Hi Allan,
I wanted to discuss the best way to deal with pending tax changes for money held within my professional corp. How are accountants, lawyers, doctors, dentists dealing with the potential changes? It seems like the tax changes have their eyes squarely focused on going after money retained within the corp. I know they have changed the dividend policy to kids from 18 up to 25… Im wondering what the best strategy is now. What are your thoughts?
Regards
Income splitting is limited now through the use of dividends paid to family members of an owner of a professional corporation (e.g. medicine PC) . Under the new rules, dividends can be paid to family members so long as these conditions are met.
• The family member is 18 years of age or older;
• The family member is consistently working at least 20 hours / week in the business; and
• The amount of the dividend paid is reasonable. Reasonability is determined based on the difficulty of the work duties, experience and education level of the family member receiving the dividend.
For example, if your mother is working as an office administrator in your practice, then she could receive dividends up to $20 per hour, so long as she is working at least 20 hours / week consistently in your practice. This is assuming $20 / hour is the market rate for office administrators.
in Accounting & Taxation Services
Ready to leave your accounting and taxation worries behind?
Unit 20, 145 Traders Blvd E Mississauga ON, L4Z 3L3 Canada
Call: (905) 268-0150 Email: info@madanca.com
SOCIAL CONNECT