Our annual Tax Tips Guide is here to assist you in your tax
planning, presenting some quick ideas and strategies for you to
employ.
If you have your own corporation
Consider your optimum salary/ dividend mix to achieve less
overall tax:
Salary will qualify you and other family members active in the
business for RRSP contributions, Canada Pension Plan (CPP)
contributions, and child-care deductions. Dividends will not
qualify an individual for these contributions or deductions.
In the past, the payment of dividends to shareholders over 17
years of age was an easy way to achieve income splitting, costing
the family unit less in current taxes. With the introduction of
TOSI (Tax on Split Income), income splitting has become
significantly more difficult. The TOSI eliminates the tax benefits
of paying dividends to family members (with little or no other
sources of income), who are not active in the business or who do
not own "excluded shares" of the company. If TOSI
