Vancouver, BC -- (ReleaseWire) -- 04/01/2024 --As a team of Chartered Professional Accountants in Vancouver, Mew and Company offers small business incorporation tax services for companies on the grow.

Taxes have always been a big-ticket expense item for businesses; a 15% reduction is a considerable discount. However, small business owners must carefully consider whether incorporation is an option. Anticipated corporate tax reductions only benefit businesses that can leverage them.

Successful proprietors are often burdened with personal tax bills that are almost always higher than anticipated. This is because in BC, the personal tax rate is 40.7% for taxable income above $127,300 and this rate peaks at 53.30% for all taxable income above $1240,171. Employer and employee portions of CPP premiums also need to be paid, which max out at $7,735 for 2024.

As burdensome as personal tax rates can be, the benefits of incorporating must be carefully considered, even given the lower corporate tax rates. Regardless of the corporate tax rate (currently 11%), businesses must be profitable enough to reap the benefits of a lowering corporate tax rate.

What does profitable mean in this context? A rough calculation is that at least $50,000 should be retained in the corporation after the owner has paid for all business expenses AND all personal expenses (including clothes, mortgage, school tuition, social club membership, vacations, etc.).

Standard prerequisites to consider incorporation

Despite the very low corporate tax rate for Canadian-controlled private corporations, the prerequisites to consider incorporation have not changed: high profitability and the need to shelter retained earnings. It is also worth noting that certain types of businesses need incorporation to shelter against litigation so tax planning would not be the primary consideration in these cases.

Additionally, suppose the business operates in a city like Vancouver with high rents and operating costs. In that case, one must remember that the bar where incorporation makes sense is generally set much higher than average.

As a team of Chartered Professional Accountants, the team at Mew and Company offers small business incorporation accounting services in Vancouver. By working with small business owners, accountants can advise on the best time to discuss strategies to minimize tax burden while ensuring all tax requirements for Canadian businesses are met.

Call 604-688-9198 to learn more about small business incorporation accounting services in Vancouver.

About Mew + Company, Vancouver
Mew + Company, Vancouver, is an ideal solution to the taxation problem. With a simple philosophy of building long-lasting customer relationships, the company has been serving corporate clients in a variety of fields—including restaurants, real estate, retail, and the service industry. Investing in their specialist services will undoubtedly be fruitful for all kinds of clients.

To learn more about Mew + Company and discuss their services, go to website https://mewco.ca/

Lilly Woo, CPA, CA, CFE
Mew + Company Chartered Professional Accountants
604-688-9198