Tuesday, 8 January 2013

Compare Tax on Self-employment Income against Employmnent Income.

As an owner of a corporation you have the flexibility to receive income from the corporation in the form of employment income, dividends or - under certain conditions - self employment income. There is one clear advantage in receiving some employment income and taht is to take advantage of the employment tax credit.  The employment tax credit is a non-refundable tax credit which is based on the amount of employment income you receive to a maximum of $1095 which translates to a maximum of $164 non-refundable tax credit which is deductible from your tax.  So give yourself at least $1,095 employment income to save $164 of taxes. There are other differences which I will discuss in a future blog.

Get more tax information and Q&A letters from our website www.tavana.ca

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