Corporate Tax Planning for Doctors
Medicine professional corporation strategy, salary-dividend optimization, RRSP vs IPP, income splitting, SBD threshold management, holding companies and retirement planning built specifically for Canadian physicians. From $400.
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Physician Clients
Most Doctors Overpay Tax by $20,000+ a Year
A physician billing $400,000 through a medicine professional corporation has more tax planning leverage than almost any other profession in Canada. Yet most doctors leave that leverage unused. The salary-dividend mix is never modelled. The choice between RRSP and an Individual Pension Plan is never evaluated. Retained earnings sit in the corporation losing access to the small business deduction because passive income crossed $50,000. Family members who could hold shares and split income never do. Every one of these gaps costs five figures annually, and the worst part is that the planning window closes the moment your fiscal year ends.
We provide corporate tax planning for doctors across Ontario and Canada. Medicine professional corporation strategy, salary-dividend optimization, RRSP vs IPP, income splitting, SBD threshold management, holding company evaluation and retirement planning. From $400. AFFORDABLE flat fees.
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Tax Planning Services for Physician Corporations
Year-End Tax Strategy
Pre-year-end review 60 days out. Bonus declaration, RRSP timing, income deferral.
Salary-Dividend Optimization
RRSP room, CPP savings, marginal rate modelling. Updated every year.
RRSP vs IPP Analysis
Individual Pension Plan evaluation for physicians over 40 with consistent income.
Income Splitting
Family shareholders, TOSI rules, spousal dividends, prescribed rate loans.
SBD Threshold Management
Keep active income under $500,000. Passive income $50K limit monitored.
Holding Company & Retirement
Investment portfolio inside the corp, asset protection, LCGE, retirement drawdown.
How We Plan Corporate Tax for Physicians
A proactive 6-step planning process. Not reactive. Not at year-end. AFFORDABLE flat fees.
60-Day Pre-Year-End Review
Tax planning after year-end is not planning. It is damage control.
- Year-to-date OHIP and billing income projected 60 days before fiscal year-end.
- Projected corporate taxable income calculated after salary, expenses and deductions.
- SBD threshold check: will active income exceed $500,000? Bonus or salary modelled.
- RRSP and IPP contribution room reviewed before the deadline window closes.
- Equipment, technology and CME purchases timed for current-year deduction.
Salary-Dividend Optimization for Physicians
At $300K to $600K income, the salary-dividend mix moves the needle by five figures.
- Salary set to create maximum RRSP room (approximately $180,500 salary for $32,490 room).
- Dividend top-up to save CPP: $4,056/year at maximum pensionable earnings.
- Marginal personal rate modelled against corporate retention at 12.2%.
- Year-end bonus to manage SBD threshold and smooth income across years.
- Eligible vs non-eligible dividend mix optimized based on the corporation's tax pools.
RRSP vs IPP Analysis
For physicians over 40, an Individual Pension Plan often beats RRSP alone.
- IPP allows larger tax-deductible contributions than RRSP for older, higher-income physicians.
- The corporation funds the IPP and deducts contributions, reducing corporate tax.
- Past service contributions can be funded for prior years of incorporation.
- Investment growth shortfalls can be topped up by the corporation (additional deductions).
- We model RRSP vs IPP side by side with your actual age and income.
Income Splitting with Family
TOSI restricted income splitting but did not eliminate it. Done correctly, it still works.
- Spouse over 65: dividends may be split under the excluded amount rules.
- Adult family members actively working in the practice: reasonable salary or dividends.
- Prescribed rate loans to a family trust to split investment income.
- Spousal RRSP contributions to equalize retirement income.
- TOSI reasonableness tests documented to support every income split.
Passive Income and Investment Strategy
Retained earnings invested inside the corporation can quietly destroy your SBD.
- Passive investment income over $50,000 reduces the SBD by $5 for every $1 over.
- At $150,000 passive income, the small business deduction is eliminated entirely.
- Holding company structure to separate the investment portfolio from active income.
- Tax-efficient investment selection: capital gains and eligible dividends vs interest.
- Corporate-owned life insurance evaluated for tax-sheltered growth where appropriate.
Holding Company and Retirement Drawdown
The structure you build today determines how much tax you pay when you retire.
