Can anybody here help summarize the pros and cons of self-employed as opposed to

[liherb]

Hi everyone,
Can anybody here help summarize the pros and cons of self-employed as opposed to working for a company? In terms of a long run. I thought this would be a valueable piece.

 

[starzibal]

Hi everyone,
Can anybody here help summarize the pros and cons of self-employed as opposed to working for a company? In terms of a long run. I thought this would be a valueable piece.

You can google it same question but here are few things:

1. It depends what kind of business you are starting if its only one-man show its different than hiring employees.
2. Good for tax purposes. Lots of things are tax deductible.
3. You don't get day off or vacation for first few year. You have to work your butt off just to establish the business.
4. Unlike waiting for paycheck every two weeks, you have to work yourself for that paycheck. so money can fluctuate, not fixed income but if your business is good then you make more money than you work for someone else.

So it depends what business you are going to start.

 

[liherb]

You can google it same question but here are few things:

1. It depends what kind of business you are starting if its only one-man show its different than hiring employees.
2. Good for tax purposes. Lots of things are tax deductible.

Thanks starzibal. I have two follow-up questions here:
1. Can I be both an employee for someone else and at the same time a self-employer, without losing all the tax-related benefits of self-employment?

2. What are the major tax purposes for self-employment? May you provide some examples?

Thank you very much!

 

[starzibal]

Thanks starzibal. I have two follow-up questions here:
1. Can I be both an employee for someone else and at the same time a self-employer, without losing all the tax-related benefits of self-employment?

2. What are the major tax purposes for self-employment? May you provide some examples?

Thank you very much!

1. Yes, you can be self-employed and employee(that is work for someone else) at the same time. There would be a difference in tax benefit if you formed a proprietorship and Limited company. If you are self-emp. you don't have to file your taxes separately self-emp and employee, you file them together but if you have Ltd. Co. then you file separately than yourself and the Co. So you won't lose any benefits but if you don't want to pay lot of taxes and making good money then you have to show expense here and there to justify the income so you wont taxed to death by CRA. Then there is GST/PST remittances, if you earn more than $30K a year.


Here are some tax benefits for self-employed person but not limited to:

No employment insurance premiums (but if you have Ltd. Co then you can show yourself as CEO/employee and you have to pay EI prem.)


More expenses are tax-deductible - for example, expense of traveling to and from clients' places of business is tax-deductible, you can claim utilities/room/rent etc if you are using your home/basement for business portion or complete home/basement for business.

More freedom to choose own working hours

Can work for more than one client

In first year of operation, income tax not payable until April 30th following first year end.
Opportunity for increased profits.