Tax Tips 2017: For Corporations And The Self-Employed

Tax Tips: If you have your own corporation

1. 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.
• Dividends, on the other hand, may cost the family unit less in current taxes. Each family member, over 17 years of age and receiving non-eligible dividend income of approximately
• $33,308 or less, or $51,635 or less of eligible dividends, from taxable Canadian corporations, will pay little or no income tax (a small Ontario Health Tax premium may apply). The tax on split income eliminates the tax benefits of paying dividends to children under 18 years of age. Note that 2017 may be the last year to split dividend income with family members who are not active in the business. As discussed previously,