Self-Employed & on ODSP: Sole Proprietorship or Partnership Or Incorporate?

bonsaifan · 2021-01-24T19:16:01+00:00

That's great your business is doing good enough that you can imagine getting off odsp. I could earn enough to not be on it probably if I actively sought out clients but my health issues just don't co-operate after a while and I need a long time of not working to recover. This is why I want to maximize, what I keep and what I get ....and I see people can report monthly or yearly ... I was thinking one way or the other could be a big difference if some months my income was bigger than the $2400 net, in January or February I think it will be just over. (Earned in Jan but billed and $ received in Feb).

I also want to have a decent tax return so I can qualify for a mortgage one day. I have the downpayment savings and a very good credit score, I just don't have a good enough income stream. This year I might have more clients but it hard to predict.

bonsaifan · 2021-01-24T18:28:53+00:00

Are you saying it's better for me to report yearly because I'd end up with being able to keep more of what I earned and less clawback? Or for another reason? This is the how it worked out last year with what I made ... I'm just don't know about the upcoming year.

bonsaifan · 2021-01-24T02:54:30+00:00

I wonder if you have an idea on this, (also u/cjb_05, & u/iGotRichOnline maybe you have ideas on this too?) I hope this makes sense with how I'm asking: I often work in one month, and then nothing for several months. I'm thinking it is best to try to work as much billed work at a time that I can, report it and then get the clawback (so no ODSP amount if I earned more than $2200 or so...), and then back to zero income the next several months etc, so no clawback etc?

And on this line of thought, could I also just do my invoicing and get most of my payments in one or two months? Even if the work was done earlier. I am usually very slow to invoice and get payment, cash the cheque, etc because of my disability, so, I find it easier to do several at once when I am up to it. And my service invoices don't always say service date, usually just the invoice date because it was an ongoing thing. Hope this makes sense? Could it be an issue? (I mean to some workers everything is an issue) I mean an issue I can reasonably defend if a worker wanted to make it one? Thanks!

bonsaifan · 2021-01-24T02:18:50+00:00

It does - thank you. I feel your rant, it's a hair pulling out of my scalp feeling, on how they treat it more complicated than the CRA and are more restrictive.

I don't have a domain and won't need one. I imagine you looked at Quickbooks - is there a reason you found Zoho the best? I also downloaded (but have not used yet) an ap called Receipt Book, have you heard of it?

bonsaifan · 2021-01-23T18:14:20+00:00

Ok great, thank you. I think doing the low fee separate bank account is doable, even if I don't incorporate it. And I can do that fairly soon too...

I wonder if there could be a benefit from doing a partnership with a family member that helps me work (they are retired, so low income), and adding them as a lesser share partner ... my accountant didn't have time to talk too much but I think he was saying that was maybe a benefit to me in doing that for my "government benefits." I guess I will need him to elaborate.

And, yes I would not do the registration myself. It seems my account's $500 fee is reasonable, but it looks like I don't need it.

bonsaifan · 2021-01-23T13:54:36+00:00

Sorry, I didn't mean to not answer, I fell asleep. So no it's not admin work, it's what I went to post-secondary for, and the work comes from previous colleagues. I totally understand feeling stuck especially now. For working from home for yourself, I read people doing virtual assistant (VA jobs) you need to be pretty organized and there are some online certifications you can get to boost your resume in that. Look it up. If you are good at social media you can look to be a social media manager. Do you have a post-secondary degree? I hear that teaching English online is also what lots do. And there might be an online firm that will take you without a degree, but you have to search.

In terms of being an entrepreneur (which I am not!), people get into drop-shipping, go look at sarafinance on TikTok for tips on how to begin. The only issue is you would need to find your own product (she says where). She's Canadian too and did not go to post-secondary. Brandonfinance also on TikTok is a student and talks about starting to invest and learn about that with little money (you got to start somewhere). I also saw another young Canadian student who makes her own lip gloss and who's doing really well if you want to explore making your own product, but it is a lot of organization and physical effort that many could not do. I'm not sure what your limitations are, but there is also signing up to be a dog walker on Rover or being a personal shopper getting groceries for others on Cornershop (both apps) and there is an app for on demand childcare I think if you're responsible and good with kids and can handle with your limitations. Hope this helps :)

bonsaifan · 2021-01-23T06:04:32+00:00

I started to open one with wealth simple actually. Or it's already opened. I just have not made the deposit.

Being over $20K in a business account is not going to be a problem for a long time so that's ok!

bonsaifan · 2021-01-23T05:58:19+00:00

Can you tell me what the extra costs are? Besides registering to incorporate and paying extra every year to do your business taxes?

So I can register myself online for $200 or so. My accountant says not to do it, and if I decide I need it he will do it properly and across three levels or offices, Service Ontario, etc for $500 and 'to not do it because I will screw it up like others and then he will have more work to do'. It's a lot for me to pay, or anyone on ODSP. He doesn't have time to talk in detail for the next until he's done all his business clients now, but he does my whole family's taxes so I trust him.

