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Ready To Put It In Inc.?

Collins BarroW Inc. Ready to put it in Inc.? Explore the tax advantages of incorporation Incorporation offers numerous tax benefits to small businesses and professional practices. Consider the following tax advantages of incorporating your business. Limited liability It's not personal When you incorporate, your business becomes a separate legal entity. In certain cases, creditors only gain access to the amount you invest in the corporation, which safeguards your personal property in the event of financial difficulty. NOT FOR SALE Small business deduction Small business, big savings Incorporated businesses and professional practices may qualify for the small business deduction, leading to much lower tax rates on active business income generated in Canada. OPEN 2014 combined federal 15.5% on the first $500,000 26.5% and Ontario corporate tax rates on active business income: above $500,000 Personal tax deferral Pay down the road As a sole proprietor or business partner, your income is subject to the marginal tax rates for individuals, which can be as high as 49.53%. If you incorporate, defer personal income tax by retaining some income in your corporation. Life insurance Rewards for thinking ahead Save money by establishing your corporation as owner and beneficiary of your insurance policy. This way, less pre-tax income will be required to cover the costs of your premiums. Capital gains Save on capital gains You could be eligible for a lifetime capital gains exemption (LCGE) of $800,000 if certain criteria are met. Depending on the circumstances, the LCGE may translate into savings of up to $200,000. Income splitting A family affair To save taxes, dividends from your corporation can be paid to adult family members in lower income brackets if the appropriate share structure is in place and permitted by applicable regulatory bodies. In Ontario, an individual with no other income $35,000 of non-eligible dividends can receive the following amounts tax free in 2014: $49,000 of eligible dividends Estate planning Pass it on Minimize capital gains tax on death by implementing an appropriate share structure for your corporation. Check with your profession's regulatory body for any restrictions. Need help deciding if incorporation makes sense for your business or professional practice? Contact the experts at Collins Barrow for actionable advice and personalized solutions. While this infographic provides general planning parameters, Collins Barrow recommends that you seek professional advice before taking specific tax planning steps. made by mayk ideas Visit collinsbarrow.com for further information. An independent member of BAKER TILLY Clarity Defined. Collins Barrow INTERNATIONAL collinsbarrow.com

Ready To Put It In Inc.?

shared by EmmaCale on Mar 11
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For small businesses and professional practices such as dentist offices, incorporation often leads to substantial tax savings. Collins Barrow's latest infographic provides an overview.

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