Salary Vs. Dividend Decisions - Optimum Mix Ms. Barbra Stickle is the only shareholder of Stickle Ltd., a Canadian controlled private corporation. The Company has a December 31 year end and, at December 31, 2016, Ms. Stickle determines that the Taxable Income of the Company for the year will be $24,200. The Company has this amount available in cash, prior to the payment of taxes, dividends, or salary All of the Company's income qualifies as active business income and any dividends that it pays will be non-eligible. The Company's activities are confined to a province in which the applicable corporate rate of taxation is 3.5 percent on income eligible for the small business deduction. The province does not levy a payroll tax. Ms. Stickle has no other source of income. In her tax bracket, the combined federal/provincial tax rate for individuals is 25 percent. 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 2016 taxation year in the amount of $3,423. Required: A. Determine the after tax amount of cash that Ms. Stickle will retain if all of the Company's income is B. Determine the after tax amount of cash that Ms. Stickle will retain if the Company pays the maximum C. Can Ms. Stickle improve her after tax cash retention by using a combination of salary and D. Determine the combination of salary and/or dividends that will produce the maximum after tax cash E. Briefly describe any other factors that Ms. Stickle should consider in deciding whether to pay herself paid to her in the form of salary. Ignore CPP contributions and the Canada employment tax credit. possible dividend. dividends? Explain your conclusion retention for Ms. Stickle. Calculate the amount of this after tax cash retention. dividends or, alternatively, salary Salary Vs. Dividend Decisions - Optimum Mix Ms. Barbra Stickle is the only shareholder of Stickle Ltd., a Canadian controlled private corporation. The Company has a December 31 year end and, at December 31, 2016, Ms. Stickle determines that the Taxable Income of the Company for the year will be $24,200. The Company has this amount available in cash, prior to the payment of taxes, dividends, or salary All of the Company's income qualifies as active business income and any dividends that it pays will be non-eligible. The Company's activities are confined to a province in which the applicable corporate rate of taxation is 3.5 percent on income eligible for the small business deduction. The province does not levy a payroll tax. Ms. Stickle has no other source of income. In her tax bracket, the combined federal/provincial tax rate for individuals is 25 percent. 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 2016 taxation year in the amount of $3,423. Required: A. Determine the after tax amount of cash that Ms. Stickle will retain if all of the Company's income is B. Determine the after tax amount of cash that Ms. Stickle will retain if the Company pays the maximum C. Can Ms. Stickle improve her after tax cash retention by using a combination of salary and D. Determine the combination of salary and/or dividends that will produce the maximum after tax cash E. Briefly describe any other factors that Ms. Stickle should consider in deciding whether to pay herself paid to her in the form of salary. Ignore CPP contributions and the Canada employment tax credit. possible dividend. dividends? Explain your conclusion retention for Ms. Stickle. Calculate the amount of this after tax cash retention. dividends or, alternatively, salary