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Starting a Business

  1. Apr 19, 2006 #1

    JasonRox

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    Alright guys, I'm thinking about starting a small business.

    Nothing big though.

    It's kind of like that College Pro Painting thing, but with something more practical.

    I'm just looking into installing floors like Ceramic Tiles. I'll paint too, but it won't be my main focus.

    I just have a small question regarding employment. I'm going to hire someone. To escape from paying any annoying things like Income Tax, Employment Insurance, Canadian Pension Plan, etc... on his cheques, I'm just going to pay him as a Independent Contractor.

    Would that be alright?

    I'm aware of some of the legal implications that I must take to assure that he is a Independent Contractor in case anything happens.
     
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  3. Apr 19, 2006 #2
    Jason good luck with your new venture. I would talk to a CPA or small business lawyer. In the meantime here is some good reading material for you.

    http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

    http://www.wwwebtax.com/general/independent_contractor.htm

    http://www.nolo.com/article.cfm/objectID/4E3C9751-CE3F-40E2-869381320F438820/111/259/173/FAQ/


     
    Last edited: Apr 19, 2006
  4. Apr 19, 2006 #3

    JasonRox

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  5. Apr 19, 2006 #4

    Pengwuino

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    All i know is that paying someone as an independant contractor is a +++ for a business as opposed to a salaried employee.
     
  6. Apr 19, 2006 #5

    JasonRox

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    +++ good?

    ... or is +++ a censored word?

    There are restrictions to an independent contractor though. I have very minimal control over what they are doing.
     
  7. Apr 19, 2006 #6

    Pengwuino

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    +++ good good good. It's a great deal on both sides when the employee isn't necessarily looking for a career or likes the freedom of being semi self-employed.
     
  8. Apr 19, 2006 #7

    JasonRox

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    That's basically it.

    But then, I can't order around too much. That sucks if they dick around.
     
  9. Apr 19, 2006 #8

    Pengwuino

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    Oh yah that's a big problem with a small business. Your dream rides on other people's shoulders as well as your own.
     
  10. Apr 19, 2006 #9
    Sell drugs.
     
  11. Sep 7, 2006 #10
    just a heads up

    don't work for college pro, they are a scam, or anyone like them for that matter.

    instead, if u want to learn a trade, become a grunt and pick the manager's brain. then do it solo next year. or buddy up with someone and start a joint venture.

    just don't buy a "franchise" u'll get screwed.

    anywya, thats my soapbox, good luck
     
  12. Sep 7, 2006 #11

    JasonRox

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    I never intended to get a franchise. I never said I would in the thread opener.

    Anyways, I decided not to do it because it would take up time and I felt that I wouldn't do the best job ever. Sure, it would look good, but it might not be the best. If you've seen Holmes on Homes, you'll know what I mean. I don't want to rip people off intentionally or unintentionally because I have professional background.
     
  13. Sep 7, 2006 #12

    Evo

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    In your circumstances, it's not a big deal, but I cannot condone evading taxes. Issues that go with being a contractor instead of being an employee is that (at least here in the US) you are responsible for your own medical insurance, medicare and social security, income taxes, retirement benefits, etc... all which decrease your net income significantly.

    In the US you can make a certain amount of income without being obligated to pay taxes, it is a small amount though, something like $3k annually.
     
  14. Sep 8, 2006 #13

    JasonRox

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    I didn't intend to evade taxes.
     
  15. Sep 8, 2006 #14
    Good, because you liability decreases, however I would look into getting some sort of Liability insurance
     
  16. Sep 8, 2006 #15
    Dont evade, but it is certainly in your advantage to understand the tax laws in side and out.
     
  17. Sep 8, 2006 #16

    russ_watters

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    Just be aware that unless your contract employees are stupid, they'll need to be paid considerably more than what a regular employee would, because of what Evo said about the added expenses for them. I'm a contract employee and though my boss does give paid vacation and sick days and I work from home enough to claim part of my house, that doesn't make up for the other half of my SS tax I have to pay and my health insurance.
     
  18. Sep 8, 2006 #17
    However:

    As a company if you use contractors, you dont need to pay corporate employment tax for the contractors. It is deemed a service, and thus is tax deductible (AFAIK). So in the end you are paying the same amount. I am also a consultant.
     
  19. Sep 8, 2006 #18

    JasonRox

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    I don't intend on starting this business now. I mentionned it in my previous posts.

    I took a Tax Class (Corporate and Individual), Accounting and Business Law and I am aware of my duties.

    I asked in my original thread to just get opinions and see if I'm missing something or not.
     
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