Real Clients.
Real Tax Solutions.
Real Happy.

We completed a detailed salary versus dividend analysis built on the dentist's corporate income, personal cash requirements and long term financial objectives. The analysis weighed Ontario personal income tax, corporate income tax, CPP contributions and future benefits, RRSP contribution room, Ontario Employer Health Tax, Employment Insurance, corporate investments, personal cash flow requirements, and retirement and succession objectives.

We also reviewed the dentist's voting control of the professional corporation. An employee who controls more than 40% of a corporation's voting shares is generally not in insurable employment, meaning the dentist may have been paying EI premiums that were never required. We identified the correct treatment and explained how previously paid premiums could be corrected.

Ontario Employer Health Tax was priced into the recommendation before any change in salary, so a strategy built to reduce income tax would not quietly increase provincial payroll taxes.

We developed a succession plan using a section 85 rollover.

The barber transferred the business assets to a newly incorporated company on a tax-deferred basis. In exchange, he received fixed-value preferred shares representing the value he had already built in the business.

His son acquired common shares of the corporation, allowing future growth to accrue to him as he gradually assumed ownership and responsibility for the business.

This structure deferred the immediate tax on the transfer, preserved the father’s existing value and provided flexibility to redeem his preferred shares gradually during retirement. It created an orderly transition that allowed the business to remain in the family.

We obtained CRA authorization, reviewed each company account and prepared a clear list of everything that needed to be filed.

We then worked through the records year by year, completed the bookkeeping and filed the outstanding corporate tax and GST returns. As part of this work, we made sure that all legitimate business expenses, prior tax payments and available GST input tax credits were properly accounted for.

Once CRA processed the returns, we reconciled the assessments and gave the owner a clear breakdown of the company’s actual balance. We also helped respond to CRA correspondence and set up a practical plan for staying current going forward.

The company is now fully caught up, the owner knows exactly where things stand, and there is a reliable process in place to prevent the same problem from happening again.