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Jun
25

How to save corporate taxes in Canada – by Accountant Toronto.wmv

Learn about the 10 best tax tips on How to Save Corporate taxes in Canada. The tax tips featured in this video are: 1. The benefits of dividends over salary …

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24 comments

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  1. dtrantin says:

    Hello. If I have a full time job, and I also have incorporated a company for my consulting side business. How much tax do I pay (in Quebec) if I pull dividends. I’m assuming the first 40K is taxable in this? scenario, if correct, how much?
    Much appreciated.

  2. Bob Thunder says:

    Hello: I chatted with you last summer about incorporating–I finely bit the? bullet and did it 🙂 Now it is designing the best tax plan possible. Do you do this service? And if so, at what cost? Please feel free to message me.

  3. cabdisomali says:

    Great vid! Thanks. Question:? the $50.000 to purchase home, similarly, could you take out the same amount for an investment, purposes say property or stocks?

  4. biggurs says:

    how about “other” tax saving tips nudge nudge wink wink
    Lets get to the crunch…….. lets? talk about tax AVOIDANCE!

  5. Oleg Tunsky says:

    Can I get $40k tax free dividends if I live? in Montreal, QC?

  6. Allan Madan says:

    Yes, you can register the property under the corporation. The bank will look at your personal incomes to verify if you have sufficient income to sustain the debt? on the properties.

    You can also have your name on title to the properties, if the bank won’t lend to your corporation. Then, enter into a bare trust with your corporation. This means that your corporation has legal ownership of the properties, even though you are on title.

    Allan

  7. Ozzycanada1966 says:

    Great videos and tips. Just created a Property Management Corp as I have 4 real estate properties (two rented & two preconstruction). My Corp would be too young let’s say in a year from now so I am assuming the Corp won’t be able to get a mortgage to buy another property. So is it possible? for me and my wife (both shareholders) to apply to a mortgage (using our personal income) and at closing register the property under the Corp? I am in Burlington, will talk as I need an accountant, Thanks Ed

  8. Shawn Blais says:

    Hey Allan, thanks for the response, I wish you were in the Edmonton area I would come pay you a visit in a heartbeat!

    I’m under the impression that if I pay myself dividends from the company, I can pay a much lower tax rate than my own personal 29%, is that the case?

    Also, what would be the end game of keeping money in the corporation? I understand that it would reduce the taxes paid that? year, but at some point I need to get the money out of there and into my pocket…

  9. Allan Madan says:

    It makes sense to incorporate if you can save money inside the? corporation, i.e. you don’t require all of your business profits to pay for personal expenses. Money kept inside the corporation is only taxable at 10% (federal rate), while your marginal tax rate is 29% (federal only).

    Salary paid to a spouse must be reasonable in relation to the work she is performing.

    Make sure that the corporation issues separate classes of shares for dividend sprinkling.

    Allan

  10. Shawn Blais says:

    @allanmadan @allanmadan And what if I? do? I have a full time job earning 60k, and a sole proprietership earning 120k-140k/year which I’m planning on incorporating.

    I’d like to pay my wife $38k (so we show a decent amount of earned income), and then sprinkle dividends to both of us, and potentially our children to avoid taxes. Would that work?

  11. Shawn Blais says:

    And what if I do? I have a full time job earning 60k, and a sole proprietership earning 120k-140k/year which I’m planning on incorporating.

    I’d like to pay my wife $38k (so we show a decent amount of earned income), and then sprinkle dividends to both of us, and potentially our children? to avoid taxes. Would that work?

  12. Allan Madan says:

    Yes, the first $40,000 of dividends are not subject to income tax, providing that you have no other source of income. You must ensure that the articles of incorporation permit dividends to be paid on the shares that you own.

    Allan Madan, CA
    Madan Chartered Accountant?

  13. Allan Madan says:

    Thank you for the compliment. Incorporating is an excellent way to save taxes.

    Allan Madan, CA
    Madan Chartered Accountant?

  14. Allan Madan says:

    My email address is amadan@madanca.com

    Allan Madan,? CA
    Madan Chartered Accountant

  15. Allan Madan says:

    Thank you for your question.

    If the corporation has separate classes of shares, and? those shares have the right to receive dividends at the discretion of the board of directors, then the board can declare dividends in differing amounts for each class of shares. So, your corporation can split the dividends 80/20 one year, and 90/10 the next year.

    Allan Madan, CA

  16. Allan Madan says:

    Thank you for your question.

    If the corporation has separate classes of shares, and those shares have the right to receive dividends at the discretion of the board of directors, then the board can declare dividends in differing amounts for? each class of shares. So, your corporation can split the dividends 80/20 one year, and 90/10 the next year.

    Allan Madan, CA

  17. Allan Madan says:

    Thank you for your question.

    If the corporation has separate classes of shares, and those shares have the right to receive dividends at the discretion of? the board of directors, then the board can declare dividends in differing amounts for each class of shares. So, your corporation can split the dividends 80/20 one year, and 90/10 the next year.

    Allan Madan, CA

  18. sheepherder4444 says:

    Thank you sir. All your videos? are very helpful. About that dividend sprinkling. Can you set up 2 different classes of shares and unevenly distribute the dividends? Some years 80/20 other years 90/10? Also do you write up articles of incorporation? Thanks

  19. itsanameisntit says:

    I wish you? were my accountant. Mine didn’t tell me anything when I incorporated. I’m in Vancouver.

  20. Umair Salim says:

    Allan thanks for the video could you please forward me your email address.?

  21. baller1069 says:

    Are you sure the first 40k of dividends are tax free?? What restrictions are there on this?

  22. vipcanadajunk says:

    Hi Allan, It was a great video explained in a very simple way.
    I am incorporate for a year now and these tips were very? usefull for me.
    regards
    Vipin

  23. Allan Madan says:

    Thank you for your question.

    The 10 best tax tips provided pertain to? Canadian Controlled Private Corporations, regardless of the province of residence. Generally speaking, all provinces more or less follow the Federal Income Tax Act. While Alberta has its own income tax act and its own corporate tax return, these tips still apply to Alberta corporations.

    Allan Madan, CA

  24. Whistler GoneWild says:

    Sounds good Mr Madan. Are these tips from your provincial experience or would they be in effect within Alberta as well? What is your experience? with incorporation within Alberta?

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