Insurance Taxation: One of the most attractive features of life insurance death benefit payout (under most circumstances) is the tax-free mortality gain. As per the Federal Income Tax Act, tax-free dollars will be paid out to the beneficiary of the life insurance policy in the amount of the policy death benefit.
Deductions/Credits: Proper use of deductions, maximizing what is available as well as the amount allowed by the government. Similarly, credits are also an effective way of receiving back from the government. If you have further inquiries on any credits and deductions that may apply to you, consult your accountant for more detailed information.
Lifetime exemption (for businesses): The government allows a lifetime capital gains exemption for certain situations, up to a lifetime maximum, provided it was not previously applied to other amounts.
CDA accounts: This notional account is available to private corporations; this allows the opportunity of funds to flow form the corporation to the shareholder tax-free, under certain circumstances.
Minimizing tax burdens: An important part of minimizing the tax burden is the use of tax credits and deductions. Where necessary, tax splitting strategies may be useful with your spouse.
Family income splitting: Splitting certain tax burdens with your spouse may be an efficient way of minimizing taxes within a family operated business. Consult an accountant on this topic.
Dividends vs. Salary: Many small business corporations have principal shareholders that are also active employees. Business owners must decide whether to take compensation as dividends or salary. An accountant should advise which method best suits your specific business and income structure.
**Speak to an accountant or tax specialist about these tax topics.