Quote:
Originally Posted by Chaser8
I'm interested that question too. Can you use corporate money to buy anything you want? If so, then incorporating wouldn't be such a bad idea because all you gotta do is pay 16% tax, pay yourself 24k tax free for spending money, and for all major purchases just use your corporate money.
No. Well, I suppose you could, but you certainly can't claim it as a business expense. And when CRA starts looking into things they are going to be pretty sweeping in their determination that all of these purchases equate to income to you personally.
As for why you would want to incorporate, there are a couple of immediate reasons. First, if you're looking to build your bankroll, that money stays within the corporation, and any accumulation is taxed at the corporate rate. Second, anyone with a family or looking to have one has the option to develop family trusts (I'm pretty sure this is available -- they were never my specialty). A family trust allows the corporation to pay profits to a spouse or children, to spread out the income, maximizing both the basic personal amounts and the amount that's taxed at the lowest personal tax bracket. Third, you don't need to pay yourself all of your winnings as personal income. You can pay a reasonable salary according to your needs, then invest the excess through the corporation. This will allow you the best possible control over when you receive personal income, to maximize any tax benefits.
I was never a corporate expert, and my lazy ass hasn't even gotten around to incorporation yet, so I welcome any corrections or expansion.
Edit: I remembered one more thing. Having your business incorporated establishes a fairly clear line between personal income and assets, and business income and assets. Anyone who is married or separated and thinks divorce is even a possibility should know that all personal assets are divided equally between spouses, but business assets are generally excepted from division. While technically any assets, such as your bankroll, should be viewed as business assets even if you are an unincorporated sole proprietorship, convincing a judge that the 100K in your personal bank account is just for playing poker may be difficult.