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Originally Posted by Alex from Montreal
How is that? You get taxed twice when you incorporate: one as a corporation and the other for your personal income....
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good point, BUT....
the lower rate means you keep more after-tax dollars in your business in order to re-invest, etc. (say $82 out of $100, instead of $50 out of $100 dollars)
the time value of money.... I would rather pay taxes in 10 years than today.... as those dollars will be worth less in 10 years
with the corporation, you have the ability to draw the income out personally as you see fit. ie. if I was making $300K per year and took it all personally in one year.... I would pay 50%-ish tax on a large portion of it ($230K). However, if you kept this income in the company and paid it out personally beginning in 10 years when you are possibly no longer making this large amount of money.... you could pay out say, $30K per year (if you had NO other personal income) and only pay 20% taxes.