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Get this right because it has implications on the tax you pay, eligibility for SR&ED, your ability to get a mortgage.
a. Dividends are better IF your personal requirements are less than $10,000 / month
Remember - You can’t issue dividends if you are not profitable!
b. Salary is better IF your personal requirements are more than $13,000 / month
Photo by Leeloo The First
Planning to buy a home, get a personal loan or mortgage?
Lenders prefer salary income.
Remember - If you are applying for SR&ED, pay yourself a salary!
<aside> 🔥
Reducing the tax bill is NOT the only criteria for the Salary vs Dividends debate.
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Photo by SevenStorm JUHASZIMRUS
Purchased any of these for your business?
Laptops and OS purchase, printers
IT infrastructure
Patents
Until 31 Dec, 2026 you can claim 100% depreciation on them.
<aside> ⌛
You have until EOY 2026 to claim 100% depreciation on your business’ IT needs
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Do you conduct fundamental, applied or technology research?
SR&ED is đź’°Â that you should not miss out!
Claim up to 65% in Salary and 34% in Contractor expenses as a tax refund.
Remember: Only payments to Canadian tax residents are eligible.
Photo by Pixabay
Here’s a 5 min Guide to SR&ED to learn more!
<aside> 🔥
Canada gives out ~$4 Billion in SR&ED refunds - be part of the in-group!
</aside>
Photo by Benjamin Child on Unsplash
Selling a company?
Want to shelter up to $1MM from being taxed?
Use a Hold Co.
You can read more about this strategy here.
<aside> 🔥
Hold Cos also offer certain legal liability protections.
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