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Benefits to Incorporating In Canada for traders
- Thread starter GRECHA
- Start date
There are sometimes (but not necessarily always) cases where incorporation can help protect your assets -- talk to an accountant about this aspect of incorporation.
If you are a profitable trader and wish to *defer* your income tax, then incorporation is the way to go. Your company will be taxed at a much lower rate and you won't pay any personal income tax until your company pays you (in the form of dividends).
Also, the lower tax rate for incorporations means you can compound your growth more effectively because less money is shaved off each year for income tax.
Mark
If you are a profitable trader and wish to *defer* your income tax, then incorporation is the way to go. Your company will be taxed at a much lower rate and you won't pay any personal income tax until your company pays you (in the form of dividends).
Also, the lower tax rate for incorporations means you can compound your growth more effectively because less money is shaved off each year for income tax.
Mark
The only advantage is that you can deduct your losses as ORDINARY losses, instead of Captial Losses. That means, you can actually get some benefit out of taxes, while if it were treated as Capital Losses, you might never be able to get to write them off without the offsetting Capital Gains.
This is 2007.
Simple tax loopholes were all closed long ago.
Always assume the above to start.
Keeping the above in mind...
An individual CANNOT pay significantly less taxes simply by incorporating.
But...
There is the definite benefit...
That one can defer and smooth out income over many years.
Unless you are a CPA...
And are going to insist that my top accounting firm is incompetent...
Well, you get my drift.
Simple tax loopholes were all closed long ago.
Always assume the above to start.
Keeping the above in mind...
An individual CANNOT pay significantly less taxes simply by incorporating.
But...
There is the definite benefit...
That one can defer and smooth out income over many years.
Unless you are a CPA...
And are going to insist that my top accounting firm is incompetent...
Well, you get my drift.