Please do quickly.
Janice Jones is the only shareholder of a Canadian controlled private corporation, Jones Ltd. The Company has a December 31 year end, and, at December 31, 2020, she determines that the Taxable income of the Company for the year will be $168,400, all active business income. The company has no GRIP balance at the beginning of 2020. The company is situated in Nova Scotia where the corporate tax rate for income eligible for the small business deduction is 3% Janice has no other source of income. In her tax bracket, assume the combined federal/provincial tax rate for individuals is 25 percent. In addition, for non-eligible dividends, the provincial dividend tax credit has been set at 30 percent of the dividend gross up. Ms. Stickle has combined personal tax credits for the 2020 taxation year in the amount of $3,950. Ms. Jones has come to you and would like to know the after-tax retention to her and the company under the following different options 1. Assume the company pays her a $40,000 salary? 2. Assume the company pays her a $40,000 dividend? 3. Assume the company pays her a $40,000 salary and pays the after-tax corporate retention to her in the form of a dividend? 4. Assume the company pays her no salary, and pays her a dividend equal to the after-tax retention in the company? Finally, she would like for you to determine the combination of salary and/or dividends that will produce the maximum after tax retention for Ms. Jones personally. Calculate the amount of this after-tax retention. Required Please provide Ms. Jones with the results under the 4 options she has presented and provide her the best combination of salary and/or dividends as she has requested. Janice Jones is the only shareholder of a Canadian controlled private corporation, Jones Ltd. The Company has a December 31 year end, and, at December 31, 2020, she determines that the Taxable income of the Company for the year will be $168,400, all active business income. The company has no GRIP balance at the beginning of 2020. The company is situated in Nova Scotia where the corporate tax rate for income eligible for the small business deduction is 3% Janice has no other source of income. In her tax bracket, assume the combined federal/provincial tax rate for individuals is 25 percent. In addition, for non-eligible dividends, the provincial dividend tax credit has been set at 30 percent of the dividend gross up. Ms. Stickle has combined personal tax credits for the 2020 taxation year in the amount of $3,950. Ms. Jones has come to you and would like to know the after-tax retention to her and the company under the following different options 1. Assume the company pays her a $40,000 salary? 2. Assume the company pays her a $40,000 dividend? 3. Assume the company pays her a $40,000 salary and pays the after-tax corporate retention to her in the form of a dividend? 4. Assume the company pays her no salary, and pays her a dividend equal to the after-tax retention in the company? Finally, she would like for you to determine the combination of salary and/or dividends that will produce the maximum after tax retention for Ms. Jones personally. Calculate the amount of this after-tax retention. Required Please provide Ms. Jones with the results under the 4 options she has presented and provide her the best combination of salary and/or dividends as she has requested
