New York, New York (PRWEB) September 19, 2013
Business Review today extends the advisement of leading CRA news source and top Toronto chartered accounting firm, Mark Feldstein and Associates: Avoid the CRA’s harsh tax treatment of PSBs caused by claiming to be an incorporated contractor rather than an employee of the company. PSBs are defined by an incorporated individual’s resemblance to an employee.
Unlike a regular employee, an incorporated contractor benefits from lower tax rates and has added advantages of numerous deductions to reduce taxable income. “It can be tricky to discern the difference between an employee and an independent contractor, yet recently the CRA has recently increased the tax rates for corporations identified as personal service businesses and the result is really double taxation,” says Mark Feldstein, Founder of Mark Feldstein and Associates. “The primary question is whether an individual is providing services to an independent business or if the individual is truly an employee under the veil of a corporation with the purpose of reaping the tax benefits.’ PSBs or incorporated individuals lose many of the tax benefits available to non-PSB corporations.” Several key factors help answer this question depending on whether the individual worker:
A PSB or incorporated individuals may lose many tax benefits available to other corporations such as failing to qualify for the small business deduction or not being able to deduct ordinary business expenses that would further reduce their taxable income. The CRA will be less likely to assess an individual as an “incorporated employee” if that incorporated contractor organizes his or her business relationship with the employer to resemble an independent contractor. For more information on Canadian tax laws, visit http://toronto-accountant.ca/.
Mark Feldstein & Associates, Chartered Accountants, provides a wide range of professional services to businesses and individuals. To ensure clients receive the best advice in each area, Mark Feldstein & Associates hires only seasoned specialists who, in turn, devote a good portion of their time to upgrading their skills through in-depth professional development. Mark Feldstein has been practicing public accounting since 1982. He has experience in a wide variety of industries, including retail, manufacturing, importing and exporting, wholesale distribution, technology, restaurants, law firms, engineering firms, architecture firms, education, IT consultants, wealth preservation planning, forensic investigations, internet service providers and construction.
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