How the wealthy reduce the tax-man’s take
The Globe and Mail, Joel Schlesinger
The math is simple. The more money you make, the more taxes you pay.
Among the manoeuvres under review is “income sprinkling,” whereby earnings from the corporation are split among the business owner, a spouse and adult children to reduce the overall tax burden.
One advantage that will remain in place, however, is the Individual Pension Plan (IPP). “Contributions are deductible by the operating company, and income accumulates tax-free in the plan until benefits are paid to the owner as pension income,” says Cynthia Kett, an accountant and financial advisor with Stewart & Kett Financial Advisors in Toronto. Also, its income is eligible for income splitting.