dual US/CAN citizen looking to incorporate in Canada

[lanman2000]

Hi there,

I am a dual US/Canadian citizen currently residing in Canada. I am an IT consultant and am looking to incorporate in Canada for tax purposes and also so I can write off mileage to my contract work, etc... My questions are:

1) Is it advantageous to incorporate in Canada or will the "retained earnings" rules from the US nullify any benefit that incorporation will give me?
2) If i incorporate in Canada can I write off my mileage to where my contract work is? Is there a limit?
3) If i incorporate in Canada can I write off 407 ETR tolls that I pay on the way to and from my contract work?

Do you have any other advice/tips on how to lower my tax liability? Perhaps I should just work as a sole p?

Please advise. Any help is MUCH appreciated!

[nelsona]

there is no need to incorporate to get the write-offs you mention.

Incorpoartion would be more for a personal liability benfit.

[lanman2000]

so even if i just simply do hourly paid contract work I could write off mileage and ETR tolls? Is that just sole proprietor status here in canada?

Other than personal liability are there any other downsides to not incorporating and operating as a sole p , perhaps tax-wise or whatever?

[nelsona]

That is considered self-employed. The only thing you have to watch as self-employed is if your work conditions truly meet the definition -- and this usually comes down to how much 'control' you have over your activities.

[lanman2000]

ok thanks. Is there a document or link somewhere to read up on that "control" definition? Is that a CRA thing? Are the rules different b/w CRA and IRS?

[nelsona]

Probably. happy searching

[lanman2000]

:)