Self-employed business owners can maximize Canada’s Child Tax Benefit through Incorporation.
In a situation where you may be self-employed, but not incorporated, and have a family, you may be missing out on thousands of dollars.
The Canada Child Tax Benefit (CCTB) is a monthly non-taxable amount paid to help eligible families with the cost of raising children under 18 years of age. You must be a Canadian permanent resident, live with the child, and be the primary caregiver for your child. Child tax benefits are calculated based on family income.
The benefit of incorporation, is that it permits you to put yourself on the payroll for a pre-determined amount. This will allow you to maximize your child tax benefits as a family.
It is true that incorporation has some costs, money, time, and effort to learn new rules. But going forward, the combined corporate tax rate in Ontario will be decreasing from 15.5% to 13.5%; it will help you protect your hard-earned assets in the event of any insolvency, or other unexpected events, such as being sued. So if those items were not enough to motivate you to incorporate your business, did I mention child tax benefits are going to remain tax-free going forward under liberals – Child Tax Benefits – Liberal Government