Today’s Spotlight: Tax Planning for Canadian Entrepreneurs
Chosen theme: Tax Planning for Canadian Entrepreneurs. Welcome to a practical, encouraging deep dive into smart strategies that help you keep more of what you earn, grow with confidence, and make informed decisions. Subscribe to stay ahead of deadlines, incentives, and opportunities tailored to Canadian founders.
CCPC Status and the Small Business Deduction
Canadian-controlled private corporation status often opens access to the federal small business rate on active business income, plus provincial relief. One founder we know lowered their blended rate dramatically by qualifying early, then protected it by managing passive income that can grind down the deduction.
Choosing the Right Business Structure
Sole proprietor, partnership, or corporation—each pathway affects risk, flexibility, and taxes. Many entrepreneurs incorporate when profits stabilize, using the corporation for deferral and income smoothing. Ask questions, compare scenarios, and share your experience in the comments to help others choose wisely.
Records, Deadlines, and CRA-Ready Habits
Clean bookkeeping is a superpower. Separate bank accounts, documented receipts, and a monthly close make GST/HST, payroll, and income tax filings far less stressful. One client avoided a costly reassessment because their reconciliations and mileage logs were meticulous from day one.
Sales Tax Confidence: GST/HST Done Right
Monitor your revenue to identify when registration becomes mandatory. Some service businesses benefit from the Quick Method’s simplified remittance. One consultant cut admin time in half and still improved net results after switching. Review annually, and comment if you want our decision checklist.
Sales Tax Confidence: GST/HST Done Right
Claim input tax credits only on eligible purchases, paired with valid invoices. Use cloud tools to capture receipts instantly and tag GST/HST correctly. A disciplined weekly routine prevents lost credits and audit stress, turning compliance into a calm, repeatable habit.
Build Wealth Inside and Outside Your Corporation
Passive Income Rules, RDTOH, and Dividend Types
Corporate investment income interacts with refundable tax pools and dividend classifications. Understanding these mechanics can improve after-tax cash flow. A founder rebalanced from interest to eligible dividends and capital gains, smoothing payouts and preserving access to lower active business rates.
RRSP, TFSA, and IPP Coordination
Blend corporate savings with personal accounts. Salary-driven RRSP room, tax-free TFSA growth, and defined benefits through an IPP can complement retained earnings. Share your goals, and we’ll suggest a simple tiered approach for contributions across good, better, and best-case profit scenarios.
Planning for the Lifetime Capital Gains Exemption
Qualifying small business corporation shares may be eligible for a substantial lifetime capital gains exemption on sale. Keep your company “pure” by managing passive assets and intercompany balances. One entrepreneur performed a timely cleanup, preserving eligibility and unlocking life-changing exit value.
Plan the Exit: Succession and Sale Strategies
A share freeze can lock in existing value for founders while future growth accrues to the next generation. We watched a family bakery keep harmony by aligning roles, compensation, and equity well before the handoff. Start conversations early and document intentions clearly.
Plan the Exit: Succession and Sale Strategies
Buyers often prefer assets; sellers often prefer shares. The difference affects tax rates, warranties, and post-sale risks. Model both scenarios, then negotiate price and terms accordingly. Our community stories highlight wins achieved by preparing a clean data room months before listing.
Plan the Exit: Succession and Sale Strategies
Trusts can support income splitting, creditor protection, or succession, when structured properly. Pair them with an updated will and thoughtful shareholder agreements. If legacy matters to you, tell us what you want your business to stand for, and we’ll explore structures that fit.