i a Wie

‘Seat

SERS DESO STEEN NEAL Ret TT TL a7 MAT RES NE TAG

BE YOUR
OWN BOSS
SUCCESSFULLY!

Learn the basics to start
your own business.
Day and evening seminars
from $100
Call BUILDING BLOCKS
To BuILDING SUCCESS

TM AN
INDEPENDENT
WANNA SEE

-- BUSINESS
CARD —
WHERE D SHE

TAX TREATS
FOR THE SELF-

EVvIGIBLE IF You
BELONG 10 A
COCOMPANY /

dollars

and sense

THE EMPLOYER likes it.
The former employee likes
it. But Revenue Canada
takes a very close look at it.

“I being an individual work-
ing as un independent coniractor
for a company.

The company doesn’t have to
pay for benefits. And the contrac-
tor gets to claim a wide variety of
tax breaks (like deducting most
business expenses and shifting
income to family members in a
lower tax bracket).

“This may end up a win-win
situation but often Revenue
Canada is the big loser,” says tax
lawyer Arthur Drache, editor of
The Canadian Taxpayer newsiet-
ter.

Added the Money Reporter
newsletter: “The effectiveness of
this type of tax planning recently
led Revenue Canada to take a
much closer look at individuals in
business for themselves.”

You get few tax breaks when
you are an employee, or after you
retire.

So it’s tempting to set yourself
up as a self-employed individual.

(You don’t have to incorporate a

company, although that could pro-
vide additional tax breaks in some
situations.)

But be careful if you simply
resign one day as an employee of a
company and go back the next day
as a self-employed individual.

In a presentation sponsored by
the National Advertising
Benevolent Society, lawyer
Geoffrey Howard, of Connell
Lightbody, said Revenue Canada is
more likely to consider you self-
employed if you (rather than the
company):

* Control how the work is done.

* Own your work “tools.”

* Chance the profit or risk the loss.
« Stay out of the company’s opera-
tions (for example, you don't
belong to any benefit plans).

Howard adds you should avoid
restrictions and be able to have
more than one client or customer
(even if you do have only one).
buse your bili on results. not just
time, and “act like you are running
a business — have an office and
business cards, brochures, sta-
tionery; submit invoices; perhaps
collect GST and PST: have a con-
sulting agreement.”

Always weigh the employee
benctits and security you give up
against he tax and personal advan-

tages of being self-employed. Ask
your focal tax office for the
Business and Professional Income
guide — it has the most comuion
deductions and other useful infor-
mation for the self-employed.

Be sure vou have a viable plan.
One man operated a typing busi-
ness and paid his wife to run it.
(That can shift income from a high
to a Jow tax bracket.) Revenue
Canada wouldn't fet him claim a
loss from the business against his
other income. The tax court agreed
the “salary expenses were some-

what out of line, his deductions for
rental expenses were grossly exag-
gerated™ and nothing indicated
“his venture had a reasonable
expectation of profit.” reported
CCH Canadian’s Tax Topics
newsletter.

Mike Grenby ix a North Shore-
based coltennist and independent
Jinancial adviser who works with
individuals: he will answer your
questions in this colunn as space
allows ~ write ta him clo 2444
Haywoad Avenue, West Vancouver,
B.CV7V IY.

At VanCity, you can do both. With
VanCity term deposits, you get rates

that are consistently among the highest

in the raarket. In fact, earn 1/4% more than the

posted rates of most major competitors* on 1 to 5

year non-redeemable annual interest term deposits.

Or, to help build more than your savings,

VanCity Community Investment Deposits give you an

RRSP-eligible, guaranteed investment that supports

986-7302

MEONGIGNMENT

ring in your old
comouter for
consignment -
No appointment
necessary.

Shop early
for best
selection!

L. -
P.C. GALORE CO

VANCOUVER'S FINEST COMPUTER CONSIGNMENT STORE
719 Lonsdate Ave. 27484 W. 4th Ave.

990-0547 732-7816

Mon. te Thurs. 10-6 ; Fri. 10 - $; Sat. 10 - 5:30

affordable housing and environmental projects in
Lower Mainland and Fraser Valley communities.

Either way, your investments are backed by the
financial strength of Canada’s largest credit union.
To find out more about these and other term

EIN

WIP RE VANCITY
0 0 0

deposit options, call
Tele-Service today at
877-7000 or visit your

neighbourhood branch. 8 7 7 + 7

“The big five banks, Canada Trust and the Hongkong Bank of Canada. Excludes promotional offers.
Deposits are insured by The Credit Union Deposit Insurance Corporation of British Columbia, up to a maximum
of $100,000 per “separate deposit” {as defined by regulation) per credit union