fwiw, he should also stay out of careers forums.kaycee8877 wrote: ↑Mark please stay out of any tax related threads. You have posted completely false and incorrect information multiple times in these tax threads, then argue about how you are right using the biggest longest words and tangents you can muster, then you disappear once its obviously proven you are wrong.
Tax efficient ways to transer money from corporate acc. to personal
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- Apr 17th, 2014 9:17 pm
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- damnos
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- wm009
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This simply isn't true. Dividend tax credits certainly don't apply to some guys small corporation. You have to make a lot of money, pay a higher corporate tax rate to get that tax credit. For this guy, dividend tax rate (not dividend credit eligible) plus corporate tax rate = personal income tax rate. The government isn't stupid.CanuckGreg wrote: ↑This. If you're a shareholder pay yourself dividends. The first $40k is basically exempt from personal taxes, and no CPP or EI contributions, so your net tax rate is 15.5% (small business corporate tax rate).
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- CanuckGreg
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I realize they've changed the rules for personal tax year 2014 to reduce this advantage somewhat, but can you give an example where it doesn't work?wm009 wrote: ↑This simply isn't true. Dividend tax credits certainly don't apply to some guys small corporation. You have to make a lot of money, pay a higher corporate tax rate to get that tax credit. For this guy, dividend tax rate (not dividend credit eligible) plus corporate tax rate = personal income tax rate. The government isn't stupid.
/not being difficult, just curious.
- Guest38388394944
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Actually, this is not true. You can claim up to around $40,000 on non-eligible dividends as long as you have no other income. The personal tax rate is 0% on this.
It does not matter on the size of the corporation.
Source: http://www.taxtips.ca/dtc/smallbusdtc.htm
- wm009
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CanuckGreg, I'm not sure where the rules were ever changed for that because it never worked that way. Like Alberta for example, non-eligible dividends have a higher tax rate then capital gains. Eligible dividend tax rate on first $43k = negative 0.03%. Non-eligible on first $43k = 12.84%
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- bsobaid [OP]
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Any ideas?
- JWL
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True that the net tax paid via salary or dividends works out to being the same.
But paying via dividends does save the corporation and the employee from paying CPP or EI. Downside is that you aren't eligible for benefits. I've been told that it is a good idea to pay about $4600 of salary so that you hit the point where some CPP payments have to be made and that makes you eligible for CPP disability benefits.
But paying via dividends does save the corporation and the employee from paying CPP or EI. Downside is that you aren't eligible for benefits. I've been told that it is a good idea to pay about $4600 of salary so that you hit the point where some CPP payments have to be made and that makes you eligible for CPP disability benefits.
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