Attention all Corporation Owners and Shareholders! There are some fairly major changes being made in the 2014 Federal Budget which WILL affect anyone receiving ineligible dividends from their corporations. This will affect shareholders on the personal tax level starting in 2014. For most individuals, you will find that the personal taxes owing on ineligible dividends received will be higher than previous years. They generally will still come out to being lower than if you were an employee taking a salary, however, the government seems to be closing the gap a bit. The 2013 rates for 2013 personal taxes are the same as they have been for many years.
You should take this time to review your dividends plan by the end of November and figure out if you should be claiming more dividends in 2013 and then taking less in 2014. You have until December 31st to decide what you plan to do.
More information from Canada Revenue Agency can be found here: http://www.cra-arc.gc.ca/gncy/bdgt/2013/qa04-eng.html.
For further information please contact us and we can discuss your specific situation with you to determine how much of an effect this change might have for you, your family and your business.