01/16/2026
When it comes to tax planning, things aren't always as simple as they may seem on the surface.
Working a file for a client. The corporation sold a property resulting in a capital dividend account balance. The simple plan would be to maximize the capital dividend, which in this case along with a due to shareholder balance would empty the corporate bank account. Great we think!
However, as the owners are now in a low tax bracket and are seniors, paying out taxable dividends result in a refundable tax refund in the corporation that's about double the additional personal tax. The client's income is low enough to avoid OAS clawback but still result in an additional 5 digits in their pockets instead of CRA's. We can repeat in the 2026 calendar year doubling the net tax savings.
It's critical to always look at the whole picture and take the time to consider the options!
