Nobody wants to pay more than they have to in taxes. Grant Thornton LLP wants to remind Canadian taxpayers and businesses that now is the time to employ end-of-year tax planning strategies that can help reduce the overall tax burden.
Managing a tax burden has never been more difficult, whether you’re managing your individual tax rates, the rates on your investments, the taxes on your privately held business, or the income of executives and shareholders at your company. There are ways to reduce your tax liability, but all of them take planning.
“It’s not too late to change what goes on your tax return when tax season rolls around,” said Gary Dent, Grant Thornton’s National Tax Leader. “Just a little bit of planning in November or December can go a long way in reducing your tax burden for this year.”
Fortunately, there’s still plenty of time to put last-minute planning techniques into play.
Grant Thornton is offering twelve days of tax tips. On the first day of tax tips: Switch end-of-year bonuses into dividends. Business owners may want to look at the split between salary, bonus and dividends for themselves and their spouse and/or children. Owner-managers often declare a bonus at year-end to reduce the corporation’s income to the amount that qualifies for the small business deduction. However, a corporation can also pay dividends to its shareholders, and eligible dividends may be subject to a lower rate of tax.
Check back tomorrow for the second day of tax tips.