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Accounting question

As side notes to the problem we are taught to be workers (Slaves) not bosses (Masters).

Another side effect of the lack of knowledge of the general public is on how things really work. I can't count the number of times people have told me how lucky I was. I could take time off whenever I wanted (Yes but not get paid, even a vacation was unpaid leave.) The "You can write off all kinds of stuff" idiocy. You get a free car BS. Read up on taxable benefits.
 
As soon as your business gets any more complicated than matt365's, it's time to incorporate. As soon as you're using a vehicle for business purposes, as soon as you have to buy assets that are longer-lasting, as soon as you are dealing with customers that want WSIB and insurance coverage, etc. If you're asking questions about depreciation, it's probably time.

The company that I work in now (and for the last 14 years), was a sole-proprietorship when I joined it as the first employee. First order of business was to get incorporated.

If there's ever a problem with a customer that leads to a lawsuit, if it's an incorporated business, they're suing the corporation. If you aren't incorporated then they're suing YOU. Yes, there can still be situations of "piercing the corporate veil" but if you're not incorporated then there's nothing to pierce. Your house is on the line.

Re vehicles - at least in our organisation, we established that it was better to let people buy their own vehicles and then pay mileage at the CRA allowed rate, as opposed to dealing with the taxable-benefit situation. But, a corporation can do that.
 
Is it time to put the house in the wife's name? I remember getting and following that advice years ago. Now the Squeeze and I are thinking it's time to my name back on.
 
timtune said:
Is it time to put the house in the wife's name? I remember getting and following that advice years ago. Now the Squeeze and I are thinking it's time to my name back on.
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50+ years ago a friend did that because he was concerned about a sudden turn of events leading to a lawsuit. Unfortunately the turn of events was his wife running off with her boss. He had to fight tooth and nail to get some of the equity. It's different now but.....
 
Brian P said:
As soon as your business gets any more complicated than matt365's, it's time to incorporate. As soon as you're using a vehicle for business purposes, as soon as you have to buy assets that are longer-lasting, as soon as you are dealing with customers that want WSIB and insurance coverage, etc. If you're asking questions about depreciation, it's probably time.

The company that I work in now (and for the last 14 years), was a sole-proprietorship when I joined it as the first employee. First order of business was to get incorporated.

If there's ever a problem with a customer that leads to a lawsuit, if it's an incorporated business, they're suing the corporation. If you aren't incorporated then they're suing YOU. Yes, there can still be situations of "piercing the corporate veil" but if you're not incorporated then there's nothing to pierce. Your house is on the line.

Re vehicles - at least in our organisation, we established that it was better to let people buy their own vehicles and then pay mileage at the CRA allowed rate, as opposed to dealing with the taxable-benefit situation. But, a corporation can do that.
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I started out by incorporating. It was cheap insurance, nothing to go after at the time. Protected by poverty.

Your house may be on the line otherwise but so is your RRSP. If you cash in half of it to pay a judgement the government takes the other half as a source deduction.

I had a company van for a while, switched it to my name and paid myself Kms @ $0.50. I don't know if that works for a more expensive vehicle, a $80K Sprinter. The government stand is ridiculous. It makes sense for the CEO that only drives to the office and back but trades are different.

Paying an employee per Km can work out since cars can last ten years or longer, negating a lot of the depreciation built into the government formula. In another job I drove an old VW beetle for a while and my paid mileage ended up paying for the car, gas, insurance and repairs. It was a service vehicle so the company didn't care what it looked like.

If anyone is moonlighting and reading this, pay attention if you're thinking of going full time. You go from nerf ball to hardball with taxes, liabilities and finances. As Canada gets more lawsuit prone and self entitled things will get worse.

And gear up for more paperwork, safety regs, clearances etc
 
We use both company cars and paid Kms , if your in the ownership group you get a car . You are making enough you don’t care about the taxable benefit part , buying an AMG Benz or BMW 650 every two yrs would be silly.
Most important employees get mileage , we don’t care if your car has big depreciation, tracking the kms is on you and if we fire you we don’t have to go find a car you left in Windsor on purpose. Owners aren’t going anywhere.
Work vans/ trucks are a different animal .

