Corporate tax check-up for physicians
Four quick questions about your Medical Professional Corporation, and the areas worth a closer look.
In short: The ZAI Wealth Management corporate tax check-up is a free four-question diagnostic that shows an incorporated physician whether their Medical Professional Corporation is at risk of the $50,000 passive income clawback and where the biggest planning opportunities are. It takes about two minutes and no preparation.
For a dollar estimate, try the Physician Tax Savings Calculator.
For education and illustration only. Not tax, accounting or legal advice.
Common questions
What is the passive income clawback for medical corporations?
The passive income clawback reduces a corporation's federal $500,000 small business limit by $5 for every $1 of passive investment income above $50,000 in the previous year, and eliminates the limit entirely once passive income reaches $150,000. Above that, practice income is taxed at the general corporate rate of roughly 23% to 30% instead of 9% to 12%. Most provinces follow the federal rule. ZAI Wealth Management's corporate tax check-up shows a physician where they stand.
How much can the passive income clawback actually cost a physician?
In ZAI Wealth Management's worked example, a British Columbia surgeon with $114,000 of passive income loses $320,000 of her $500,000 small business limit and pays about $48,000 more tax a year, because $300,000 of practice income is taxed at 27% instead of 11%. Bringing passive income back under $50,000 restores the full limit and the $48,000.