livenudecats 4072 Report post Posted February 22, 2011 I've been thinking about something for a while now and was wondering if any of you have ever tried this? I've always thought "Wouldn't it be nice if I could somehow 'write off' some of my pooning as a business expense." Have any of you ever approached a reliable, honest regular about setting up an arrangement where you pay her out of your business and claim it is for bookeeping, cleaning, administrative work, etc? Yes she would have to claim the income but I would compensate her above her normal rate for what ever tax liability would go along with this. I wouldn't put her on the payroll but rather pay her as a subcontractor. She wouldn't have to pay or collect GST as it would be less than $30,000.00 annually. I know there would be several pitfalls involved in such a scheme and that's why it wouldn't work in 99.99% of situations but this is a very rare case of a regular of mine who I have gotten to know well and I would trust her that it would work in this instance. Anyone ever done this? Quote Share this post Link to post Share on other sites
Megan'sTouch 23875 Report post Posted February 22, 2011 Yes, I've looked into this but never actually taken the plunge. Quote Share this post Link to post Share on other sites
Carrie Moon 68826 Report post Posted February 22, 2011 I haven't personally done it.. but I know others who have.. Quote Share this post Link to post Share on other sites
Guest W***ledi*Time Report post Posted February 22, 2011 "You shouldn't have to provide her with additional compensation for her tax liability, since she should already be paying taxes", he said innocently. I would think you would likely have to give her a little something extra to compensate her for putting herself in the position of participating in tax fraud, though. For yourself, you of course know the risks in the (relatively unlikely) scenario of getting caught. Worst case would be a fine of 200% of taxes evaded, plus 2 years in prison. (I have a friend who has been reporting false expenses for many years to Revenue Canada. For one thing, everytime we go out on the town, he puts the whole bill on his credit card and I compensate him for my half in cash. Then he uses his receipts to claim business expenses, even though he only paid half and it had nothing to do with business in the first place. He's a good friend, but I loathe this practice. I've told him if he's ever audited, I'm not lying for him - friend or not. He's been warned.) Quote Share this post Link to post Share on other sites
livenudecats 4072 Report post Posted February 22, 2011 For yourself, you of course know the risks in the (relatively unlikely) scenario of getting caught. As long as one isn't stupid or greedy it's unlikely to get caught. My annual expenses run just over $500K and employee wages/benefits/contracting fees are about $160K so I figure another $3-4 K or so wouldn't get noticed. Quote Share this post Link to post Share on other sites
moonshadow 369 Report post Posted February 22, 2011 Another 3 to 4 K of "bookeeping" expenses would not get noticed at all on 500K. Its not a bad idea actually. Instead of hiring the woman as a contractor, can you just write it off as an entertainemt expense? Now that would be nice. Posted via Mobile Device Quote Share this post Link to post Share on other sites
emb3750 9398 Report post Posted February 22, 2011 Make payment with gift cards...then write-off as advertising expense, promotional, bonus...whatever. Quote Share this post Link to post Share on other sites
April Dawn 12207 Report post Posted February 22, 2011 That reminds me of a movie I saw.. I don't know how I'd feel if somebody gave me a gift certificate to home depot :P Quote Share this post Link to post Share on other sites
emb3750 9398 Report post Posted February 22, 2011 True enough....but all the ladies love Bed Bath and Beyond. And let's not forget their favorite restaurants. I agree, this requires some pre-planning to be well received Quote Share this post Link to post Share on other sites
Meg O'Ryan 266444 Report post Posted February 22, 2011 I don't know how I'd feel if somebody gave me a gift certificate to home depot :P funny you should say that...i actually did receive that as a gift....purchased some beautiful plants :) Quote Share this post Link to post Share on other sites
roamingguy 300292 Report post Posted February 22, 2011 Seeing as I'm not a businessman, but a poor public servant:roll: my disposable income is used for hobbying, and I would feel awful depriving the taxman of his rightfully taken money:icon_rolleyes: Seriously, this for me is a hobby, not a means to get around paying taxes As for the lady, well the ones I have seen can attest, not only do I pay, but they get a tip and gift as well I think your running a risk trying to claim hobbying as a tax break, and it's something I wouldn't do, but that's me RG Quote Share this post Link to post Share on other sites
Kubrickfan 12836 Report post Posted February 22, 2011 All things considered, I'd suggest the deduction line item be listed as something other than "pooning." (smile) Quote Share this post Link to post Share on other sites
Old Dog 179138 Report post Posted February 23, 2011 Make payment with gift cards...then write-off as advertising expense, promotional, bonus...whatever. Hmmmmm... I have Canadian tire money.... and a handful of A&W two for one teenburger coupons. Who can honestly say that they could turn down a two for one teenburger deal??? Quote Share this post Link to post Share on other sites
April Dawn 12207 Report post Posted February 23, 2011 Hmmmmm... I have Canadian tire money.... and a handful of A&W two for one teenburger coupons. Who can honestly say that they could turn down a two for one teenburger deal??? LMAO!!!!! I also died choking on my coffee. Thank you for the mental image of a wad of canadian tire money and puppy dog eyes. Posted via Mobile Device Quote Share this post Link to post Share on other sites
qwertyaccount 15793 Report post Posted February 23, 2011 that's good advice, if you're going to get into tax fraud you gotta keep your mouth shut and not discuss it on a public forum board. That's just asking for trouble. I like the stress relief contractor idea. Gotta make sure she's paying her own WSIB premiums and your good to go. If we consider it to be "Stress management training" then it's fully deductable and isn't considered a taxable employment benefit. See CRA document IT-470R for the details: http://www.cra-arc.gc.ca/E/pub/tp/it470r-consolid/it470r-consolid-e.html Quote Share this post Link to post Share on other sites
jafo105 39057 Report post Posted February 23, 2011 Why not just hire the SP to be your personal assistant, or better yet, your girl Friday. Just a thought.... Oops, I clicked on the wrong smiley... sorry... Quote Share this post Link to post Share on other sites
Carrie Moon 68826 Report post Posted February 23, 2011 Why not just hire the SP to be your personal assistant, or better yet, your girl Friday. or.. Girl Wednesday (a.k.a. hump day!) Quote Share this post Link to post Share on other sites
renegade 11027 Report post Posted February 23, 2011 everythings peachy till the audit - when even 100% legit expenses are up for grab,s -it can be an expensive lesson believe me !!! Quote Share this post Link to post Share on other sites
jafo105 39057 Report post Posted February 23, 2011 I had another thought. For the SP's job description, where it says duties just put "Other duties as required". That way nothing is spelled out and no one is the wiser. This is done all the time with other trades. The SP could be a part-time employee and/or on-call. :icon_wink: Why not just hire the SP to be your personal assistant, or better yet, your Girl Friday. Just a thought.... or.. Girl Wednesday (a.k.a. hump day!) Quote Share this post Link to post Share on other sites
jughead 45 Report post Posted February 23, 2011 I wish I could convince the company that hobbying is a medical expense...........heck... if I could even convince that it was a prescription......... Quote Share this post Link to post Share on other sites
livenudecats 4072 Report post Posted February 24, 2011 Hey Jughead, You better hide that picture of you and Betty. If Big Ethel sees it, you're toast. ;) Quote Share this post Link to post Share on other sites
