Incorporated Realtor - 6 month bank statement approach ( 6 month Revenue - Expenses) * 2 = Qualifying income
Are you a realtor, and you are frustrated that you can't get your mortgage approved although you are making a great living?
I recently helped my client with stated income program. You will be able to reduce your tax bill significantly if you work with "the true expert".
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Business owners, Incorporated realtors - Please take some time to read my post throughly.
If you are making $200K and above per year, you would be better off incorporating a business so that you can reduce your tax bill significantly.
Why? If you do not need to pay yourself from your corporation, you do not need to pay 40~50% taxes on personal income.
I am not an accountant, this calc is for illustration only.
$250K revenue
8% corp tax
$20K Corp tax to CRA
$230K Corp income after taxes (I did not include net income after expenses to simplify the calc)
Let's say you are paying 40% tax on 230K on the personal side
$92K to CRA * 2 years (Banks require 2 years of personal tax filing) = $184K + CRA Corp tax ($20K per year) 40K
= $224K to CRA for 2 years
If you park your money in the corp (only if you do not need to pay yourself)
$40K corp tax for the next 2 years
= 224K - 40K = $184K your saving.
Again, this is for illustration only, and I am not an accountant.
Of course, you need to pay yourself, however, you do not need to if you don't have to! Save yourself $$$$. B lending can be a great option for business owners, just like you!
Just pay corp tax, park your money in your corp.
You can always pay yourself from your corp whenever you need it.
JD Lee
Mortgage Broker
M: 1-587-968-1490
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