Tax question about incorporating my business
Hi!
I have a small business and make ~230k/year on average.
No employees, only me.
If I understand correctly, the money I "reinvest" in my business, instead of being taxed at ~53% (marginal), I would pay about 20% (corporation tax rate in Quebec).
But here's what I don't understand.
When I ultimately decide to take this money out of my business say at my retirement in 25 years, won't I be taxed once more on this money, this time at my personal tax rate?
If so, then wouldn't it be like getting taxed twice?
I understand I might not be taxed at 53% at retirement but I just don't undestand how it could be worth it with all the added costs, complexity and responsabilities that comes with incorporating if on top you get taxed twice on the same money...
I must be missing something...
Thanks for telling me what I might be missing here!
There
I have a small business and make ~230k/year on average.
No employees, only me.
If I understand correctly, the money I "reinvest" in my business, instead of being taxed at ~53% (marginal), I would pay about 20% (corporation tax rate in Quebec).
But here's what I don't understand.
When I ultimately decide to take this money out of my business say at my retirement in 25 years, won't I be taxed once more on this money, this time at my personal tax rate?
If so, then wouldn't it be like getting taxed twice?
I understand I might not be taxed at 53% at retirement but I just don't undestand how it could be worth it with all the added costs, complexity and responsabilities that comes with incorporating if on top you get taxed twice on the same money...
I must be missing something...
Thanks for telling me what I might be missing here!
There