Xref: utzoo ont.general:1027 can.general:1714 Path: utzoo!dciem!schuck From: schuck@dciem.dciem.dnd.ca (Mary Margaret Schuck) Newsgroups: ont.general,can.general Subject: Re: The Taxman Cometh for NSERC Award Recipients Message-ID: <2506@dciem.dciem.dnd.ca> Date: 11 Sep 89 14:31:39 GMT References: <1989Sep8.084613.10300@lsuc.on.ca> Reply-To: schuck@dretor.dciem.dnd.ca (Mary Margaret Schuck) Followup-To: ont.general Organization: D.C.I.E.M., Toronto, Canada Lines: 52 In article <1989Sep8.084613.10300@lsuc.on.ca> dave@lsuc.on.ca (David Sherman) writes: >kim@watsup.waterloo.edu (T. Kim Nguyen) writes: > >> - Having your own company allows you to make use of MANY >> deductions, such as (part of) rent, car costs, phone, >> stationery, etc. which can be considered valid buisness >> expenses. If you do any consulting work, make sure to have >> the hirer pay your company (instead of you directly). > >This statement is generally correct but reflects a confused >meaning of the word "company", which normally means the same >as corporation. You want to have the funds paid to you as >an independent contractor, or "paid to your business", in >such cases. If you are carrying on business through a corporation, >that's an entirely different situation. Of course, in either case, >effective 1991 you're going to have to collect an extra 9% GST if >you're not paid as an employee. > >Also, whether you're classified as an employee or not depends on >the facts, not just on what you and the payer call yourself. >If the facts determine that you're really an employee, you'll >be taxed as such even if you issue invoices and are paid without >source deductions. All right, how does one do this? I was burned badly this year by a combination of RevCan and my former(!) company. Initially I was hired by this company as a contractor. I worked from my home and used my own equipment and supplies etc. at this time. Later, when they paid me for the "contract work" I noticed that they had taken source deductions, but since the two months pay was accompanied by an offer of permanent employment I decided not to get it straightened out. Later, of course, my T4 included all my income from the "contract" period as well as when I was an employee. By then, my employer refused to do anything about it since "that's they way it is in our books and we can't change it" and since RevCan believed the evidence of the T4, I lost almost $500 in tax credits. Under similar circumstances, what should one do to ensure that if hired as a contractor, one is treated as one in the eyes of Revenue Canada (and the employer for that matter)? Also, is it possible to claim business losses from self-employment against earned income from another source? Mary Margaret. -- ____________________________________________________________________________ My mailer hates everyone. Try to deceive it if possible. schuck@dretor.dciem.dnd.ca {decvax,attcan,watmath...}!utzoo!dciem!schuck ____________________________________________________________________________