The Salary vs. Dividend Strategy
For incorporated business owners and major shareholders, determining how to extract capital from the corporation is a critical strategic decision. Paying out dividends, whether eligible or non-eligible, requires the precise preparation and filing of a T5 Return of Investment Income.
We help executive teams and owner-operators model the exact, most tax-efficient mix of salary and dividends for their specific personal tax brackets. Our goal is to extract your wealth from the corporation while minimizing the overall tax burden on both the entity and the individual.
T5 Preparation & Advisory
- Tax Integration Optimization: The Canadian tax system is designed around "integration": the concept that income should be taxed at roughly the same rate whether earned personally or through a corporation. We offset the corporate taxes you pay against your personal tax rate to eliminate double taxation.
- Shareholder Documentation: We handle the complex preparation of the necessary T5 slips for all corporate shareholders, ensuring accurate reporting of investment income.
- Deadline Management: Failing to file T5 summaries on time results in immediate late penalties. We manage your corporate timeline, ensuring all investment income summaries are filed accurately with the CRA before late-winter deadlines.
