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How to Save Tax in Ontario by Using a Corporation

Here are some of the key benefits of incorporating:

  • Lower tax rates: The Ontario corporate tax rate for small businesses (with taxable income up to $500,000) is 11.5%. This is significantly lower than Ontario's top personal income tax rate, which is 53.53%.
  • Income splitting: One of the most significant tax benefits of incorporating is income splitting. This allows you to split your business income with your spouse, children, or other family members. This can be very beneficial if your family members have lower income tax rates than you do.
  • Dividends: Another tax benefit of incorporating is that you can pay yourself dividends from your corporation. Dividends are taxed lower than regular income, which can be a great way to save tax.
  • Capital gains deduction: When you sell shares of your corporation, you may be eligible for a capital gains deduction. This deduction can reduce your taxable capital gain by up to 50%.

If you are a business owner in Ontario, we can help you to incorporate your business and take advantage of the tax benefits that come with it. We can also help you to develop a tax planning strategy to minimize your tax liability.

Contact us today for a free consultation.

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