If You Think You Just Paid Too Much in Income Tax, Incorporating Might Be for You
We get it—you just wrapped up personal tax season, and the number on your tax bill might’ve left you speechless (and not in a good way). If you’re a health professional in Canada running your own practice, you may be wondering: “Isn’t there a smarter way to do this?”
There is. And incorporation might be the missing piece.
Whether you're a naturopathic doctor, chiropractor, RMT, or mental health professional, this is your moment to hit pause, look at the big picture, and ask if your current business structure is really serving you.
Why You're Feeling That Tax Pinch
As a sole proprietor, every dollar you earn is taxed at your personal income rate, which—depending on where you live and what you make—could land you in a surprisingly high tax bracket. If you made more than expected this year or scaled your practice quickly, you're probably feeling the sting.
Incorporation offers a way to manage this. By transitioning your business to a corporation, you open the door to lower corporate tax rates and flexible compensation strategies—which can reduce how much tax you owe each year.
Is It Time to Incorporate? Ask Yourself These 4 Questions:
1. Did your tax bill this year feel way too high?
If the answer is yes, you're not alone—and it’s a strong sign that incorporation might help. Corporations in Canada are taxed at much lower rates than individuals on the first portion of active business income, which can make a huge difference if you’re earning more than ~$80K annually.
2. Do you have money you’d rather leave in your business to invest?
One of the best-kept secrets about incorporating? You don’t have to pull out every dollar you earn. You can leave income in the corporation at a lower tax rate and use it to invest in your future—without taking a huge personal tax hit.
3. Would you like more control over how you pay yourself?
When you incorporate, you can pay yourself a salary, dividends, or a mix of both. This gives you tools to build smarter tax strategies, optimize RRSP and CPP contributions, and even manage your income from year to year.
4. Are you planning to grow your practice or hire in the next few years?
Incorporating sets you up for scaling. It separates you legally and financially from your practice, which can simplify everything from bringing on new team members to securing funding.
So, What Should You Do If You're Leaning Toward Incorporating?
If you’ve read through those questions and thought, “That sounds like me”, you’re not alone—and you don’t have to make the leap without a plan. The next step is to take a deeper look at your financial goals, your income patterns, and any professional guidelines tied to your license. Incorporating is all about setting up a system that supports your long-term vision as a health professional in Canada. That’s where the right guidance (and the right tools) make all the difference.
You Don’t Have to Figure It All Out Alone
We created the Business Foundations: Incorporating Webinar specifically for Canadian health professionals who are ready to explore incorporation—but want clear, relevant guidance.
Here’s what we cover inside:
The different types of business structures you can choose from
How to know when it’s the right time to incorporate
Association-specific rules you need to know (because yes, they matter!)
How to pay yourself from a corporation
How to make the most of your tax situation—without the overwhelm
Bonus: You’ll get access to our plug-and-play Excel template so you can see exactly how much incorporating could save you in income tax.
It’s About Saving Money and Owning Your Financial Future
At Tyagi Group Accounting, we’re not here to throw financial jargon at you—we’re here to help you build a practice that feels sustainable, profitable, and empowered. If you just paid a tax bill that made your eyes water, take it as a sign. Incorporating could be your next best step.
And we’ll be here to walk you through every part of it.
