Incorporated IT Consultants – You’re at Risk!

A View to a Kill

– Duran Duran, 1985

You may not know it but the CRA has taken a view to kill off incorporated IT consultants that don’t measure up to the new rules.

At CPA4IT we can help. We will advise you on what you need to do to stay on the right side of the line to maintain your incorporated status. We also provide an Audit Protection Guarantee, and that is something you can take to the bank. Without the right advice you could be reclassified as a ‘Personal Service Business’ and this is something you do not want. If this happens you stand to lose:

• Business expense deductions,
• Income splitting with family members, and
• The low corporate income tax of 12.2% on the first $500,000 of active business income.

As if that isn’t enough, some of you may end up facing reassessed tax bills of up to $100,000 or more! No one needs that. AT CPA4IT we can make sure that your business is structured properly to maintain your incorporated status. If we find that you are potentially in violation of the rules, we can recommend changes and help you implement them into your business practice. Here’s a short list of some of the rules you must observe to retain your Incorporated status. You must:

• Employ more than 5 full-time employees,
• Pass the ‘Control Test’ of an employer-employee relationship,
• Meet the standards of the ‘Ownership of Tools Test’,
• Provide properly detailed written contracts,
• Pass the test of being able to demonstrate the reality of both Profit or Loss
• Meet the ‘Integration Test’ for the business and employees.

We’ll make sure that you maintain your incorporated status so that you can continue to enjoy all the significant benefits it delivers. Sign up for an Audit Protection Guarantee. If you think you may be at risk, take our Free PSB Risk test to see how you would be classified. The right advice and peace of mind, that’s what CPA4IT delivers. Call us today.