Grant Thornton LLP wants to remind Canadian taxpayers and businesses that now is the time to employ end-of-year tax planning strategies that can help reduce the overall tax burden.
On the second day of tax tips, maximize the small business deduction. The first $500,000 of active business income receives preferential tax treatment by qualifying for the small business deduction, and this preferential treatment begins to be phased out when a corporation’s taxable capital reaches $10 million (this could be less where the company is associated with other corporations). Since the taxable capital of a corporation is determined at year-end, check to see if your company will meet or exceed this threshold and apply strategies to reduce the amount if necessary.
Other days of tax tips:
Day 1: Switching year-end bonuses into dividends