Announcement

Collapse
No announcement yet.

Deferring Business Income

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Deferring Business Income

    I pay offset CS (only) on a professional income. I have paid for years and never missed a payment.



    Work is slow lately and I have the opportunity to start an incorporated side business. I may or may not need the income from the side business. If I do take income from the company as salary or dividend, I know I'll pay support on it based on my line 15000.


    Is there any issue with me leaving money in the company? I have always paid table amount CS which has varied up and down, mostly up. I'm not doing it to avoid obligations, but I'd prefer to leave income in the company to grow that venture.

  • #2
    Retained earnings can be 'imputed' to you as income for support. The question is whether the earnings need to be retained for a bona fide business purpose.

    A vague plan to 'grow the company' probably isn't enough. But if you have plan to grow the company that involve future expenditures where retention is necessary, it could be justified.

    Depending on the amount being retained this can be a major area of disagreement in court cases.

    Comment


    • #3
      OK that's a good explanation. Thank you.

      Comment


      • #4
        I have had clients who were required to produce their corporate financial & tax information re: ongoing support obligations & "actual" income vs what was reported and assessed on the T1 return.

        Comment


        • #5
          Yes, I can imagine that could happen. It's probably not worth it to take the initiative of earning income beyond my full time jobs normal salary. Thanks for the example.

          Comment


          • #6
            You may need extra money, but don't think it's worth paying support on. You really are putting yourself first. If you make an additional 20k, you may have to pay about 2k in support. It's worth it for you and your kids.

            Comment

            Our Divorce Forums
            Forums dedicated to helping people all across Canada get through the separation and divorce process, with discussions about legal issues, parenting issues, financial issues and more.
            Working...
            X