Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wanda Ho has annual employment income in excess of $300,000. Because of this, any additional income that she receives will be subject to a combined

Wanda Ho has annual employment income in excess of $300,000. Because of this, any additional income that she receives will be subject to a combined federal/provincial tax rate of 51%. Several years ago, she began to carry on a business as a sole proprietor. She anticipates business income of $142,000 for the 2021 taxation year. In her province of residence: the corporate income tax rate is 2.5% on income eligible for the small business deduction and 13% on other corporate income the dividend tax credit is 20% of the dividend gross up for non-eligible dividends and 30% for eligible dividends Required i) Ms. Ho has asked your advice as to whether she should incorporate the business. Advise her with respect to any tax deferral that will be available on income retained by the corporation and on any tax savings that will be available if all of the after-tax income is distributed as taxable dividends. ii) List Five advantages of incorporating her business

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Financial Reporting With Powerpivot

Authors: Florent Cailly, Thomas Brajcich

1st Edition

1517437563, 978-1517437565

More Books

Students also viewed these Accounting questions

Question

Verify the first Absorption Law by means of a truth table.

Answered: 1 week ago