How to pay less tax this year if you’re an incorporated business owner

Mr. Golombek is a family friend and can always be counted upon to keep us up-to-date on our complicated Canadian tax system.

In addition to his comments about salaries and dividends for small business owners, I would add a comment about how small business owners with income that varies throughout the year can stabilize their financial situation. The “feast and famine” that accompanies seasonal sales and other periods of higher and lower revenue can be smoothed out by calculating your salary or dividend on a retroactive basis. In other words, rather than celebrating a big contract or large sale, set your monthly salary or dividend based on a 6 month trend and re-evaluate it every 6 months. This will inevitably leave some money in the business during boon times and helps you receive a steady paycheque through the leaner times.

Financial strategies such as these, when combined with valuable tax advice, can help you to build wealth and face your future with more confidence.

With Dec. 31 fast approaching, now is the time to review how to pay yourself in 2023.

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Let’s see how UPotential’s planning services can help you reach your potential.