Most of the posters have given their valuable views on Employed vs Self Employed situation and you should contact an accountant to find out what is best for you.

I will only add another dimension from my experience in Mortgage field. If you already own a house then it does not matter as it would not apply to you. However, t if you are planning to buy a house in near future and would like to take a mortgage, then banks and other mortgage lenders would give you mortgage without hassle if you are employed but it would be difficult if you are self employed as they would take 2 years average of your personal income to qualify you for mortgage. And with the income levels you mentioned, you would not have a chance to qualify for a mortgage even after 2 years with good rates or without CMHC premium even if you are willing to put 20% or more as down payment.

So, talk to your accountant about this as well if you plan to buy a house in near future.

Good Luck.

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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

350/- incorporating online fees ..Google cyberbahn ...

Both FH and Pramodjee ( as much as others ) are very precise in their posts ....

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Fido.

Chaps,
let me tell u guys my story . I was laid off 2 months back. Since the job was permanent so I get servence package that covers full salary for couple of months.
Anyway since then I have got two offers one permanent ( 90k basic) & one contractor ( 50 dollar per hour). Job profile was in c++ embedded field.

I was toying with the idea of contractor one. But then decide to accept permanent offer. While gone though this phase I also get training on what to look if wants to move in contractor job

I think if one is not sure in the beginning if contractor job is for you. Better open a sole & properitry company. that can be closed any time

The incorporation have its obligations when opening as well as when closing the company & filing taxes.

Since permanent jobs was offering similar facilities of previous job,( dental, medical, insurnce, rrsp contribution , holidays etc). So I just chose that one. may be contract job have more money, but it depends on personal taste , as I want bit relax style.

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infocan

Just a note of advice for anyone who wants to start a company. Though it saves money there are several fiduciary duties that go with having a company. This includes maintaining track of your expenses and ensuring you are providing proper accounting for dealings. In addition, having a corporation (agency) is not a free for all spend as you like kingdom. You have to act in the best interest of your company. Considering it is your own I am sure most of us will but something to keep in mind.

As far as getting mortgage is concerned, when you start a company, you are an officer of the company i.e. CEO, President and Director. You should pay yourself so you can show your income for credit purposes and tax law may also require this (check with your attorney or accountant). This history should be enough for mortgages.

Best of luck!

The posts above basically cover a lot of the main points, but I just want to summarize and highlight some items as well:

As a self employed person:

1) can incorporate rather easily and enjoy a tax rate of 15.5%
2) can split income with family members effectively via a salary or dividend
3) can pay yourself and other shareholders a tax-free dividend of about $40,000 each
4) as mentioned before, can operate via a home office and deduct a pro-rated portion of house expenses such as mortgage interest, repair/maintenance, utilities, etc.
5) a wider scope of deductible expenses, as long as they are reasonable, and business-related, among other criteria.

Some things to be mindful of, however:
1) cost of incorporating and maintaining corporate records; i.e. be mindful of not just financial cost but things like time/effort
2) regulatory and compliance requirements (corporate minutebooks and taxation)
3) admin-related (paperwork, bookkeeping, etc.)


Finally, you should speak to an accountant who is familiar with small businesses to advise you based on your unique situation and goals.

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Madan Chartered Accountant team
http://www.madanca.com" rel="nofollow">LINK

Madan
I see your post and find it quite interesting . Issues is to find a accountant who is familiar with everything . Any pointers !

AG

P.S: BTW while you are at it I would also like to know the reason of you digging so old threads continously

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Growing Old Is Mandatory ..Growing UP is Optional

Hello AG,

With regards to finding accountants who are familiar with everything, one thing you should do, or inquire about, is a brief consultation with them. That will be your chance to see if they have the knowledge and experience, and you can ask questions geared towards that.

AG, I noticed that although the posts may be old, there are always people looking for answers. I thought maybe I should add some value this way. By all means, if you mind me going through some of the old posts, please do let me know and I will stop.

Thank you for your comment.

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Madan Chartered Accountant team
http://www.madanca.com" rel="nofollow">LINK