| Current Category is: Taxes | Select Another Category | |
|
|
| Home | Search | Categories | Links | About Us | Contact Us |
|
|
 |
Rearrange Your Affairs For Maximum Tax Savings
One way to maximize your business profits is by reducing your taxes.Frequently, income and other taxes could be lowered significantly if only the taxpayer were willing to plan ahead. By taking some simple steps to rearrange your affairs, you could save a fortune! 1. Are You Splitting Your Business Income? You may pay reasonable salaries to spouse or children through your incorporated or unincorporated business. If you are not doing so, you may be missing out on some real tax savings. In the Canadian Federal Budget of February 16, 1999, measures were introduced to discourage income splitting with minor children through family trusts. However, these measures do not apply to paying reasonable wages to family members. Thus, this may be one of the last ways of legally splitting income left for the small business person with minor children. Obviously, the amounts paid must bear some relationship to the work performed. Of course, all required payroll taxes should be remitted and proper records need to be maintained. Why not rearrange your affairs so that family members with little or no income can perform duties for and be paid by your business? Then, they can contribute out of their own income towards the operation of the household. In this way, little or no tax will be paid by your dependants and you will have successfully shifted taxable income out of your hands. 2. Should You Register For The Goods And Services Tax? Even if your business grosses less than $30,000.00 per year in taxablesales, you may still benefit by registering your business to collect the Goods and Services Tax (G.S.T.). If you are not doing so, you may be missing out on some real tax savings. For example, you will be paying G.S.T. on many of your business expenses. If not registered for G.S.T., you must absorb this cost. If registered, you may deduct the G.S.T. paid on such business expenses (input tax credits) from the tax collected. Many business persons expect to pay G.S.T. and it doesn`t really cost them anything since they deduct such amounts as input tax credits from the G.S.T. they collect from their customers. In some cases, the quick method of calculating G.S.T. may actually allow you to retain more of the G.S.T. collected than you would have just claiming the G.S.T. actually paid by you. A factor to consider also: If you are not registered for G.S.T. in Canada, you are telling your clients that you do under $30,000.00 per year in taxable sales or that you cheat. Is this the image you want your clients to have? 3. Could You Benefit From Incorporating Your Business? Although incorporating your business may result in increased accounting and legal fees (for setup, extra tax returns, and annual minutes), the advantages of incorporation may justify this added expense. Not only will you enjoy limited liability by incorporating, but you may reap significant tax savings as well. Corporations are often subject to lower tax rates on small business income. In Canada, sales of shares of qualifying small business corporations can obtain a lifetime $500,000.00 capital gains exemption. Certain tax incentives and government programs are only available to incorporated entities. Additionally, corporations can be used for income-splitting and estate, retirement, and succession planning objectives. 4. Do You Engage in Tax Planning Year-Round? Some people only worry about their taxes during tax season. However,you will save a fortune in taxes, legally, if you make tax planning your year-round concern. Can you make some changes to turn your hobby into a moneymaking business? Can you use that extra room in your house as a home office for your business? Can you arrange to use your car more for business purposes and have you documented your business use mileage? Can you arrange for more of your entertainment expenses to be business related and have you listed the business purpose on the back of each receipt? Do you make business and personal purchases, investments, and other expenditures with tax savings in mind. Do you document your expenses well so that you they would survive a tax audit? Whenever you are faced with a business or personal financial decision, do you consider the tax consequences? Make year-round tax planning part of your business management mindset and, thus, enjoy maximum tax savings. Yes, by rearranging your affairs to account for tax implications, you will save a fortune in taxes. RESOURCE BOX J. Stephen Pope, President of Pope Consulting Inc.,http://www.popeconsultinginc.com/ has been helping clients to earn maximum business profits for over twenty-five years. For valuable Work at Home Small Business Ideas, visit:http://www.yenommarketinginc.com/
MORE RESOURCES:
Former Giants, Eagles player Will James pleads guilty to not paying taxes - The Star-Ledger - NJ.com
Google News |
|
|
|
RELATED ARTICLES
