Ostroff, Fair and Company
*Ostroff, Fair and Company>>>Canada Taxes

Accountants, can you please help?


I own a corporation. IT'S THE FIRST YEAR OF OPERATION. Y/E is December 31. There's money in the bank from profits. Can I pay myself a dividend NOW or do I have to wait after year end to pay myself dividends?

If you have a corporation you should get a designated accountant (CA, CMA, CGA) to help you.

(Dividends are not the way to go because of taxes.)
You can get payed now through dividends and pay the taxes at the closing of the fiscal year, but before you do that you have to do some calculations to determine your tax liability, you might end up paying more: the corporation pays on the dividend and then you pay on your personal income. Consider an alternative by paying your self through payroll the amount that you have in profits.
Dividends can be declared by the Board at any time, but they are not good, not what you want..... Don't pay dividends, but pay a salary, or pay Consulting Fees, or pay expense reimbursements, or pay Board of Director fees, but don't pay dividends! Please contact a CPA, they can save you mucho dollars..
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