I’m not sure there has a more important time in CDN history to form a Ltd. Company . What you can be taken to task for is now crazy and often well outside your control. We just moved our directors and operators ins from 1m to 2.5m per person because the ins company says it’s a good idea .


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crankcall said:
We use both company cars and paid Kms , if your in the ownership group you get a car . You are making enough you don’t care about the taxable benefit part , buying an AMG Benz or BMW 650 every two yrs would be silly.
Most important employees get mileage , we don’t care if your car has big depreciation, tracking the kms is on you and if we fire you we don’t have to go find a car you left in Windsor on purpose. Owners aren’t going anywhere.
Work vans/ trucks are a different animal .

I’m not sure there has a more important time in CDN history to form a Ltd. Company . What you can be taken to task for is now crazy and often well outside your control. We just moved our directors and operators ins from 1m to 2.5m per person because the ins company says it’s a good idea .


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If the employee owns their own wheels and circumstances means a culling of the herd, they don't have to buy a vehicle to look for a new job. It's a more stable situation for them.

It's bad enough to lose your income but having to buy a new Camry at the same time would be brutal to most.

Someone told me that "Inc." was better protection than "Ltd." for a legal barrier.

Re: Directors:

Project manager at Toronto swing stage tragedy sentenced to 3-1/2 years in jail | Canadian Contractor

www.canadiancontractor.ca www.canadiancontractor.ca

Massive fines and jail time for the 2009 swing stage collapse and the dust hasn't settled yet.

I wouldn't want to be a corporate safety manager anywhere today.
 
Essentially Ltd . Is Inc . It’s a corporation where the shareholders liability is limited to thier investment in the business .
Potato/ potato in Canadian court .


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I’m doing the paperwork this morning on board directors, we now have to sign consent to serve documents for Ontario . So you can’t deny you were elected to the board , between the new workplace compliance sexual awareness protocol, the workplace fair play and non discrimination act and the inclusive rules , it’s 12 hours of ‘ on line learning ‘ to be sure you don’t call a rhino a unicorn .
I swear our biggest business expense is HR , compliance and safety. Non revenue generating positions, but if they keep you from being sued ….


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crankcall said:
I’m doing the paperwork this morning on board directors, we now have to sign consent to serve documents for Ontario . So you can’t deny you were elected to the board , between the new workplace compliance sexual awareness protocol, the workplace fair play and non discrimination act and the inclusive rules , it’s 12 hours of ‘ on line learning ‘ to be sure you don’t call a rhino a unicorn .
I swear our biggest business expense is HR , compliance and safety. Non revenue generating positions, but if they keep you from being sued ….


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It has become complicated, particularly for small and medium-sized businesses that are big enough to get blood from if there is a situation.

While I'm all for workers being treated fairly and workplaces free of harassment, I'm not for the Samfiru crap - I believe the province should have reasonable laws governing what an employer can as an employee to do, and how much severance one gets based on position and years of service.
Training for execs is annoying but necessary as the folks who started their careers before 2000 (Boomer and X Gen) grew up under different rules. I learned about pronouns in grade school -- I had to learn their new meanings 30 years later. I drove a tow-motor around my shop for decades without running anyone over or dropping a rack, but today if I want to move a skid I need a snot-nosed 'expert' who can barely operate one to certify my skills. My flirty outgoing 50-ish manager friend (SHE) was ordered to take sensitivity, inclusion, and workplace harassment training after a 20-something colleague complained THEY were offended by an ass slap she delivered at a company softball game.

I'll be done working soon. Just in time as I don't think I'm ready for the new order after the XGen passes the torch to Millennials.
 
ass slap at the company softball game .... oy vey . But that is ligitimately how it starts right now. You dont hug anybody at the Christmas party that reports to you , or your new name Monday is co defendant. This brave new world thing .

bit of a thread jump but we are having a lot of touble getting volunteers for minor sport, Scouts (we all know why) , Guides and Brownies, Hockey is getting dragged through the mud. Referee and umpire abuse .
We are instituting a "2 deep rule" , (not two fingers deep you perves) , where no instructor at our sailing school ever enters a shed, the clubhouse or out on a boat with a kid, without another person present. Male or female, no exceptions. 19 yrs later they are in therapy and 'remember' something, and everyone there around that time gets hung. There is another paperwork trail that is taking hours to sort out, the working with youth police checks , now signing off they watched the I indentify as a bisexual unicorn, call me triple YYY , video. Anti bullying... it really never ends.

