01 May 2019 | Blog Business Owners Corporate Life Insurance

Accessing Corporate Earnings

One of the financial planning issues that business owners face is how to access corporate earnings from their corporation in a tax-efficient way. We’ve provided a short list here of 5 ways to do this, any of which we have the skills and knowledge you guide you through.

There are 5 standard methods:

  • Salary

    • Pay tax personally
    • Deduct from corporate income
    • Generates RRSP room
    • Allows for CPP contribution
  • Dividends

    • The corporation pays tax on gross
    • The personal tax rate is lower on dividends
  • Shareholder Loans

    • Take money out on a per-need basis
    • Don’t “Borrow” it for too long otherwise, CRA will declare it as personal income
  • Transfer Personal Assets

    • Transfer personal property to the corporation
    • The amount can be different from FMV if it meets certain conditions
  • Income Splitting

    • Divide profits between taxpayers so more income is taxed at a lower rate
    • Pay family members a reasonable salary for the services they provide to the corporation
    • Consult your advisor to avoid attribution rules

There are also unique ways of utilizing life insurance and critical illness insurance to access your retained earnings. Please contact us to learn how we can get more money in your pockets and access your corporate earnings!

Take the Next Step

Our team in Nanaimo has acquired decades of experience specializing in providing quality financial advice in areas of financial planning, investments and insurance. Book a meeting with us to learn how we can help you with your finances.

Meet With Us

Our Expertise

Rather than offer our clients generic, mass-market financial solutions, we work exclusively with a small number of privileged clients who benefit from the expertise of skilled wealth management specialists. With our professional qualifications, we are highly experienced in creating close and trusted partnerships with clients and delivering innovative solutions.

Learn More