Corporations:
Corporations are a separate legal entity. By law each corporation must file its own tax return every year.
You can pay wages to yourself out of Corporation and report on your personal tax return. This will be treated as an expense to Corporation.
Corporations can provide you minimum liability. Corporations can have their own debts that are not obligations of shareholders.
Corporations can provide big tax savings if proper tax planning is done.
Corporations have lot more regulations requirements in comparison to sole proprietorships and partnerships.
Incorporating a business can cost quite a bit of money.
Cost of filing Corporation taxes is higher than filing simple returns.
Losses in sole proprietorship or partnerships can be offset against your other sources of income.
Losses in Corporations will stay in Corporations that can be carried back three years or carried forward seven years. Sometimes losses can be carried forward ten or twenty years depending on the year in which the loss occurred.
A combination of salary and dividend can bring very god tax saving.
Selling shares of your Corporation can provide capital gain exemption up to $750,000 if you have more than one shareholder in the company, each share holder can enjoy $750,000 capital gain exemption on sale of his / her share.
