re: Why you should incorporate (as a contractor) VIEW POST

re: I bet the accountancy firm can handle the paper pretty easily for you too. They do indeed! They handle everything and bug me for the information ...

Is the government cracking down on contracting for the benefit of contractors or some other reason?

You are correct!

It has to do with the government's bottom line more then anything. For years, the Cdn govt has been irked that one-man corporations were using the tax benefits for businesses, but they were really one-man corporations doing employee like work. For example, expensing business related purchases, tax breaks for small-businesses, etc

Basically, since most IT contractors do very similar work to their employee counter parts (not inc freelancers, they are OK), the government wants to tax them as employees. They've been picking on IT contractors since we're one of the largest groups of one-man corporations.

There are still advantages to incorporating, but us in Canada just have to keep track if we look too much like a employee. If we get caught, they apply pretty stiff penalties.

I actually look similar to my employee teammates where I work. I do weekend work too (but get paid for it at my hourly rate). B/c of my seniority on the team, I am expected to give coaching and mentoring (but I don't receive it) to juniors, but I too can bill that at a hourly rate (formal mentoring that is, I don't bill for watercooler talk :) )

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