A less taxing

BUSINESS

BEING YOUR own boss can pay off in both personal and
financial satisfaction — in particular, allowing you to live

a less taxing life. Revenue
you are self-employed.

Salespeople in particulzr can
benefit if they qualify as self-
employed.

(Whenever you consider tax ad-
vice, review your own situation —
and perhaps consult with an ex-
pert — before taking any tax
planning steps.)

“Whether you are considered
an employee or self-employed dc-
pends on each case, there are no
absolute rules,’* said Elio Luongo,
senior tax manager with Peat
Marwick Thorne, chartered ac-
countants. Here are some
guidelines, which apply to all in-
dividuals:

If you work a sei number of
hours each day, account for your
time to the company, are toid on
a regular basis what to do and
how to do your work, belong to
company benefit plans and have
an office or .workspace at the
company, you are probably an
employce.

But if you set your own hours,
werk on your own without super-
vision, issue invoices to the com-
pany and receive cheques, have no
membership in company benefit
plans and work at home or in an
office avay from the company, it
is quite likely Revenue Canada
would consider you self-
employed.

“For example,” said Luongo,
“Revenue Canada , allows real
estate brokers and salespeople to
be -considered self-employed in
two main situations:

“One. Under your contract are
entitled to. the full amount of your
gross commissions and pay a ‘re-
alistic’? fixed amount to your
broker on a monthly, annual or
other basis for administrative and
operating costs.

“Two. Under your contract you
. are entitled to the full amount of
your commissions and pay your
broker only a percentage to cover
administrative and operating costs
-— but you set your own commis-
sion. rate for: the sale of your
listings. ”

If yow’re not sure whether you
are an employee or self-employed,

talk to your financial adviser and |

ask your local tax office for a
form so you can get a ruling from
Revenue Canada. You save tax if

‘

Canada gives more leeway if

Michael

DOLLARS AND SENSE

you are self-employed, but if you
file as self-employed and !ater are
assessed as an employee, you
could face a large tax bill.

Here, from Luongo, are some
of the advantages of being self-
employed:
® Year-End. You can choose
your year-end, which determines
when you must declare and pay
tax on your self-employed in-
come,

For example, if you started in
business this year and choose Jan.
31, 1992, as your year-end, you
will report all the income earned
unti} Jan. 31, 1992, on your 1992
tax return. That means you pay
no tax on your 1991 income until
April 1993.

Deferring tax usually makes
sense. Jus: be sure you have
money set aside to pay that defer-
red tax bill when you quit work or
otherwise have a low/no-income
year. Also, choose your year-end
carefully as you will need Revenue
Canada’s pertaission to make any
subsequent change.

e@ No UIC But Mere CPP. As a
self-employed individual, you da
not have to pay UIC premiums.
But you will have to pay both the
employer’s and cmployee’s por-
tions of the CPP premiums.

® Deductible Expenses. You may
claim virtually ali the expenses
that an employed commissioned
salesperson may claim (see list in
last week’s column) — plus sever-

al others.

For example, if you buy your
cellutar phone, computer cr other
office equipment for business use,
you may claim the interest if you
borrowed and capital cost allow-
ance (depreciation), breaks which
employed salesneople miss.

If you own your home and are
claiming home office expenses,
you may claim a proportionate
share of the mortgage interest -—
again, 2 claim denied to employed
salespeople. You may also claim
depreciation, but most people skip
this as it imperils part of the prin-
cipal residence capital gains ex-
emption.

@ The GST. If you are self-
employed and cam more than
$30,000 a year in gross commis-
sions, you must register for the

You must charge the company
GST on your commission, and
keep track of the GST you pay on
business expenses because you
may then claim an input tax credit
— which means you get back the
GST you pay.

As long as your gross commis-
sions are less than $500,000, you
may file your GST returns annual-
ly although you must still pay
quarterly GST instalments.

Mike Grenby is a North
Shore-based columnist and in-
dependent financial adviser who
works with individuals; he will
answer your questions as space
allows — write to him c/o The
North Shore News, 1139 Lonsdale
Ave., North Vancouver V7M
2H4,

Wednesday, December 11, 1891 —- North Shore News - 43

ATRIMONIA

HUGH KIRSTIE

STARK MACLISE

"Over Thirty Years Combined Experience”
Authors of DOMESTIC CONTRACTS
A Book on Marriage and Separation Agreements.

BCUSTODY S@MAINTENANCE PROPERTY DIVISION
Iht- 808 NELSON STREET, VANCOUVER, B.C. (NELSON SQUARE HTHONE: 682-4909

Reduce Your Estuie Taxes

The greatest impediment to
passing property from one
generation to the next is tax.

Find out how to:

* Preserve your estate

® Reduce the ultimate tax
liability

688-7208

“Advice is only as good as the person you ask...”

ZLOTNIK, LAMB & COMPANY

Estate Planning and Retirement Specialists

1200 Park Place, 666 Burrard Street
Vancouver, B.C. V6C 2X8

(604)688-7208 Toll Free Line 1-800-663-3171

Paul Milley
B.Sc. C.L.U.,, CHC.

@ HITACHI

FREE

CAMCORDER
CLASS

Details in Store|

VM-E22 8mm CAMCORDER N77 |

GIVE YouR SAVINGS
STRENGTH
IN NUMBERS.

Latest 1, 3,5 & 10
year performance
to Sept. 30, 1991

were 31.9%, 7.9%,
9.2% and 16.7%

respectively.

This model does the thinking for you!

Just switch over to the Full Auto Mode ,

and it will automatically adjust the

focus, iris and shutter speed.

Features include:

® Digital zoom (50x)

® Wireless Remote Contro! .

* Amorphous Video Heads ¢ Accu-Shot
AX (Auto Exposure) ¢ Character Generator

* Date and Time _ :
Recording

Since incepiion
on Sept. 1, 1981,
Trimark Fund
investors

eared 16.2% including case

TRIMARK FUND
Invest Your Savings
Where They'll Really Grow.

AAT
MUTUAL FUNDS

Note: All eetuins ave average annual compound tates of retain and reflect distributions remvested dnd exclude
sales charges uf any kind, Past performance is not a-cessanty indicative of future results. Any offer made by
Pptonpectus only, Al figures audited by Erast & Young, Chartered Accountants.

PLATINUM DEACE CF MIND

VM E23 8mm
EXTENDED WARRANTY

CARACORDER
* Compact &
Lightweight
© Digital Zoom =X
(64X)
® Full Auto Switch ~ .
© Al. IrisAVhite Balance
« Amorphous Video tleads
© Flying Erase Head
* Wireless Remote Control

CALL US TODAY:
STEVE PHILLIPS JOE LAPPAN, CFP
844-5723 ¢ (Res.) 985-1270 844-5724 » (Res.) 980-4099

mamapimrs ar erainem mir-sesegimanerssmmmreemear domrmanstrghsnrcniunereoeeo
lowestment advisors to Canadiin enterprise and enterprising Canadians
500-1066 West Hastings Sireet, Vancouver, B.C. V6C 3E8

en Sf 999%. 2 Hiying Erase Heed ii
AMBLESIDE TV.
& STEREO

TWIST & SHCOT sd size é CAMCORDER

‘With 64X ELECTRO og

* Audio/Video Fade Control yi 199% including

© Bulge Lead Head ay
! La.
anes ie * SERVICE

RENTALS
1487 Marine Drive, West Vancouver
926-1400

1820 Lonsdale Avenue, North Vancouver

987-8811 985-9831