Question for Canadian business owners
- Thread starter avatar33
- Start date
Here's what my accountant says:
The corporate taxes are 13.5% up to $500,000 of taxable income in the corporation.
The personal taxes are as follows:
First $40,000, tax is 20%
Next $40,000 tax is 30%
Next $45,000 tax is 40%
Above $125,000, tax is 43.7%
Dividends are taxed at lower rates than salary, because of the corporate taxes paid at 13.5%.
Overall, there is no advantage or disadvantage tax wise to pay taxes as dividends or salary.
In the long run, if you do not need the moneys personally, then you are better with holding the funds corporately(13.5%) then with taxes personally (43.7%)
The corporate taxes are 13.5% up to $500,000 of taxable income in the corporation.
The personal taxes are as follows:
First $40,000, tax is 20%
Next $40,000 tax is 30%
Next $45,000 tax is 40%
Above $125,000, tax is 43.7%
Dividends are taxed at lower rates than salary, because of the corporate taxes paid at 13.5%.
Overall, there is no advantage or disadvantage tax wise to pay taxes as dividends or salary.
In the long run, if you do not need the moneys personally, then you are better with holding the funds corporately(13.5%) then with taxes personally (43.7%)
