What is a Professional Corporation?
Doctors, lawyers, accountants, dentists, chiropractors, registered nurses, massage therapists, social workers, veterinarians, optometrists, pharmacists and other professionals, can incorporate a professional corporation to significantly reduce their taxes.
Since 2000, Ontario has permitted the use of Professional Corporations for several types of professionals. Professional corporations essentially confer to professionals the same tax advantages enjoyed by corporations, such as tax deferral and investment. The only distinction is that professionals are not afforded limited liability that ordinary corporations enjoy.
Why Incorporate Professionally – Reduce your Taxes
Incorporating a professional corporation will allow you to reduce your overall tax burden thereby providing you with greater investment earning capacity on your discretionary income. A professional corporation will enable you to pay tax only on the income that you draw out. The remaining funds can be invested in a corporation and can garner a far greater earning capacity than you would otherwise enjoy if invested personally.
What are the immediate tax advantages of incorporating a professional corporation? First, corporations pay far less tax than individuals pay. If qualified, corporations are subject to the Small Business Deduction, which, in Ontario, is currently taxed at the rate of 13.5 percent effective January 1, 2018, a significant savings compared to an average combined marginal personal tax rate of about 39 percent.
Why Kalfa Law Firm
With years of experience in corporate and commercial law and with a significant client base in the medical field, Kalfa Law Firm is your premier partner to establish your professional corporation for your tax planning needs.
Are you a professional looking to minimize taxes? We’re Here to Help™