- Holding company to receive surplus earnings and hold the investment portfolio.
- Asset protection: investments insulated from professional liability in the operating MPC.
- Retirement drawdown plan: dividends timed to fill low-income years tax-efficiently.
- Estate planning: shares structured to minimize tax on death and probate.
- LCGE evaluation if practice assets or shares may be sold.
Free Physician Tax Planning Consultation
Free Physician Tax Planning Consultation
Case Studies: Physician Tax Planning
Family Physician, Toronto ($420K OHIP Billings)
Solo family doctor paying all income as salary. No RRSP strategy, no dividend planning. We restructured: $180K salary (max RRSP room) + $140K eligible dividend. RRSP contribution at the 48% marginal rate saved $15,595 in tax. Dividend portion reduced CPP. Year-end bonus kept income under SBD. Annual savings: $18,900. Get Started →
Specialist Surgeon, Mississauga ($680K Billings)
Surgeon age 52 with consistent high income, contributing only to RRSP. We modelled an Individual Pension Plan. The IPP allowed $48,000 in deductible contributions vs $32,490 RRSP, plus a past-service buyback funded by the corporation. First-year corporate deduction increase: $61,000. Tax saved Year 1: $16,165. Tax Planning →
Walk-In Clinic Physician, Markham ($510K Billings)
Income $510K, just over the SBD threshold, with $90,000 in passive investment income inside the corp reducing the SBD further. We declared a year-end bonus to bring active income under $500K and set up a holding company to move the investment portfolio out, restoring full SBD access. Tax saved: $13,400/year.
Two-Physician Practice, Vaughan ($1.2M Combined)
Married physician couple operating through one corporation with no income splitting. We restructured share ownership, added a spousal dividend stream supported by active involvement, set up prescribed rate loan planning for investment income, and built a retirement drawdown model. Combined annual savings: $24,600.
Physician Tax Planning Opportunities by Income Level
| Billing Income | Key Planning Strategy | Typical Annual Savings |
|---|---|---|
| Under $200K | Salary-dividend split + RRSP maximization | $5,000 to $10,000 |
| $200K to $400K | RRSP + dividend top-up + income smoothing | $10,000 to $18,000 |
| $400K to $600K | SBD threshold + IPP evaluation + family income splitting | $15,000 to $25,000 |
| $600K to $1M | Holding company + passive income management + IPP | $22,000 to $40,000 |
| $1M+ | Full restructuring + corporate insurance + estate planning | $35,000+ |
The Savings Compound: $20,000 saved annually and invested at 7% for 15 years becomes over $500,000. For a physician, tax planning is not an expense. It is the highest-return decision you make each year.
The $500,000 SBD Threshold for Physicians
| Scenario | Active Income | Tax Rate | Tax Paid |
|---|---|---|---|
| Under SBD (with planning) | $490,000 | 12.2% | $59,780 |
| $30K over SBD (no planning) | $530,000 | 12.2% on $500K + 26.5% on $30K | $68,950 |
| $100K over SBD (no planning) | $600,000 | 12.2% on $500K + 26.5% on $100K | $87,500 |
Passive Income Trap: Even if active income is under $500,000, passive investment income over $50,000 reduces your SBD by $5 for every $1 over. At $150,000 passive income, your SBD is gone entirely and your whole corporate income is taxed at 26.5%. A holding company solves this.
What Our Physician Tax Planning Includes
| Service | What We Do |
|---|---|
| Pre-year-end review | 60-day review. Income projection, SBD check, bonus and RRSP modelling. |
| Salary-dividend modelling | 3 scenarios: all salary, all dividend, optimal mix. Updated annually. |
| RRSP vs IPP analysis | Side-by-side model with your age and income. Past-service evaluation. |
| SBD threshold management | Bonus or salary adjustment to keep active income under $500K. |
| Income splitting | Family shareholders, TOSI tests, spousal dividends, prescribed rate loans. |
| Passive income management | $50K limit monitored. Holding company evaluated. Investment mix reviewed. |
| Holding company structure | Asset protection, investment portfolio separation, retained earnings. |
| Retirement drawdown plan | Dividend timing to fill low-income years tax-efficiently. |
| Estate and succession | Share structure, estate freeze, LCGE evaluation. |
| Quarterly check-ins | Income tracked quarterly. Adjustments made in real time, not after year-end. |
Does Your Medical Practice Need Better Tax Planning?
