Joan Barts owns all of the outstanding shares of Barts Ltd., a CCPC that is carrying on an active business. She would prefer to pay herself salary instead of dividends if:

Question

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If the corporation has Taxable Income in excess of $500,000, it will be subject to the high federal and provincial corporate tax rates. By paying herself a salary, Joan can reduce the corporation's taxable income, thereby reducing the overall corporate tax liability. Additionally, paying a salary allows Joan to accumulate RRSP contribution room, receive CPP and EI benefits, and potentially contribute to a pension plan.

Joan Barts Owns All of the Outstanding Shares of Barts