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Incorporate and Save Tax
Posted on November 19, 2007 at 11:10 am
Filed Under Canadian Taxes, Financial Planning, Investment Planning
Canadians are always looking for ways to save tax on their income, and incorporating may just be a perfect solution.
The highest tax bracket for a Canadian paying personal tax is 46% however business income in a Canadian controlled corporation is only in and around 18% up to the first $400,000 and then 36% there after. That is a substantial savings for an individual earning a large income who may be a small or medium sized business owner and is in a position to take advantage of his own Canadian controlled corporation.
Your Take-Away: This strategy is by no means for everyone. Depending on your Profession, you may be able to incorporate even if you don’t own and operate a small or medium sized business. For example, Doctor’s are now able to incorporate but only as of this year. Whether it be paying yourself a dividend as opposed to pure earned income, investing back in your business, or simply leaving money inside your corporation and investing it from there, the benefits can be substantial.
Take the time to learn for yourself if this is something that you and your family can benefit from.
Until next time, have a Magnificent Monday!
Chris
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