Tax advantages of self-employed incorporation

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Tax advantages of self-employed incorporation

Post by wandersean » Thu Aug 30, 2018 3:39 pm

Hi all,

I understand that for a Canadian citizen living in Canada who works on a contract basis there can be significant advantages to incorporating and running the contracts through the corporation. As I understand it, the income is then taxed at the lower corporate rate going in, and the contracter/owner can then draw a reasonable-but-smaller salary as well as take dividends, and can smooth and stretch lumpy income out over several years. Perhaps I'm wrong here, please correct me if so.

My questions:

1) Is my understanding of the stated advantages correct?
2) Are there other advantages that I'm missing?
3) Are all of these advantages completely eliminated or negated for US/Canada dual citizens living and working in Canada?


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