Investment and Financial Advisors

[TSXCman]

Hey guys,

I am newly contracting 7 days a week through my corporation and am finding that I don't have the same abilities as I've had in the past to manage my life. I have one employee (me) and one client currently and work out of town.

What are the minimum types of services that I should be seeking at this time? What type of compensation structure is best?

My company requires me to provide a truck, home, food, phone, and computer. I have a mix of personal and company owned assets now. I'd like to be more efficient with managing assets, increasing investments, and paying down high interest loans.

The only thing I have done successfully is get an Accountant, which took 4 tries to get a good one (bad luck with very irresponsible professionals).

Open to public chat and to private messages. Thank you!

[MoneyGuy]

Slava is a member here and is highly recommended.

[Samonadreau]

Originally Posted by TSXCman

Hey guys,

I am newly contracting 7 days a week through my corporation and am finding that I don't have the same abilities as I've had in the past to manage my life. I have one employee (me) and one client currently and work out of town.

What are the minimum types of services that I should be seeking at this time? What type of compensation structure is best?

My company requires me to provide a truck, home, food, phone, and computer. I have a mix of personal and company owned assets now. I'd like to be more efficient with managing assets, increasing investments, and paying down high interest loans.

The only thing I have done successfully is get an Accountant, which took 4 tries to get a good one (bad luck with very irresponsible professionals).

Open to public chat and to private messages. Thank you!

I do something similar and do my own books, source deduction/tax payments and invoicing. I use an accountant for year end company and personal tax as well as issuing my T4.

Its a lot to keep up on. A good accountant is worth their weight in gold.

[Titan2]

Originally Posted by MoneyGuy

Slava is a member here and is highly recommended.

haha. nvm

[stazzy33]

Nevermind found the personal tax thread.

[TSXCman]

Thanks for the involvement so far.

I suppose I am looking for everything outside of the Accounting and taxes, as that's the only thing I have going.

Overall finance and investment advising, more than just the typical mutual fund package of low, medium, and high risk.

[Slava]

Originally Posted by TSXCman

Thanks for the involvement so far.

I suppose I am looking for everything outside of the Accounting and taxes, as that's the only thing I have going.

Overall finance and investment advising, more than just the typical mutual fund package of low, medium, and high risk.

Well to be clear, I’m licensed for all securities, but don’t use any mutual funds. I’m also a CFP if it’s more that angle.

[DoubleF]

Based on what you described, there's some major flags you must get answers for and must do things right to avoid unfavorable taxation to the potential tune of thousands if not tens of thousands of dollars. If your current accountant can't answer these questions, get a different one even if it was already a headache to get your current one. Don't skimp on this, it'll cost you many times more than the $1K ish it will cost to get a proper accountant or one at a big 4 firm.

1. Because you are a corporation contracting for a single client, you seem like you have a high chance to be considered a PSB. This limits your ability to deduct things including the accounting fee and has unfavorable tax implications to you. As a PSB, you basically can only deduct your wages and your benefits against the contracting fees you charge.

https://www.canada.ca/en/revenue-age...-business.html

Talk to an accountant and figure out how to do additional work and obtain additional clients to avoid being considered a PSB.

2. Compensation wise, rule of thumb is likely you want to do management fees and salaries (tax changes in last 5 ish years affected dividends). Dividends are likely going to have leakage causing you to pay more taxes and have less cash in pocket once it reaches you personally.

3. Keep a detailed mileage log or pay for an app that can do automatically track it for you. Otherwise, if detailed logs aren't maintained, you may not be able to deduct vehicle expenses. But as a PSB, you can't deduct these, nor office expenses, nor accounting programs etc.

4. Investments wise, due to changes in tax rules in the last 5 ish years. Rule of thumb is to keep them personal. Don't do a substantial amount in your corporation.


The PSB situation you have is ####ty. Make sure your accountant has the expertise and willingness to help you navigate the issue.

[Slava]

Originally Posted by DoubleF

Based on what you described, there's some major flags you must get answers for and must do things right to avoid unfavorable taxation to the potential tune of thousands if not tens of thousands of dollars. If your current accountant can't answer these questions, get a different one even if it was already a headache to get your current one. Don't skimp on this, it'll cost you many times more than the $1K ish it will cost to get a proper accountant or one at a big 4 firm.

