Income Tax - Salary vs Dividends (OC)
Detailed information on the difference in the use for tax purposes of salary and dividends as compensation from both a shareholder and a corporate perspective.
Detailed information on the difference in the use for tax purposes of salary and dividends as compensation from both a shareholder and a corporate perspective. Working through case studies will allow participants to understand and calculate the different tax effects of using one or the other, or both, types of compensation. Examples will cover single shareholder, married shareholder and unrelated shareholder examples to review the different tax effects of these situations from the recipient’s standpoint. Examples will further cover a variety of corporate situations and tax rates to showcase the different dividend options available and tax effects in both situations.
WHO WILL BENEFIT:
Practitioners working with owner-managed business clients / small business clients, assisting them with corporate set-up and tax planning.
By the end of this seminar, participants will be able to:
- understand the tax rates applied to and flow-through costs with respect to each of salary and dividends from both a corporate and a shareholder perspective,
- understand and apply relevant taxation principles to assist clients in understanding the best mix of salary and dividends for their individual situation,
- understand and be able to calculate the tax effects of salary vs dividend distributions to both corporations and shareholders, and
- understand the different types of dividends available to corporations and different timings available for payment / accrual of salary payments.
- Definitions, types and important facts about salary and dividends
- Taxation rates and payroll considerations from the shareholder perspective
- Taxation rates and payroll considerations from the corporate perspective
- Case law - CRA rulings relevant to salary vs dividend choice
- Case studies looking at situations for single shareholder, married shareholders, unrelated shareholders and a variety of shareholder goals (tax goals such as RRSPs, child care, etc and personal goals such as obtaining lending)
- Case Studies looking at situations for both CCPC and non-CCPC corporations and the effect on dividend types / tax effects
- Take-away summary of concepts
Ideally practitioners would have at least one year of experience working in corporate and personal tax.
Ideally, participants would have paper and a calculator available to work through examples as a group or computer with Microsoft Excel.
COURSE LEADER: BRAD KLASSEN, CPA, CA