- You have never had a pre-year-end tax planning meeting with your CPA
- Your salary-dividend split has not been modelled for the current year
- You contribute to RRSP but have never had an IPP evaluated
- Active income is approaching or exceeding $500,000 with no strategy
- Passive investment income inside your corporation is approaching $50,000
- Family members could hold shares for income splitting but do not
- Your CPA does not discuss holding company benefits at your income level
- Retained earnings are sitting in the operating corporation with no investment strategy
- You have no retirement drawdown plan for your corporate investments
- Your spouse works in the practice but receives no compensation
- You plan to retire within 10 years with no estate or succession plan
- You want proactive tax planning, not reactive tax filing
Physician Tax Planning from $400. Fixed Fee.
Year-end strategy, RRSP/IPP, income splitting, SBD management. 30-Day Money-Back.
Why Physicians Choose Gondaliya CPA for Tax Planning
Physician Strategists
MPC structure, OHIP, IPP, income splitting, retirement planning.
Proactive, Not Reactive
60-day pre-year-end review. Quarterly check-ins. Real-time adjustments.
Fixed-Fee Pricing
No hourly. 30-Day Money-Back. 60-Day Fees-Matching.
1300+ Reviews
Canada's most AFFORDABLE CPA. Flat fees for every service.
Physician Tax Planning Pricing
| Service | Fee | Includes |
|---|---|---|
| Tax planning (under $100K revenue) | From $400 | Year-end strategy, salary-dividend, RRSP optimization |
| Tax planning ($100K-$500K) | From $2,450 | Full planning, SBD management, IPP analysis, quarterly check-ins |
| Tax planning ($500K-$1.5M) | From $4,900 | Holding company, income splitting, retirement, estate planning |
| Holding company setup | From $1,200 | Incorporation, share structure, Section 85 rollover coordination |
| Monthly bookkeeping | From $150/month | Foundation for all planning. HST filing and T2 FREE. |
| Standalone year-end review | From $500 | One-time pre-year-end strategy session with action plan. |
Know Your Exact Fee Before We Start
AFFORDABLE flat fee. 30-Day Money-Back. 60-Day Fees-Matching.
Frequently Asked Questions: Physician Tax Planning
Meet Your Physician Tax Planning Specialists
Sharad Gondaliya, CPA
Founder & Managing Director
Gondaliya CPA Professional Corporation
Sharad leads physician tax planning engagements, MPC structuring, IPP analysis, income splitting and retirement planning for doctors.
Vandana Goel, CPA
Senior Accountant
Gondaliya CPA Professional Corporation
Vandana handles physician bookkeeping, OHIP reconciliation, quarterly income tracking and compensation modelling for tax planning.
What Our Clients Say
1300+ five-star reviews from business owners across Ontario and Canada.
10 Smart Tax Planning Strategies for Physician Corporations
| # | Strategy | Why It Saves You Money |
|---|---|---|
| 1 | Pre-year-end planning meeting 60 days out | Every opportunity identified before the window closes. |
| 2 | Keep active income under $500K SBD | 12.2% vs 26.5%. $14,300 saved per $100K under threshold. |
| 3 | Optimize salary-dividend split annually | RRSP room + CPP savings. Changes each year with income. |
| 4 | Evaluate IPP if over 40 with high income | Larger deductible contributions than RRSP. Corporation funds it. |
| 5 | Monitor passive income against $50K limit | Over $50K erodes SBD. Holding company protects it. |
| 6 | Split income with family where TOSI allows | Lower household tax through spouse and family shareholders. |
| 7 | Set up holding company for surplus earnings | Protects investments. Preserves SBD. Enables retirement plan. |
| 8 | Build a retirement drawdown plan | Dividends fill low-income years tax-efficiently. |
| 9 | Consider corporate-owned life insurance | Tax-sheltered growth. Tax-free death benefit via CDA. |
| 10 | Quarterly income check-ins, not annual | Catch changes early. Adjust strategy mid-year. |
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Stop Overpaying Tax. Start Planning.
Physician tax planning from $400. Year-end strategy, RRSP/IPP, income splitting, SBD, retirement. AFFORDABLE flat fees.