1. Because you are a corporation contracting for a single client, you seem like you have a high chance to be considered a PSB. This limits your ability to deduct things including the accounting fee and has unfavorable tax implications to you. As a PSB, you basically can only deduct your wages and your benefits against the contracting fees you charge.

https://www.canada.ca/en/revenue-age...-business.html

Talk to an accountant and figure out how to do additional work and obtain additional clients to avoid being considered a PSB.

2. Compensation wise, rule of thumb is likely you want to do management fees and salaries (tax changes in last 5 ish years affected dividends). Dividends are likely going to have leakage causing you to pay more taxes and have less cash in pocket once it reaches you personally.

3. Keep a detailed mileage log or pay for an app that can do automatically track it for you. Otherwise, if detailed logs aren't maintained, you may not be able to deduct vehicle expenses. But as a PSB, you can't deduct these, nor office expenses, nor accounting programs etc.

4. Investments wise, due to changes in tax rules in the last 5 ish years. Rule of thumb is to keep them personal. Don't do a substantial amount in your corporation.


The PSB situation you have is ####ty. Make sure your accountant has the expertise and willingness to help you navigate the issue.

On point 4, there are some considerations though. Investing in the corporation can be done, but it just requires some thought to how you structure those holdings. I'd also note that some strategies for corporations make a lot of sense because they give you some advantages (IPP's for example) that you just can't get outside.

[DoubleF]

Originally Posted by Slava

On point 4, there are some considerations though. Investing in the corporation can be done, but it just requires some thought to how you structure those holdings. I'd also note that some strategies for corporations make a lot of sense because they give you some advantages (IPP's for example) that you just can't get outside.

Agreed, which is why I said rule of thumb. It's not that it's not allowed, but if you're carelessly investing in a corporation, it likely makes little sense to do that. In OP's situation, it's highly inadvisable to try to do that if considered a PSB.

Interesting concept for IPP... but curiosity speaking, what type of owner/manager corporation is doing IPPs? I think most corps are doing RDTOH refunds at the most when investing in a corporate vehicle.

[Slava]

Originally Posted by DoubleF

Agreed, which is why I said rule of thumb. It's not that it's not allowed, but if you're carelessly investing in a corporation, it likely makes little sense to do that. In OP's situation, it's highly inadvisable to try to do that if considered a PSB.

Interesting concept for IPP... but curiosity speaking, what type of owner/manager corporation is doing IPPs? I think most corps are doing RDTOH refunds at the most when investing in a corporate vehicle.

Well yeah, these things aren't appropriate for everyone/everything. But if you have a PC (for example) an IPP is a pretty useful strategy at times. I don't know if that's quite what you're getting at as an owner/manager corporation though?

[DoubleF]

Originally Posted by Slava

Well yeah, these things aren't appropriate for everyone/everything. But if you have a PC (for example) an IPP is a pretty useful strategy at times. I don't know if that's quite what you're getting at as an owner/manager corporation though?

I meant that in general for most small corporations. A corporation that is like OP's which is just himself is unlikely to use an IPP vehicle, no? You just withdraw and declare income over a period of time?

Sorry, by owner/manager corp, I meant sole shareholder corporations.

Pardon my ignorance on IPPs, but I thought you're more likely to use an IPP vehicle if you have multiple individuals in a corporation and those individuals continue on the business after said person retires? I would assume the gist is that if your business lives and dies with you as the sole shareholder, then you're less likely to pay a high fee to set up an IPP. You'd do a combination of RRSP and deferred salary and management fee based on tax brackets, right?

[Slava]

Well generally speaking, if you over 38 years of age (that's the age where you can put more into the IPP than your RRSPs), a higher income earner with T4 income from the corp, and if you're the business owner/incorporated professional is when it makes some sense.

You can wind the business down with you (like a PC), and it doesn't have to continue. You can also consider this like a super-charged RRSP, and you can contribute more to the IPP than an RRSP. But the other significant consideration is that the corp can contribute and deduct those contributions for you.

And cost-wise, it's not that bad at all. It does need to be implemented properly and by professionals (it is a registered pension plan with CRA), but the benefits outweigh the expense, assuming that this is in the right situation to begin with. What I mean to say is that just because you have a corp doesn't mean you should be setting up an IPP...there are some scenarios that make an enormous amount of sense and some are better off not doing it.