Toronto Small Business Accountant – Reducing Taxes and Saving $$$

Has your small business accountant Mississauga actively helped in the reduction of your taxes? Have you been able to save your small business any money? If not, then according to the advice of Allan (expert and small business accountant Mississauga) you should have a candid conversation with your business accountant and ask the following mandatory questions:

1.    Ask: Have you put a tax strategy in place to minimize taxes for myself and for my business?

The answer should most definitely be yes. Allan (expert and small business accountant Mississauga) places utmost importance on having the appropriate tax saving strategy. It is vital to have a tax strategy specifically tailored to your small business to minimize taxes.  Such a strategy should include basic elements such as the potential tax deductions available to your business, how to shelter profits from taxation, and income splitting opportunities.

2.    Ask: Have you evaluated whether my Mississauga / Toronto based company has appropriate internal controls?

Internal controls are company policies and procedures that are designed to increase the accuracy of your company’s financial reports and financial statements.  An example of an internal control for a small business could be “To review the income statement quarterly for variances in revenues and expenses in excess of 10%.”  

By conducting this review with your small business accountant Mississauga/ Toronto, you are more likely to catch errors in your financial statements and identify potential cost savings and opportunities for revenue generation.

3.    Ask: Have you looked at my compensation structure for tax savings?  

As a business owner, you may be remunerated by salary, management fees, dividends or repayment of shareholder loans.  Each of these methods of compensation has differing tax rates.  For example, shareholder loans may be paid tax free to the shareholder and therefore have an implicit tax rate of 0%.

4.    Ask: How often should I speak with you about financial and tax matters for my business?

Allan (expert and small business accountant Mississauga) feels that the answer of this question is dependent on a couple of defining factors. The number of a times in a year that you should discuss important financial and tax matters with your small business accountant Mississauga depends on the size of your business, the strength of your company’s internal controls, and the number of major business decision that you make in a given year.

At a minimum, you should speak with your Small Business Accountant 3 to 4 times a year.  By speaking regularly with your Small Business Accountant, he/she can provide proactive advice that could prevent you from making costly errors or help increase your company’s bottom line.

5.    Ask: Why am I paying so much in tax and as my Small Business Accountant can you help me reduce the amount of tax that I pay?

The highest income tax rate is 46.4% for individuals residing in Ontario.  The rich have not gotten where they are today by paying almost half of their earnings in tax.

Your Accountant should speak with you about tax savings strategies that can help reduce the amount of tax that you pay.  

For example, a commonly applied income-splitting strategy is the use of a Family Trust to distribute the profits of a business among family members, as opposed to paying all of the profits to the owner of the business.  By income-splitting, the overall tax paid can be reduced substantially.

The questions above are intended to help you evaluate whether your accountant’s services are helping you save money in taxes or not. Allan (expert and small business accountant Mississauga) encourages you to make sure that the conversation you have with you Small Business Accountant should contain the important questions suggested by him .  If the answers that you receive are not satisfactory, you should consider switching to another Small Business Accountant in the Toronto or Mississauga area that specializes in the unique needs of small business.  After all, you deserve to have an Accountant that will save your business money!

ABOUT THE AUTHOR

ALLAN MADAN

CPA, CA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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