What is Tax Integration?

Tax integration is a concept that tax authorities use to try to ensure that the total tax burden is the same, regardless of the form of business ownership. Let's say you have a corporation and are taxed on the income coming in to the corporation. You then pay yourself a dividend. Therefore, there will be tax implications. to the corporation and tax implications to you personally. Integration tries to make sure that the total tax the government receives is the same whether your business is a corporation, a partnership, or sole proprietorship.

Integration is not perfect, and this is where your accountant comes in. Governments change tax rates on both personal and corporate income for various reasons. They may want to create jobs or . stimulate the economy. These tax changes may create opportunities for tax planning for the small business owner.

Annually, you should meet with your accountant to discuss any changes in tax law that will benefit you. You also want to be certain that the business structure you have created is still favorable to your particular tax situation.