Income taxes are the biggest expense for most Canadian. If you have your own business or professional corporation, your company can help generate tax savings to accelerate your mortgage repayment or boost your retirement savings.
Tuesday 1 May 2012
Tax Saving Tips for Business, Professional Corporation
Income taxes are the biggest expense for most Canadian. If you have your own business or professional corporation, your company can help generate tax savings to accelerate your mortgage repayment or boost your retirement savings.
Split Income With Family Members
The corporate tax rate is
around 10% (depending on your province), compared to the highest personal tax
bracket of around 40%. Tax saving can be enormous by channelling corporate
income to family members in a lower tax bracket, instead of paying all the
income to you alone.
Maximize Deductible Pension Contributions
Consider swithing your
retirement savings to an Individual Pension Plan (IPP),
instead of the RRSP. You can make larger contributions to an IPP than to the
RRSP, especially if you are over 50 and you are also entitled to a large tax
deduction for past service contribution.
Deduct Mortgage Interest
If you have a sizable
house mortgage, you should look for creative ways to write off the mortgage interest
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