IT Contractors and Consultants Taxes Personal Business Rules Watch Video
Allan Madan, CPA, CA
Are you an IT contractor or a consultant working on a contract basis? Read More…
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CPA, CA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
If you are classified a Personal Services Business by the CRA, but your business operations change in the future enough that you would no longer be considered an incorporated employee, how would you go about having the PSB designation removed?
Hi Danielle,
That would be a tough battle with the CRA as the CRA will most certainly ask for proofs of your corporation’s change in status. So be prepared to provide documentations.
Another alternative would be to dissolve the current corporation and start a new corporation. Please make sure to consult a qualified accountant before looking into such options.
– Allan and his team
What happens if your business is 99% IT consulting and 1% something else?
Hi Sam,
The number of clients is only one factor that the CRA asses in determining whether your business is a Personal Services Business (PSB). However, as the number of clients you have increases, the likelihood of your business being classified as a PSB decreases.
Thanks,
Allan Madan, CPA, CA
Tel: 905-268-0150
Hello,
I am a trucker and have a PSB. I pay all profits from my corp as a salary. However, am I able to issue myself a TL2 or T2200 in order to claim some employment expenses on my T1? Haven’t been able to find a clear answer on this
thank you
HI Frank,
Yes, you can issue yourself a T2200. You must sign as the employer. Employment expenses are deductible from employment income.