Tax Free Dividend

About the Author: Wilson Wong & Associates, are Chartered Accountants in Calgary providing tax and accounting services to small and medium sized businesses and high networth individuals.

You probably know about the federal basic exemption amount of $11K that each individual may earn without paying income tax. Did you know that the exemption amount is magically higher when the income earned is dividend?

Assuming you earn no other source of income, if you are earning stock portfolio dividends then your tax free maximum is anywhere between $40,000 to $50,000 depending on which province you're in. If you are paying yourself dividends from a small business corporation you own then that tax free maximum is anywhere between $20,000 to $32,000 also depending on the province and a number of other factors.

We calculate the optimal amount of dividends for our corporate clients and retirees all the time. There are many factors to take into account when calculating the best amount for you. It's not something you should calculate on your own, give me a call and let me work it out for you.

-Wilson Wong, CA

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