 Neil Watson wrote:

> I have a question to direct to the self employed members of the group.
> Are you incorporated?  As an IT contractor are there reasons to
> incorporate or not to incorporate?

I incorporated because it was a requirement to get the contract I was 
interested in.  For the company hiring you it helps maintain the appearance 
that you are not an employee (I think that's the perceived benefit anyway).

For you the benefit might be the ability to decrease taxes.  Invest within 
your company and growth in your savings there will be taxed at somewhat lower 
corporate rates - I think as of today if you had no other income you could 
take out 30K in dividends without paying any taxes (of course corporation has 
paid taxes on that).

As far as sole-proprietership versus corp I don't think there is much in the 
way of increased deductions (except accounting expenses of course), every 
business expense can be written of regardless of structure ... me thinks.  Me 
not lawyer of course ;-)

Saving and investing money within the corporation can be an alternative to 
RRSP - rules always being subject to change though I don't really trust this.

In my understanding, having a corporation does not decrease your liability one 
iota so there's no benefit from that point of view.

-- 
Fraser Campbell <fraser-Txk5XLRqZ6CsTnJN9+BGXg at public.gmane.org>
Georgetown, Ontario, Canada
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