Quoted from Duke

Hey steph this from my ca
Yes, because of the fancy mechanics behind dividends, you can receive probably appx. $36,000 without paying income tax  - assuming no other income.

Thanks, that's good info to have.

Quoted from Duke

Dividends are not deductible to corporations - therefore the corporation pays the tax, instead of the individual.  If the corporation qualifies, the rate of tax for a corp. is around 16.5% right now.

Agreed.
"My" corporation will have to pay 16% tax before any dividend can be paid out.

Quoted from Duke

The cons of dividends to recipients:

--they don't go towards CPP

--they don't generate any RRSP room, as they're not considered earned income

As sole proprietor , I can not claim EI or CPP anyways.

And yes, I can not increase my RRSP room, that's fair.
If I want to do that, I can pay myself a salary instead and then top up my RRSP.
...unfortunately my cash-flow isn't high enough for me to consider RRSP contributions ..


Thanks for the great info.

Cheers,
Steph

current corp.rates...


http://www.kpmg.ca/en/services.....%202nd%20Q_Final.pdf

Quoted from shoeguy

current corp.rates...


http://www.kpmg.ca/en/services.....%202nd%20Q_Final.pdf

So that confirms it...

11% Federal Tax +  5.5% Ontario Tax  = 16.5%  Total Corporate Tax
( ... as Wayne [Duke] pointed out  )


Thanks guys.

Steph