Nobody likes taxes, this is simply a fact of life. The other fact of life is that we have to pay taxes, whether we like it or not.

The good news is that as a business owner, there are a few ways you can utilize to cut down your tax bill a little, and therefore save cash year upon year. Of course, at first glance this looks impossible - you have to pay the tax that is due, right? Well, yes you do, but there are certainly completely legal ways which allows you to spread your tax or reduce it, while avoiding penalties and other late fees.

Let’s explore five ways your business can save on taxes this coming year.

1 Always File on Time

It might sound obvious, but the single easiest way to save on tax-related costs is to make sure that you file your taxes on time, to avoid late penalties from the CRA. These can vary in cost depending how late you are, and if you’re a repeat offender, you could be putting your business’ future on the line. Cut out the risk and make sure that you’re aware of when you should file, what you should file, and put plenty of time aside in the run up to filing season, so you’re not late.

2 Consider Cloud Accounting

Another way to make sure that you never miss filing time and always file the right information is to make sure you choose the right accountant. Traditional accountants are still a very high quality way to get the right information, but what about Cloud accounting? This is often a cheaper way to do your taxes and run the financial side of your business in general, while keeping everything in real-time. This cuts down on the chances of a mistake, and a mistake when filing your taxes could be costly.

3 Make The Most Taxable Deductions

Make sure you know what you can claim as a tax deduction, and make sure you claim for it! This can reduce your final tax bill down quite drastically in some cases, and a professional accountant will be able to give you up to date information on what you can claim back and what you can’t. Certain costs, such as home or office travel, costs related to operating, etc, these can all be deducted from your tax, therefore keeping cash in your business instead.

4 Move Your Income to a Family Member

Another popular way to reduce your tax bill is to transfer a portion of your income to a family member, usually a spouse, who has a lower tax bill than you do. This means you’re going to be paying less tax on that amount and you get to keep more within your business. Remember TOSI (Tax on Split Income) is out there and you need to be careful not to be caught up on this. Again, a qualified accountant will be able to give you more up to date information on this possibility and give you the best options for your personal circumstances. 

5 Use Tax Efficient Accounts

Finally, when investing your money throughout the year, make sure that you look into options which cut down on your tax bill. For instance, you get a tax deduction on your RRSP contributions, and TFSAs allow you to earn from investments and not pay tax on your withdrawals.

These are all ways you can save on your tax bill this year.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team