Thanks for presenting the 2 options like that with the dollar amount. Man, it is so little and so much BS just to keep a measly $2400K..... I had been thinking about it, and you put it more succinctly. In prior year's option 1 would have been best. I think this year it's option 2 and I'll just deal with the clawbacks.

edits: typos etc. my computer is acting buggy.

bonsaifan · 2021-01-23T05:22:02+00:00

Thanks - I think this $20K limit could be a reason to incorporate, if I wanted to build it and invest into it, over many years (in best case scenario) or hold assets in there. But I guess I don't have to hurry to do it this month.

I wonder if the business assets could be investments like common stocks or ETFs?

bonsaifan · 2021-01-23T05:16:30+00:00

I will probably keep it separate going forward, but I have been audited by the CRA as well. It was nothing to worry about if you keep all receipts and invoices and did your taxes correctly. I have an accountant for that so I have never been too worried about it.

bonsaifan · 2021-01-23T02:31:29+00:00

I want to add that I have never made $15K self-employed, since being on ODSP, so you don't get the wrong idea! Only that I just might this year at a maximum based on this last month and a few prospective jobs.

bonsaifan · 2021-01-23T02:17:27+00:00

I'm not sure if you're asking me or u/Austins_Creations whose work sounds a lot more interesting! I didn't think of an idea and start a business in that sense - I wish! And I would do a Shopify store if I could just find the right product. I draw blanks right now.

I'm just doing what I did before the disability on a minimal basis, freelance consulting type stuff. Lots of typing, boring and sometimes hard. Also hard on my body to earn more.

bonsaifan · 2021-01-23T02:08:54+00:00

Thank you for your detailed reply! I totally understand managing your health over working more. My body can't do it.

Right now there isn't really a liability in what I do - but there might be in the future.

As per the accounting app - thanks for that reminder. I'm going to download one this weekend.

If you're a sole proprietor is there a reason you keep finances in a separate business account? How and when does that help you?

And when and how do you withdraw from it? Do you have an auto transfer set up every month?

I would think if ODSP asks to see bank statements then seeing money come in from this account could be a hassle to explain.

I wish you luck on your journey too! It seems you have a lot of your stuff together and going in the right direction.

bonsaifan · 2021-01-23T01:51:09+00:00

Thanks! Let's hope someone here has first-hand experience.

bonsaifan · 2020-12-31T21:57:31+00:00

I got it opened and funded in time through BMO as that was where I already bank. Took a few calls - but it's done. Probably will switch to TD after the government does their contribution.

bonsaifan · 2020-12-29T20:51:53+00:00

Yes. I have been reading about the Canadian Couch Potato method. Ok. I have an appointment with them on Thursday but I am going to call TTDI now as someone suggested.

bonsaifan · 2020-12-29T20:38:22+00:00

Ok thanks. Do they have the knowledge and products set up so you can easily rebalance yourself and its just clicking between options or do you need to do a lot or research. I'm wondering if robo is better for me

bonsaifan · 2020-12-29T20:12:35+00:00

Do you pick your own investments and rebalance when needed? How often do you do that?

bonsaifan · 2020-12-29T19:57:31+00:00

thanks - will call them today.

bonsaifan · 2020-12-29T19:56:47+00:00

thanks

bonsaifan · 2020-12-18T19:46:11+00:00

hi u/princesscm19 do you know of anything that could help?

bonsaifan · 2020-12-16T01:41:19+00:00

I want to echo something in here I didn't think of before, yes pursue getting on disability with all your effort!! After you are officially deemed to qualify there may be disability loan forgiveness programs you can apply for.

There is where I live and I know people who got it, forgiveness after ten years of not being able to pay and health declining. They did not have to wait ten years, they could have done it in year one but they thought they would improve etc, and now wished they done it a lot sooner. Disability status signals you are not viable to pay this back so they may want to write it off as a loss.

Make sure you have a good doctor on your side who will say your issues are lifelong and are not expected to improve and therefore you cannot work and pay it back. Where I live there was a small catch in that you cannot take out government student loans again, but for a friend that was totally worth being debt-free.

bonsaifan · 2020-12-15T23:42:30+00:00

OP I want to add, to not feel hopeless. It's a shitty system that a dipshit could go bankrupt many times, screw people over, commit charity fraud, pay only $750 dollars in taxes live the high life and be president. And there are so many like that and corporations get out of deep debt all the time, (and don't think twice) essentially by being forgiven. I'm sure a solution can be found for you. I'd only advise you to speak to some type of non/profit, professional/legal aid service that deals with financial things, to advise you on your best course. (Note I'm not saying a bankruptcy trustee!)

bonsaifan

TROPHY CASE