Today I welcome Aravind Sithamparapillai (MBA), who is an associate at Ironwood Wealth Management. Aravind is becoming known as a tax ninja - he breaks down complex topics nicely for listeners of all levels.
While the focus of this episode is meant to be CPP (Canada Pension Plan) & its relevance to business owners, we cover a lot of ground that includes salary vs dividends & tax basics.
Discussion Points:
Aravind's background (4:18)
The basics of tax integration (5:00)
Tax integration by province/territory (6:42)
Tax credit & deduction on the employee portion of CPP (9:16)
Employer portion of CPP - tax deductible (14:13)
What is the true cost of CPP? (16:30)
Understanding the dividend gross up & dividend tax credit (22:05)
Income based benefits that can be impacted by the dividend gross up (26:15)
CPP vs investing yourself in the corporation (31:13)
Salary + dividend vs salary only approach (39:10)
What about the IPP (41:35)
Other CPP benefits - disability, children, survivor (43:30)
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