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Dividend Planning​

January 26, 2016

Tax Question:

When and why should I book a dividend planning meeting with my accountant?


Mid-winter is a great time to book a dividend planning meeting with your accountant. The purpose of this meeting is to review your anticipated personal income for the year and the position of your shareholder loan account to determine how to plan your dividends or annual bonus to optimize your personal tax position.


Corporate owners have the option of receiving their income through salary and/or dividends. This can provide you with excellent opportunities to income split if you and your spouse or other family members own shares in the company and the opportunity to optimize your personal tax position by ensuring you can utilize all your personal tax credits such as donations and tuition.

Meeting with your accountant can alert you to issues with your shareholder loan account that need to be addressed. For example, you may be unaware that you have spent corporate money personally and now owe your company money. Your accountant can advise you when this shareholder loan must be repaid by to avoid having to declare it as personal income (a dividend). Your accountant can run tax planning scenarios for you to determine how much tax you would owe if you received $XX in dividends and how much your spouse should receive to optimize your joint tax position. Your accountant can also run tax planning scenarios for you to determine if it would be beneficial to declare a bonus to yourself and contribute this to your RRSP and if so how much of a bonus?

A dividend planning meeting with your accountant will help you optimize your tax position and avoid unpleasant surprises during tax season.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.

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