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Accounting for incorporated professionals

Consultants, realtors and PRECs, therapists, and other regulated professionals. Different licences, same core questions about how to hold the business and how to pay yourself.
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The problem

You incorporated and nobody modelled it

Incorporation gets set up by a lawyer or an online service, and the tax planning that justifies it never happens. The structure exists. The benefit doesn’t.

Salary versus dividends is an annual decision

It’s not settled once at incorporation. It moves with your income, your RRSP room, your CPP position, and your household. Treating it as a one-time choice leaves money on the table most years.

Retained earnings need somewhere to go

Once profit builds up in the corporation, the passive investment rules matter. Investment income above certain levels reduces access to the small business rate, which surprises people who did well.

What I do

  • Annual salary versus dividend modelling, run properly rather than assumed
  • Corporate year-end, T2, and financial statements
  • Personal return, coordinated with the corporate side rather than filed in isolation
  • GST/HST registration and filing
  • Passive investment income monitoring, before it affects your small business limit
  • Income splitting review within the TOSI rules, which are far narrower than they were
  • Incorporation analysis if you're not incorporated yet, including whether it's actually worth it

What's different

The salary and dividend question is where most of the value sits, and it’s the thing most commonly done by rule of thumb. I model it against your actual numbers each year, including your spouse’s position, because that’s where the answer usually changes.

For realtors and PRECs, I understand how commission income and brokerage arrangements flow. What I don’t do is your RECO or TRESA compliance, brokerage agreement obligations, or trust account audits. Same for other regulated professions. Your college or regulator’s requirements stay yours.

Questions

I'm not incorporated yet. Should I be?
Depends on how much you’re leaving in the business. If you’re spending everything you earn, incorporation mostly adds cost. If you’re not, the deferral starts to matter.
Yes, and you want the same person doing both. The corporate and personal decisions are the same decision.
Sometimes, within the TOSI rules. It depends on their actual involvement and the structure. It’s much more constrained than it was before 2018, and getting it wrong is expensive.
Yes, across Canada except Quebec. Note that professional incorporation rules vary by province and by regulator.
Mark Garcia, CPA · Kitchener-Waterloo, Ontario · Serving clients across Canada outside Quebec · CRA authorized representative