Personal Services Business
The legislative changes basically removed many of the benefits to incorporating. The small business deduction was eliminated for PSBs and expenses restricted to the remuneration paid, including benefits, to the “incorporated employee” and those deductions which would normally be deductible from an individual’s employment income. Even with the restrictions, PSBs still enjoyed a healthy tax deferral through incorporation to the extent the money was left within the corporation. The result being trapped corporate surplus which we, as trusted advisors, are often called upon to provide guidance.