A corporation’s net amount of taxes depends on its revenue after the general tax reduction. As a chief executive officer, you without a doubt aim to make the most of your corporate income, and lower your income tax as much as possible. A few legal accounting practices allow you to do just that.
Here are five accounting practices to lower corporate income tax.
1. Be organized to reduce its corporate tax
Organize to maximally lower your corporate income taxes. Keep proper track of your monthly expenses and revenues. That will save time when preparing your return. Keep all your receipts and invoices, and sort them according to their dates and types of expenses.
The better organized you can be, the more time you will save. The only way not to pay penalties and interest is to pay your income taxes when they come due.
2. Take advantage of the tax benefits available to the self-employed
If you are self-employed, many tax benefits are available to you. Since your taxation rate is the same as that for individuals, you would be wise to inquire about how to lower your personal income taxes. In addition, other benefits are also available to you. For instance, if you use one room in your home for your home office, you are entitled to deduct it.
3. Claim expenses
All enterprises are entitled to tax benefits and reductions for some types of expenses. Do not hesitate to resort to the effective services of a tax accountant to determine which expenses correspond most to your corporation.
Again, it is of the utmost importance to organize, and to keep all your receipts and invoices. If your type of business, for instance, is computing, you could claim the purchase of new computers for your employees. You could also claim the purchase of supplies like software, an executive vehicle, meals in restaurants for your customers, or even the cost of organizing a party to meet new customers.
In short, as soon as you make an investment for your enterprise, you become eligible for a tax benefit.
4. Invest in Research & Development
To lower your corporate income tax, you could also allocate expenses in Research & Development. Canada greatly encourages enterprises to innovate and do research. Such expenses may be claimed as deductions in the income tax return.
5. Resorting to the good offices of a corporate tax accountant
To help you manage your revenues and your income tax returns, it is highly recommended to enlist the services of tax accountant. There are many ways to lower one’s taxes, and a tax accountant, thanks to his/her expertise, will know exactly what is best for you and your enterprise. Our tax accountants will be happy to guide you through the processing of your corporate income tax return.
Our tax accountants will also be able to guide you in all your strategic decisions.
By following these five accounting practices, you will benefit from tax reduction, and take full advantage of your corporate profits.