Today, we bring you another live episode, this time from the Annual Canadian Physician Financial Wellness Conference. We answer a series of compelling audience questions — drawing on information from past episodes — that meaningfully impact both sides of the client-advisor relationships. To kick things off, we break down the best time to incorporate, the downsides of incorporating too early, getting money out of your corporation tax efficiently, and common misconceptions around tax efficiency. Next, we discuss the changes in capital gains tax and if it still makes sense to incorporate despite the increase, whether you should pay debt or invest as you juggle all your different priorities, and when to take dividends versus salary. We also get into the topic of corporate bloat and how to address it through measures like smoothing out consumption, why you need to know your notional account balances, insights on dividend-paying ETFs, and advice for alternative investments, including real estate. To close, we discuss how you can determine when you’ve reached financial independence and how a professional financial planner can help you make that call, along with a few final audience questions. Join us to hear the full scope of today’s conversation on navigating the ins and outs of getting incorporated, tax efficiency, and much more!

Key Points From This Episode:

(0:00:31) An update on Money Scope and the tools we’ve been developing.

(0:03:32) Our first audience question: when should you incorporate?

(0:05:59) Getting money out of your corporation to pay off credit tax-efficiently.

(0:08:01) Common misconceptions around tax efficiency and tax deferrals.

(0:13:19) Unpacking if it’s still better to incorporate after the capital gains tax increase.

(0:16:03) A breakdown of whether you should pay off your debt or invest.

(0:20:19) The conditions under which you should take dividends versus salary.

(0:23:12) Insights on corporate bloat and methods for addressing it.

(0:32:14) How to come up with an optimal compensation strategy.

(0:36:50) What you need to ask your advisor or accountant about: notional account balances.

(0:39:01) Exploring whether there’s a role for dividend-paying ETFs during long-term investing within a corporate investment account.

(0:45:29) Reasonable alternatives to investing, other than ETFs, particularly when you reach the passive income limit.

(0:53:32) How you can tell when you’ve reached financial independence.

(0:59:08) Ways to approach optimal charitable giving throughout your life.

(01:01:02) The role of a family trust as a way for inheritance planning within a medical corporation.

Links From Today’s Episode:

Salary and Dividend Optimizer Calculator — https://www.looniedoctor.ca/ccpc-income-disperser/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://x.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Today’s episode comes to you live from the 22nd Institute for Advanced Financial (IAFP) Planning Conference in Gatineau, Quebec, recorded in front of an audience of professional financial planners. For this special episode, we cover key planning issues for incorporated business owners and walk through the lifecycle of a business owner or professional who eventually chooses to incorporate. We discuss crucial financial decisions they face along the way, particularly as corporate assets begin to grow, and wrap up with a Q&A covering topics like tax brackets, salary offsets, and more. Our conversation also tackles common misconceptions and explains strategies for income smoothing, tax deferral, and managing 'corporate bloat.' With today’s conference theme inspired by Star Wars, expect plenty of niche references along the way!

Key Points From This Episode:

(0:00:17) Introducing the topics that will be covered in today’s special live episode at the 22nd Institute for Advanced Financial Planning Conference in Gatineau, Quebec.

(0:03:57) Guidelines and benefits of becoming incorporated, including income smoothing.

(0:06:49) Advice for navigating taxes when becoming incorporated.

(0:08:42) Common misconceptions that people have regarding getting incorporated.

(0:13:53) How to capitalize on the benefits of tax deferral in a corporation.

(0:16:24) Key insights on tax integration and eligible dividends.

(0:20:07) Achieving optimal compensation and how it solves the problem of “corporate bloat.”

(0:25:08) Ways to treat and prevent corporate bloat.

(0:28:47) The math behind Mark and Ben’s optimal compensation algorithms.

(0:32:08) Advantages of planning over products for solving optimal compensation.

(0:35:10) Audience questions and answers, from tax brackets to Star Wars.

Links From Today’s Episode:

Institute for Advanced Financial Planning Conference — https://iafpsymposium.ca/
Salary and Dividend Optimizer Calculator — https://www.looniedoctor.ca/ccpc-income-disperser/
‘Dividends To Maximize Your Corporate & Personal Cash Flow’ — https://www.looniedoctor.ca/2023/06/30/pay-dividends-corporation/#algorithm

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://x.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/