Incorporation

[rad86]

For those who are in practice already:

 

How soon after finishing residency did you incorporate? For people who are doing locum initially (i.e. a GP working in a walk-in clinic) before settling for a permanent position, did it make sense to incorporate then?

 

Anyone had any experience moving between provinces, e.g. Ontario to BC? How did it affect your corporation - did you transfer it or close the old one and set up a new one? If there're 3 years before the move, would it still make sense to incorporate first?

 

I know the detailed are probably better discussed with an accountant, but I just want to see if anyone had first-hand experiences or any insights to share.

[moo]

Incorporated after 1 year.

[JewelLeigh]

I incorporated immediately.

 

It makes sense to incorporate once you have one of two things:

-Someone to income split with (i.e. a non-working spouse)

-More money coming in than you need to spend (i.e. money to leave in the corporation that you don't need to draw out)

 

Corporations are basically a tax-reducing strategy. Rather than pay tax at your highest bracket as you would if you weren't incorporated, you can pay tax at lower brackets by either dividending money out to a lower-income/no-income spouse or by saving within the corporation and paying yourself at a later date when you are no longer in a high tax bracket (i.e. on a mat leave or during retirement). Thus if you have no way of taking advantage of these major advantages, then the other, smaller, advantages of incorporation are not likely to be worth it.

 

I was able to take advantage of both of these strategies and am saving myself a large amount of money.

[FamilyGuy]

Speak to your accountant about your particular situation. For me, I have incorporated from day 1, precisely for tax deferral.

[cheech10]

Right away after residency.