Solutions To The Great Tax Spike Of 2018
Business Owners, including Professionals, employ Canadians, provide goods, services and pay taxes, making Canada one of the best countries in the world!
To encourage companies, successive governments have continued the principle of lower corporate taxes. But when creating wealth personally, one must typically pay tax of 53.5% (Ontario).
Now in 2019, corporations will be forced to pay 12.5% on the first $500,000 of income and 25.5%, thereafter (Ontario). In a corporation, you can create an additional 28-41% more wealth that is tax deferred until you extract the cash from your company.
Maximize Your Corporate Advantage
Wealth in your companie(s) is created when you do not need to extract the cash from your corporation to support your lifestyle. Our speciality for over 30 years is that we show our clients how to extract cash from their corporation with as little incremental tax as possible, thereby allowing wealth creation inside the corporation.
We pair insurance and investment products with other tax strategies to amplify a business owner's corporate wealth creation.
For products to be part of our clients plan, they must meet 4 criteria;
- Low risk
- Little maintenance
- Elevated results on wealth creation
- World class solutions paired with best in class tax ideas
2018 Tax Change - Tax On Split Income (TOSI)
Current tax changes eliminate dividend sprinkling to a professionals' spouse and to their children ages 18-25.
2019 Tax Change - Tax On Passive Income (TOPI)
When your corporation pays tax at 12.5% and has more than $50,000 of taxable annual passive income, you will pay an additional $0.70 tax on each incremental dollar of taxable passive income to a maximum of $70,000 (plus the tax on the passive income itself). This means an effective tax of $0.75 on dividend income and $0.95 on interest, rental and foreign income.
Wealth Retention Solutions
The current government specifically designed TOSI & TOPI to reduce your wealth.
Now more than ever, tax efficient cash extraction strategies are vital to replace the loss of dividend sprinkling to family members and proactive investment strategies to avoid having over $50,000 of taxable passive income.
Contact us to arrange a meeting to discuss solutions for you to avoid these new threats to your lifestyle and wealth.