I’m not sure they’re screwed. They’re playing by the same rules as the rest of us. We can all become a capitalist just like you and I are doing. In fact, that’s really the goal for most of us- get to a position where our capital can support us. If they have a particularly low income, they’re not paying income taxes anyway (see famous 47% comment which as near as I can tell was true of federal income taxes and will continue to be true, although perhaps with a slightly different number, under the proposed House plan.)
This is simple. Do your research and choose a paid price point. Once your app is released you can tweak your pricing to find the optimal value. From personal experience, I’ve noticed I generally make more money when choosing to go the premium route vs the budget route. Meaning, I price the app higher than my competitors to let them know they are purchasing a more premium product. Of course, this is not always the case. Sometimes the $0.99 apps do better since they generate more downloads and climb the app rankings easier. Higher app ranking means more visibility.
Many entrepreneurs are asking if the new rules will result in them paying additional taxes if their corporations generate passive income in excess of $50,000. In most circumstances, the answer is that they will pay more corporate taxes, thereby reducing the size of their tax deferral advantage (from 40% down to 27% on their 2019 corporate income earned in Ontario).
You may already know there is a difference and you may know generally what that difference is, but it’s likely you don’t truly grasp the implications of those differences. For the record, there is nothing wrong with either of them. But if you want to maximize your returns down the road, you do want to make sure you really do have a solid feel for how these two differ.
Consider withdrawing sufficient corporate funds to maximize your RRSP and TFSA contributions, rather than leaving the funds inside the corporation for investment. Given sufficient time, RRSP and TFSA investing would generally outperform corporate investing when earnings come from interest, eligible dividends, annual capital gains, or a balanced portfolio. And removing funds that would otherwise be invested within the corporation could reduce future AAII.
Dividends made sense 40 years ago as a relatively simple rule of thumb, but after all the work done by John Bogle with index investing, and academics with Monte Carlo sims and the 4% rule, dividend investing just isn’t the simplest, cleanest way to invest or receive passive income anymore. It’s actually significantly more risky compared to index investing, because dividend companies are a much smaller share of the total global economy compared to the broader indices.
Nonpassive: Businesses in which the taxpayer materially participates. Also, salaries, guaranteed payments, 1099 commission income and portfolio or investment income are deemed to be nonpassive. Portfolio income includes interest income, dividends, royalties, gains and losses on stocks, pensions, lottery winnings, and any other property held for investment
Great breakout of some common items that are (mostly) accessible to individuals. My biggest issue with p2p is the ordinary interest it generates and the ordinary tax that we have to pay. That really takes a bite out of the returns. Fortunately, I opened an IRA with one of the providers to juice the return with zero additional risk. 6-8% nominal returns over a long period of time will make me very happy. It should end up as 5-7% of the portfolio anyway, so nothing too significant.

If you are not into craft and love graphical designing and digital downloads, then also Etsy is a great option. I sold digital clipart, patterns and coloring pages on Etsy. I earned much more money than I anticipated. This added $500 per month to my passive income streams. I loved the simplicity of it. This is a great way to earn money on the side while you are traveling or working your day job.
Rentals, just like stocks, throw off cash. With rentals we call that cash “rent”, and with stocks we call it dividends. A significant difference however is that the S&P 500 has appreciated at ~6% per year (above inflation) for the last 100 years…..Real Estate has had almost 0 growth above inflation. So are rents higher than dividends? Maybe, maybe not. But unless you got one heck of a deal, the delta in rent over dividends will have a very tough time making up for the 6% per year difference in appreciation.
The IRS uses the latest encryption technology to ensure your electronic payments are safe and secure. You can make electronic payments online, by phone, and from a mobile device using the IRS2Go app. Paying electronically is quick, easy, and faster than mailing in a check or money order. Go to IRS.gov/Payments to make a payment using any of the following options.

Solomon Poretsky has been writing since 1996 and has been published in a number of trade publications including the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." He holds a Bachelor of Arts, cum laude, from Columbia University and has extensive experience in the fields of financial services, real estate and technology.


Logan is a CPA with a Masters Degree in Taxation from the University of Southern California. He has been featured in publications such as Debt.com. He has nearly 10 years of public accounting experience, including 5 with professional services firm Ernst & Young where he consulted with multinational companies and high net worth individuals on their tax situations. He launched Money Done Right in 2017 to communicate modern ideas on earning, saving, and investing money.
4. Home Office: Passive income investors, not unlike most professionals that work from home, are allowed to deduct their home office; provided it meets the minimal criteria. What’s more, this deduction helps both renters and homeowners. You can deduct your home office whether you on the home it is in or are simply renting it. However, like every other deduction on this list, the home office must meet certain requirements to qualify for a deduction.
Income from an oil or gas property if you treated any loss from a working interest in the property for any tax year beginning after 1986 as a nonpassive loss, as discussed in item (2) under Activities That Aren’t Passive Activities , earlier. This also applies to income from other oil and gas property the basis of which is determined wholly or partly by the basis of the property in the preceding sentence.
4. Home Office: Passive income investors, not unlike most professionals that work from home, are allowed to deduct their home office; provided it meets the minimal criteria. What’s more, this deduction helps both renters and homeowners. You can deduct your home office whether you on the home it is in or are simply renting it. However, like every other deduction on this list, the home office must meet certain requirements to qualify for a deduction.
The hope is that under the new federal budget rules, businesses can pay taxes at a rate that better reflects their size and and complexity. By giving business owners at all levels an incentive to focus on active income and generating sales, these new rules could help with overall growth for Canadian businesses. The new rules are simpler to understand and calculate, which is good news for both you and your business clients.
Portfolio income is derived from investments and includes capital gains, interest, dividends, and royalties. Various types of portfolio income are taxed differently. For example, capital gains on investments held for longer than 12 months are taxed at a rate of 10% to 20%, and those held for less than 12 months are taxed as regular income. However, portfolio income is not subject to social security and Medicare taxes.
Once your audience has grown and you have validation that you’re offering them value, there are many ways to create passive income. You could sell digital products like ebooks or courses, take up affiliate marketing in which you promote other company’s products and earn a commission when you sell that item to your audience, build a community and charge people to be a part of it, create software and sell that, among other avenues. Ask your audience directly what would serve them best, or look at what they’re saying on Twitter, Facebook or other websites, to find out what problems they have and how you could help solve them.
I wanted to specifically call out one particular strategy within equity investing that bears mentioning – dividend growth investing is when you focus on stocks that not only pay a dividend but have a history of strong dividend growth. When I was first building my portfolio of individual stocks, I focused on buying companies with a history of dividends, a history of strong growth, and financials that supported a continuation of both.

What I like about p2p investing on Lending Club is the website’s automated investing tool. You pick the criteria for loans in which you want to invest and the program does the rest. It will look for loans every day that meet those factors and automatically invest your money. It’s important because you’re collecting money on your loan investments every day so you want that money reinvested as soon as possible.
How to Monetize: Affiliate marketing works well when you discuss products on your blog. For our fish tank blog, we would link to all the things you need to buy for an aquarium and then when people click on that link and buy that item (and other items they purchase with it with some exceptions) you get a percentage of the purchase. Amazon Associates is the best-known affiliate marketing program, but there are others like Impact Radius, ShareASale, Commission Junction, ClickBank and Rakuten too.
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