Coordinated corporate and personal tax planning
Salary and dividend planning
There is no single answer to whether a business owner should receive salary, dividends, or a combination of both.
The right mix depends on factors such as:
- Your personal cash needs
- Other sources of income
- CPP contributions
- RRSP contribution room
- Corporate profitability
- Personal and corporate tax rates
- Longer-term retirement and investment plans
We review these factors together so the compensation strategy fits both the corporation and the owner.
Shareholder loan balances
Amounts withdrawn from a corporation are not always automatically treated as dividends or salary.
Shareholder loan balances can create personal tax consequences if they are not repaid or addressed within the required time. We review these balances as part of the corporate and personal tax process and help identify the available options.
Family members and income splitting
Payments to family members must reflect the work performed, ownership structure, and applicable tax rules.
We review salary and dividend arrangements involving spouses or other family members, including the Tax on Split Income rules, to determine whether the proposed treatment is supportable.
Personal deductions and credits
When preparing the owner's personal tax return, we also review items such as:
- RRSP contributions
- Medical expenses
- Charitable donations
- Investment income
- Rental income
- Home office arrangements
- Employment or professional expenses
- Instalments and prior-year balances
Capital dividends and other corporate distributions
Some amounts can be paid from a corporation with different personal tax consequences.
This may include capital dividends, eligible and non-eligible dividends, repayment of shareholder loans, and other distributions. We help determine how the payment should be treated and prepare the related tax filings where required.
Why coordinate the filings?
When the same accountant prepares both the corporate and personal tax returns, related amounts can be reviewed together.
This helps confirm that:
- T4 and T5 slips agree with the personal return
- Salary and dividend amounts are reported consistently
- Shareholder transactions are properly reflected
- Corporate and personal deadlines are coordinated
- Planning decisions consider the total tax effect
It also reduces the risk of information being missed between separate advisers.
Who this service is for
Personal tax services are intended for:
- Owners of incorporated businesses
- Spouses and immediate family members of corporate clients
- Incorporated consultants and professionals
- Business owners with salary, dividend, or shareholder loan income
- Clients with personal tax matters connected to their corporation
Standalone personal tax returns are generally not accepted unless they are connected to an existing corporate engagement.
How the process works
1. Corporate information is reviewed
We confirm salary, dividends, shareholder balances, and other amounts reported by the corporation.
2. Personal tax documents are collected
You provide the slips, receipts, and other personal tax information needed for the return.
3. The corporate and personal positions are reconciled
We review related transactions across both returns and follow up on any differences or planning issues.
4. The return is reviewed and filed
You receive the completed return, a summary of taxes owing or refunds, and any relevant instalment or planning information.
Personal tax planning for business owners
Tax planning is more useful when it happens before the slips and returns are prepared.
We help corporate clients consider compensation, instalments, investment income, shareholder balances, and other personal tax matters throughout the year, while there is still time to act.
