Federal or provincial? These are the two types of incorporation you choose from whenever you decide to incorporate your business. Perhaps it has crossed your mind a couple of times in the past. In fact, you must have thought of it the moment you decided to start your own business. Other people you have consulted regarding incorporating your business, in the beginning, must have discouraged you from going for it. And most expert accountants in Edmonton would only tell you that the decision is solely based on what you think.
Is business incorporation necessary? Law does not require it for all businesses, that’s why it is essential to know when the right time is for you to incorporate your business if you decide to. Although you may have apprehensions concerning it, incorporating a company comes with its own set of benefits, and that pertains to taxes.
Have you heard of small business tax deduction? The tax on businesses that fall under it is calculated at the rate of 17% of the first $500,000 income. When you incorporate your business, it means that you are distributing the shares of the business to the people that you trust. Most business owners who decide to incorporate the business declare their family members as shareholders of the company. Since the income doesn’t go to one person alone, the tax that you are charged with becomes smaller.
SBD or Small Business Tax Deduction may perhaps be the best form of tax exemption that you benefit from incorporating your business. Apart from that, you become more in control of when you will receive your share in the income earned by the business. This means that you can decide to distribute income when the tax rates are low. Such manipulation can be done best with the help of an expert accountant or an accounting firm in Edmonton.
Lastly, tax deferrals are also one way you can potentially save on tax payments in case you decide to incorporate your business. Ask an accountant in Edmonton for help to help you understand how your business can belong to the lower slab in case of tax rates.
Whether you decide to incorporate your business is really up to you. But to make a wise and sound decision, it is best to consult the expert on what to do. Only trusted accountants in Edmonton can honestly explain to you what comes with the choice and why it is best for your business today and in the future.