Tips

Significantly Reduce Your Taxes
You can significantly reduce your overall income taxes by leaving income in your corporation that will only be taxed at approximately 20%, and avoid the highest personal income tax rates of 40% to 50%.

Build A Big Corporate Retirement Fund
Using the low corporate income tax rate of approximately 20%, you can retain income in your company, and use your company as a strategy to accumulate a significant retirement investment portfolio for yourself.

Get A Tax Free Loan
You may be eligible to borrow money from your company to buy a home or automobile without having to immediately declare the loan as personal income.

Receive Tax Free Retirement Dividends
Upon retirement, or during a sabbatical from working, your spouse and you can receive dividends of approximately $30,000 each from your company, and if you have no other personal income, the total $60,000 of dividend income can be received as personal income tax free.

Smooth Income
Should your IT contracting income fluctuate significantly from one year to the next, you can use your company to smooth out your personal income over two or more years, resulting in lower overall income taxes.

Protect Personal Assets
Your company provides you with limited liability from your corporate IT contracting work, resulting in protection of your personal assets.

Increase Your Marketability
Due to the increased tax audit risk from the Canada Revenue Agency (CRA - formerly Revenue Canada) , many large customers and IT staffing agencies prefer to deal only with incorporated IT contractors, and not sole proprietor IT contractors.

Additional Tax/Financial Strateges Available
Corporations have additional tax and financial planning stratagies available for your use such as the creation of individual pension plans, investment holding companies, joint venture companies, etc.