Fiscal Deity: Tax Consultant Strategic planning throughout the year results in a minimal tax balance. The objective of planning your tax payables is not to prevent paying taxes, it is to pay no more than your fair share of taxes, and keep your money where it earns you the most. Taxation of Isle of Man Companies from April 2006 At the present time a company incorporated in the Isle of Man, owned by non-residents and which complies with the other statutory requirements, is not liable to Isle of Man taxation. Whilst locally trading companies pay tax at 18%, a qualifying offshore company pays a flat annual tax of 475 or 1,000. To Tax or Not to Tax - This is the Question To tax or not to tax - this question could have never been asked twenty years ago.Historically, income tax is a novel invention. Hurricane Katrina - How To Use Your Business Loss To Get A Refund on 2004 Taxes With the massive losses caused by Katrina, the economy of the Gulf Coast region is in extremely bad shape. Fortunately, there is a quirk in the tax code that can help you generate a large refund from your 2004 taxes. Understanding Marketing Tax Deductions Marketing is a necessary expense in running practically any business and the IRS acknowledges as much. You may run advertisements on or in the Internet, radio, television, magazines, newspapers and other media to sell your products or services. IRS Certifies 2006 Toyota Hybrid for Clean Fuel Deduction The Internal Revenue Service has certified the 2006 Toyota Highlander Hybrid as being eligible for the clean-burning fuel deduction. This certification means that taxpayers who purchase one of these hybrid vehicles new during calendar year 2005 may claim a tax deduction of up to $2000 on Form 1040. Save Money on Taxes - Let Uncle Sam Pay for Your Fun! "Deducting Meals and Entertainment"O.K. IRS Obtains More Than 100 Injunctions Against Tax Scheme Promoters The IRS has obtained civil injunctions against more than 100 promoters of illegal tax avoidance schemes and fraudulent return preparers in an ongoing crackdown that began in 2001. Many of the injunctions, obtained in cooperation with the Department of Justice, also order the promoters to turn over client lists and to cease preparing federal income tax returns for others. Tax Records - What You Should Keep And For How Long Many taxpayers are confused about how long they should keep tax records. The term "tax records" refers to your tax returns and the documents that support the information in the returns. Correspondence From The IRS - Yikes! It's a moment every person dreads. You pick up the mail and there is an envelope from the IRS. Tax Investigation - What You Need To Do The knock on the door from a Tax Inspector is something that every taxpayer fears. Your immediate thoughts will be "Have I been honest with my tax returns or not". Tax Tips for Home-Based Business Owners As tax time approaches, many home-based business owners begin completing their forms or paying their accountants with trepidation. This nervousness comes from two sources: a fear of being audited and a fear of having to pay a lot. Tax Time Tune Up Excerpted from the new book, "How to Do Space Age Work with a Stone Age Brain" TMThe complete article with pictures and sample Auto Log is available at www.organize. The Seven Deadly Tax Sins: Commonly Missed Deductions It's that time again, the April 15 tax deadline is looming large. If youre like most people, you havent gathered all of your tax records, let alone filled your return. Gambling Income and Expenses - Tax Requirements Hit a big one? With more and more gambling establishments, keep in mind the IRS requires people to report all gambling winnings as income on their tax return.Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse and dog races and casinos. Need an Offshore Sales Office in a Tax Free Environment? The 100 year old investment-banking firm of Warburg, Dillon Read (on Park Ave. N. Furnishing Evidence in E-Tax Compliance Self-assessment relies on taxpayers voluntarily meeting their tax obligations. This concept is recognised in all tax statutes, which sets out taxpayers' primary obligations, and clearly spells out that taxpayers are required to determine the amount of tax payable correctly and to pay it on time. Taxation of Forgiven Debt: The 1099C & You Often people fall on hard times and stop paying on credit cards. After a while the account may go to an outside debt collector who might offer a settlement of the debt for 30-40% of theoriginal sum. Slash Tax when Buying a Business When buying a business, how the "purchase price" is made up can affect what you pay in tax. The plan is to make as much of the price tax deductible for you and not the other party. Deducting Points On Home Refinances Deduction of Refinance PointsAny points that you pay in the refinancing of your residence are tax deductible over the length of the loan in question. The deduction is allowable only if the residence is your primary home and the new mortgage replaces a previous one and/or is used to improve the residence.
|
| Home
| Sitemap
| Disclaimer
| Privacy
| Contact
Us © COPYRIGHT 2011 BRAINBELLY.COM |
