Business owners pay too much tax to get money out of their corporation to fund RRSPs, IPPs, TFSAs, and even RESPs. Most business owners would be better using their corporation, holding company, or a family trust to invest and potentially split income with other family members.
Many Business Owners plan to sell their business to fund part of their retirement. Failing to ensure your business qualifies for the Lifetime Capital Gains exemption could cost you or your estate over $100,000 in taxes.The rules for qualification are complex, and business owners must seek advice from a tax professional. An unexpected health or other life event could result in an unplanned sale of a company. It is a good idea to ensure the sale of your company will always be eligible for the lifetime capital gains exemption.
Most investment portfolios have taxable distributions. Taxable distributions are not necessary. Over 20 years, unnecessary taxes on your investment income can will your anticipated retirement income by an estimated 18%. Request my white paper “Using a Corporation to Fund Your Retirement Tax-Efficiently” for more information.
Your holding company or trust is often the best place to hold investments such as: real estate, mutual funds, or active businesses. Unfortunately, without carefully planning, a corporation might pay significant taxes on investments when you die. It is important to understand your tax liabilities ahead of time and take steps to address them.
The right team of financial professionals can help you avoid Mistakes 1-4. Otherwise, you are just paying too much tax.
Many people invest because they believe it’s a good way to achieve their financial goals. They also know that getting professional financial advice can help them invest better. If you’re working with a financial advisor (or considering it), you should understand how advisors are compensated. The topic of fees can be complicated, but we’ll sti...Read More
In all Canadian provinces, corporations enjoy a relatively low tax rate. In fact, most business owners and incorporated professionals are better off leaving their retained earnings in a ho...Read More
The best place to save for retirement and grow your wealth may be your corporation, not an RRSP or IPP. Examples below are based on 2021 personal and corporate tax rates for BC taxpayers. Does your business earn $500,000 or less? In 2021, the tax rate on corporate income below the small business deduction threshold of...Read More