We answer your most pressing questions on optimizing your business taxes and avoiding common tax pitfalls.

  • How do I sign the DocuSign document that was sent to me?

  • How do I access the DocuSign documents that I signed?

  • Should I incorporate my business?

  • How can I reduce my business taxes?

  • What taxes will be owed when I sell my business?

  • Should I buy a vehicle in the corporation?

  • Should I lease or buy my vehicle?

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Every business is unique, and there are many factors to consider before deciding whether to incorporate your business. Factors such as the amount of profit generated, personal needs, business goals, legal liabilities, and potential lawsuits are all critical factors to consider.

There are many ways to reduce your business taxes, including various deductions, wages to family members, tax credits like the Co-op Tax Credit, and the Scientific Research & Experimental Development (SR&ED) credit. Working with a tax professional is essential to ensure you are taking full advantage of these opportunities.

If your business is not incorporated, it must be incorporated before selling it. Suppose the purchaser buys the shares of your corporation, and the business is a Qualifying Small Business Corporation. In that case, each shareholder can have up to a $1,000,000 capital gain and potentially pay as little as $40,000 in personal income taxes on the gain. Proper planning can minimize the income tax liability.

This depends on the amount the vehicle will be used for business purposes versus personal use. There are both income and corporate taxes to consider, so each case needs to be examined individually to determine the best course of action.

The tax considerations are more about the timing of the tax savings. Lease payments are deductible when made, and the HST on the payment is an input tax credit (ITC) and is recoverable. If the corporation buys the vehicle, all the HST is recoverable, and a portion of the vehicle is deducted from the tax return each year. Again, each case is different and requires a personalized approach.

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