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Incorporation - Awesome Tax Savings
Canadian Controlled Private Corporations can qualify to pay tax at 17.37% for 2002 in Alberta (Click HERE for more corporate rates) on the first $200,000 of active business income not shared between associated corporations. The lowest personal tax bracket rate for income at about $30,000 is 32% and can be as high as 39% for incomes over $100,000 in Alberta for 2002 (Click HERE for more personal rates).
To the extent that your business earns income in excess of your personal requirements, it may make sense to incorporate and take advantage of the lower rate tax for corporations. Proper planning, especially if your business is really employment income, is critical. Discussion with a chartered accountant is essential.
Careful planning with a Chartered Accountant is warranted. Contact Keith Anderson CA at (780) 447-5830 if you need advice.
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