Incorporated Professional Accounting Calgary: Tax for Professional Corporations
CPA services for Calgary's incorporated professionals, lawyers, engineers, and consultants. Salary-versus-dividend planning, income splitting, the small business deduction, and retirement strategies.
Industry-Specific Accounting for Professional Corporation Accounting
For lawyers, engineers, consultants, IT contractors, and other professionals, incorporating is one of the most powerful tax tools available, but only when it is managed well. A professional corporation opens the door to the low Alberta small business tax rate, tax deferral on retained earnings, and flexible compensation, yet it also brings rules around income splitting, passive investment income, and remuneration that trip up owners without the right advice.
Finsight Accounting works with Calgary's incorporated professionals to get the structure and the strategy right. We prepare your T2 corporate return, plan the optimal mix of salary and dividends, keep you onside with the tax-on-split-income rules, and build a long-term plan for the earnings that accumulate inside your corporation.
Key Tax & Accounting Issues for Professional Corporation Accounting
Salary vs Dividend Planning
The mix of salary and dividends you draw from your professional corporation affects your personal tax, CPP contributions, and RRSP room. The optimal blend changes with your income and goals, and we model it each year rather than defaulting to one approach.
Tax on Split Income (TOSI)
Since 2018, paying dividends to family members is restricted by the tax-on-split-income rules. We assess which family members meet an exclusion, such as the reasonable-labour or excluded-shares tests, so any income splitting is done correctly.
Small Business Deduction & Passive Income
Your first $500,000 of active income is taxed at the low 11% Alberta rate, but passive investment income over $50,000 inside the corporation grinds down that deduction. We manage corporate investments to protect your small business rate.
Tax Deferral on Retained Earnings
Income you leave in the corporation is taxed at roughly 11% rather than your personal marginal rate, freeing up more capital to invest or reinvest. We help you decide how much to draw personally and how much to retain and defer.
Health Spending Accounts & Benefits
A Private Health Services Plan lets your corporation deduct medical and dental costs that would otherwise be paid with after-tax dollars. We set up and administer tax-efficient benefits for owner-managed professional corporations.
Our Services for Professional Corporation Accounting
Corporate Tax (T2)
T2 returns, small business deduction planning, and remuneration strategy for Calgary professional corporations.
Explore Corporate Tax (T2)Personal Tax (T1)
Owner-manager T1 returns coordinated with your corporate salary-and-dividend plan.
Explore Personal Tax (T1)Bookkeeping
Monthly bookkeeping and financial statements for incorporated professionals and their holding companies.
Explore BookkeepingProfessional Corporation Accounting: Frequently Asked Questions
Disclaimer: Industry-specific information on this page is general guidance only and reflects tax rules current at time of writing. It is not professional advice and does not create a CPA-client relationship. Consult a licensed CPA for advice specific to your business.
Related Industry Pages
Calgary Accounting for Incorporated Professionals
Experienced tax planning for your professional corporation from a Calgary CPA. Get in touch.