I'd had never learned to skate if it weren't for super supportive coaches saying , what do you mean the pond ice is only 3/4" thick? just skate faster you pussy, dont make me send a fat kid out there to show you how a cross check feels , the sensitive coaching we got.
 
I see the thread going off the rails slowly so to bring it back.

Theoretically which would need incorporating…

Me starting a small contracting gig (painting, framing, insulation, etc)

OR

Someone starting a consulting business as a PENG?

Obviously both have associated risks, but some are more than others.

My buddy had a Corp where he would hire guys from the local men’s shelter for labour intensive jobs. He also took his 300k/year job through the Corp so he could sprinkle the actual income into his name slowly and save on taxes.

Need to learn the ropes to not get burned as unfortunately lessons are expensive at times.
 
mimico_polak said:
I see the thread going off the rails slowly so to bring it back.

Theoretically which would need incorporating…

Me starting a small contracting gig (painting, framing, insulation, etc)

OR

Someone starting a consulting business as a PENG?

Obviously both have associated risks, but some are more than others.

My buddy had a Corp where he would hire guys from the local men’s shelter for labour intensive jobs. He also took his 300k/year job through the Corp so he could sprinkle the actual income into his name slowly and save on taxes.

Need to learn the ropes to not get burned as unfortunately lessons are expensive at times.
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I would incorporate both. You have to protect your house. Secondly, having an incorporated business can make it easier to sell if the time comes. Also forces you to do book keeping properly and keep personal and corporate separate. If you really want to play the long game, spin up a family trust to hold the consulting company and reno company (and cottage company and investment property company and . . .). Family trust opens up options for spreading income and if you happen to build a monster allows you to multiply the small business cap gain exemption (currently $913k per person) so you won't pay much tax on the sale of the business.
 
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A lot of free and sometimes dubious advice here IMO.

Your original question was in regards to depreciation on tools. This is Capital Cost Allowance (CCA)

Capital cost allowance (CCA) classes - Canada.ca

Commonly used capital cost allowance classes, their descriptions and rates.
www.canada.ca www.canada.ca

Classes of depreciable property - Canada.ca

Information for individuals and partners claiming capital cost allowance on the depreciable property used in their businesses and the criteria for each class.
www.canada.ca www.canada.ca

How to complete the capital cost allowance (CCA) charts - Canada.ca

How to complete the Capital cost allowance (CCA) charts
www.canada.ca www.canada.ca

Your friend can save himself a lot of grief by spending a few bucks speaking to an accountant and perhaps a lawyer. Pay now and set business up right, or pay later and perhaps pay more than you have to.
 
ReSTored said:
A lot of free and sometimes dubious advice here IMO.

Your original question was in regards to depreciation on tools. This is Capital Cost Allowance (CCA)

Capital cost allowance (CCA) classes - Canada.ca

Commonly used capital cost allowance classes, their descriptions and rates.
www.canada.ca www.canada.ca

Classes of depreciable property - Canada.ca

Information for individuals and partners claiming capital cost allowance on the depreciable property used in their businesses and the criteria for each class.
www.canada.ca www.canada.ca

How to complete the capital cost allowance (CCA) charts - Canada.ca

How to complete the Capital cost allowance (CCA) charts
www.canada.ca www.canada.ca

Your friend can save himself a lot of grief by spending a few bucks speaking to an accountant and perhaps a lawyer. Pay now and set business up right, or pay later and perhaps pay more than you have to.
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He's actually started and will have to back track, hopefully not too far or expensive. He is trying to make as much coin as possible and hasn't been keeping up the books. He will be OK if he settles down but if he got an audit he'll be spending a lot of unpaid time catching up and answering questions.

At one time a tradesperson could be a one man band. Now they need to be a lawyer, psychologist and accountant as well.

Sexual issues are so touchy. Pity the ESL guy that uses the wrong word.

Sexual assault is only workable in the government. You can't boycott them and their legal bill is paid by you, the taxpayer.
 
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