As a physician, you’re probably familiar with the option of incorporating your practice.
Incorporation is the process of creating a distinct legal entity to become the owner of your practice, separating the ownership from yourself. You are then paid out by this entity, either as an employee or a shareholder, in the form of a salary, dividends, or bonuses.
Incorporation depends on many personal factors and should be considered on a case-by-case basis. As a general rule of thumb, incorporation is favourable if the advantages are greater than costs associated with the incorporation process. The main reason why physicians choose to incorporate is to benefit from the tax advantages that a corporation is entitled to, under Canada’s Income Tax Act. In addition to lower tax rates, other tax advantages include tax deferrals, lifetime capital gains exemption, and income splitting opportunities.
There’s a lot to consider when deciding whether or not incorporating a medical practice is right for a physician. At MedTax.ca, our financial experts work with physicians to carefully evaluate their specific situation, to determine and implement the best tax structure for their long-term goals. If incorporation is right for a medical professional, we’ll help guide them through the process, and have their corporation up and running in 21 days flat.
Have more questions on how we are able to incorporate? Give us a call at (905) 815-6559. We’d be happy to help!