Tax minimization is a legitimate and integral part of a business strategy, but it’s just one piece of a very large puzzle. No one wants to pay more taxes than they have to, but business owners have to be careful to balance that objective with other parts of their business strategy.
Sometimes tax minimization can lead to some very “imaginative” thought processes (“My dog is a ‘guard dog’ – can I write off my dog food and vet bills?”) in hopes that at the end of the day you have little or no taxable income. But this can have adverse consequences as well – and not just the obvious ones from CRA.
Showing no income on either your personal tax return for a proprietorship or on a corporate return for an incorporated business can make that business very unattractive for investors and lenders who are typically looking for positive cash flow before investing their money.
Before making decisions in your business strategy it’s important to consider how it affects the other components of your overall strategy: finance, target market, supply chain management, inventory management, location, product lines and yes, even tax.
If you have questions about creating an integrated strategy and how all the pieces fit together based on your specific situation call or email to set up an appointment – 250-941-3444 or firstname.lastname@example.org