Stay Ahead with Smart, Strategic Moves This Year
Whether you’re just wrapping up residency or have been in private practice for years, 2026 is the perfect time to take a fresh look at your financial plan, tax strategy, and corporate structure.
Canadian tax rules are always evolving, and physicians face unique planning opportunities — and risks — if things are left unchecked.
Here’s your physician-friendly checklist to stay on top of your finances heading into 2026.
- Review Your Salary vs. Dividends Mix
If you’re incorporated, now’s the time to review how you’re paying yourself. Consider:
- Salary to create RRSP room and contribute to the CPP
- Dividends for lower upfront taxes and administrative simplicity
A custom mix may optimize tax efficiency — especially with the small business deduction limit staying at $500,000 federally.
- Maximize RRSP and TFSA Contributions
For 2026:
- RRSP limit: Up to $33,810 (if earned income allows)
- TFSA limit: Now $7,000 per year, with cumulative room over $100,000 if unused since inception
These remain core tools for long-term, tax-sheltered wealth accumulation — especially when coordinated with corporate savings.
- Plan for the Passive Income Grind
If your medical corporation is investing through retained earnings, keep an eye on the $50,000 passive income threshold. Go above it, and you risk losing access to the small business tax rate.
Consider tax strategies like:
- Flowing funds to a holding company
- Reassessing investment types (e.g., corporate-class funds, life insurance strategies)
- Exploring active business investments through your holdco
- Review Lifetime Capital Gains Exemption (LCGE) Strategy
For doctors who may sell shares in a clinic, group practice, or related business in the future, the LCGE is a powerful tool — with a 2026 exemption limit over $1 million.
Planning now (e.g., via a family trust or purification steps) could preserve access to this valuable tax exemption later.
- Check Your CPP and EI Contributions
If you draw a salary through your MPC, the 2026 max CPP contribution is rising again. Make sure you’re not overpaying — especially if you’re also employed elsewhere or have staff on payroll.
Also, confirm if you should opt in or out of EI — physicians often skip it, but some planning cases (like parental leave) may warrant reconsideration.
- Revisit Insurance, IPPs, and Retirement Planning
As cash builds inside your corporation, are you exploring all your options?
- Individual Pension Plans (IPPs) for enhanced retirement contributions
- Corporate-owned life insurance as a tax-efficient estate planning tool
- Critical illness or disability coverage updated to your income level
- Talk to a Specialist Who Knows Physician Tax
Generic tax planning doesn’t cut it. Your income structure, practice setup, and goals are specific — and your strategy should be too.
At MedTax, we help incorporated doctors across Canada (excluding Quebec) with tailored, smart planning that’s aligned with CRA rules and built for real results.
