Should I Incorporate? A Guide for Calgary Professionals and Consultants

Should I Incorporate? A Guide for Calgary Professionals and Consultants

If you’re a high-earning professional, consultant, or contractor in Calgary, you’ve likely asked the question:

“Should I incorporate my business?”

Incorporation can unlock major tax and wealth-building advantages—but it’s not the right fit for everyone. The decision depends on your income level, business structure, future plans, and how you manage your money.  Getting the right advice from a financial advisor in Calgary with a personalized financial plan can help.

This article breaks down the key financial and strategic considerations to help you determine whether incorporation is right for you—and how to do it effectively.

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1. Who Should Consider Incorporating in Alberta?

Incorporation may be ideal if you:

• Earn more than you spend personally each year (i.e., surplus income)
• Operate a consulting business, medical/dental practice, or contract work
• Want to reduce personal tax and retain earnings in a corporate structure
• Are planning to build long-term wealth and invest through your corporation
• Are concerned about liability protection and business continuity

If you spend every dollar you earn, there’s often no immediate tax advantage—but that changes as income increases.

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2. Key Tax Benefits of Incorporation

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Tax Deferral on Retained Earnings

• Alberta corporate tax rate: ~11%
• Highest personal tax rate: ~48%

By retaining income inside your corporation (instead of taking it all as salary), you can defer personal taxes and invest the surplus more efficiently.

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Income Splitting (in specific situations)

While the rules have tightened (especially under TOSI), there may still be opportunities to split income with:

• A spouse or adult child who works in the business
• A holding company or trust structure (with professional advice)

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Access to Small Business Deduction

The first $500,000 of active business income is taxed at a reduced rate in Alberta—accelerating your ability to accumulate investable wealth.

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3. Incorporation and Investment Strategy

One of the biggest long-term wealth management advantages of incorporation is the ability to build wealth inside your corporation or a holding company.

With the right strategy, you can:

• Invest retained earnings in stocks, ETFs, GICs, or private opportunities
• Flow capital dividends tax-free through a Capital Dividend Account (CDA)
• Create personal and corporate investment plans that work together
• Use corporate-owned life insurance for estate or tax-efficient liquidity

At MRG Wealth Management, we help clients coordinate personal and corporate wealth management strategy through our Personal CFO framework—so your assets grow tax-efficiently.

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4. Costs and Responsibilities to Consider

Before incorporating, be aware of the obligations:

• Initial legal and accounting setup (~$1,000–$3,000)
• Annual corporate tax filings (T2) and bookkeeping
• Possible GST registration
• Compliance with CRA rules on business purpose and active income

It’s important to work with a CPA (Chartered Professional Accountant) and financial advisor in Calgary familiar with professional corporations and private investment strategies.

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5. What About Medical or Dental Professionals?

Medical and dental professionals often benefit significantly from incorporation. In Alberta, most can form Professional Corporations (PCs) and enjoy:

• Access to the small business deduction
• Ability to retain earnings and invest
• Corporate-owned insurance and retirement planning
• Opportunity to involve family members in ownership (where allowed)

If you’re billing through Alberta Health or running a private practice, incorporation should be explored early in your career.

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6. Incorporation Isn’t All or Nothing

Some professionals choose to:

• Start as a sole proprietor and incorporate later
• Use a bare trust or nominee structure for real estate or asset protection
• Create a holding company (HoldCo) to separate active business and investments

Your path depends on your stage of business, personal goals, and long-term vision.

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✅ Should You Incorporate? Let’s Run the Numbers.

At MRG Wealth Management, we specialize in helping Calgary professionals, consultants, and business owners evaluate the real financial impact of incorporation—not just the theory.

As your Personal CFO and financial advisor in Calgary, we integrate your corporate structure, tax plan, and wealth management strategy to help grow your wealth intentionally.

Book a complimentary introduction call session and find out if this is the right move for you.

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