Decision-support only. Not legal or tax advice.
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Incorporation creates a legally distinct entity separate from its owners. Under federal (CBCA) or Ontario provincial law (BCA), the corporation can own property, enter contracts, and incur debt independently. Key benefits: limited liability, Small Business Deduction (SBD), income splitting, perpetual existence.
As a solopreneur you report business income on your personal T1 return — all profit is taxed at personal marginal rates (up to ~53%). With a corporation, active business income is taxed at ~12.2% (Ontario SBD rate) and you control when you extract money, deferring personal tax until you need it.
| Salary | Dividends | |
|---|---|---|
| Corporate deduction | Yes — reduces corp income | No — paid from after-tax income |
| CPP contributions | ~11% combined | None |
| RRSP room | Creates 18% room | No RRSP room |
| Personal tax | Regular income rates | Eligible dividend tax credit |
| Income Range | Combined Fed+ON Rate | Entity |
|---|---|---|
| $0 – $51,446 | ~20.1% | Personal |
| $51,446 – $55,867 | ~24.2% | Personal |
| $55,867 – $102,894 | ~29.7% | Personal |
| $102,894 – $111,733 | ~34.0% | Personal |
| $111,733 – $150,000 | ~43.4% | Personal |
| $150,000 – $220,000 | ~47.0% | Personal |
| Above $220,000 | ~53.5% | Personal |
| Corp — SBD (≤$500k active) | ~12.2% | Corporation |
| Corp — General rate | ~26.5% | Corporation |
Mandatory registration when taxable supplies exceed $30,000 in any rolling 12-month period. Ontario HST = 13% (5% GST + 8% PST component). Input Tax Credits (ITCs) recover HST paid on business expenses.
If you owe more than $3,000 in personal tax in the current year AND either of the two previous years, CRA requires quarterly instalments (March 15, June 15, Sep 15, Dec 15). This system estimates your instalments automatically.
Upload your prior-year T1 return or NOA — Claude will analyze it and give recommendations for the current year. Requires an Anthropic API key (set via 🔑 button in top bar).
Includes all income, expenses, mileage, home office, HST summary, and tax estimate
Subscription, SaaS, and product revenue. No client tracking — that lives in Solopreneur. Taxed at corporate rates.
All corporate documents in one place — T2 returns, HST filings, shareholder agreements, minute book entries. Upload for AI analysis.