Three Tips to Fine Tune Your 2013 Taxes
There is still a week or two left that you could use to make some beneficial tax decisions to finish off the year right so you are going to be able to get from any potential tax breaks.
Deciding how your company pays you:
As the owner of your company you may be at the point where it is generating enough income that you can draw money from it. The question is do you do this as a salary, or as a bonus or dividends? Whatever you decide will have an impact on both your personal and business taxes. If you decide on a bonus then you can defer the payment until after the year end of the company. Or you may want to think about non-eligible dividends. This sum of money can be taken from the business income that qualified for the low corporate tax rates, or from certain corporate investment income. If this is the route you are going to take then do it prior to the year end 2013.
Know what you are going to gain from your gift giving:
It is the season for giving gifts and bonuses. You can give a non cash gift with no higher value than $500. There is a limit you can give on an annual basis to an arm’s length employee without the employee having to pay tax on it. If during the course of 2013 you have given gifts to the same employee that is in excess of the $500. then the amount over this is taxable. If you give a gift card the CRA views this as a form of cash and is taxable.
How hard are you going to be hit with taxes on your company vehicle?
If you have the use of a Company vehicle you may not realize it but you are going to be taxed on a standby charge and a operating cost benefit. You can bring this down a bit if you are using the vehicle in excess of 50% for business related activities and the personal use is less than 20,000 km. Check where you are at now and if you are close to this 20,000, then don’t use the vehicle for personal use for the remainder of 2013. That way you can reduce your tax owed on this.
These are just three quick tips to give you a good idea that it is not too late to review your tax situation and shave off some of the potential tax expense you may be incurring. It all adds up when you approach your taxes with the knowledge of what you can and cannot do as the year end rolls around.
If you haven’t made arrangements yet with your tax accountant or don’t have one for your business or personal tax returns for 2013 now is the time to book early. Give us a call here at Toronto Accountant and we would be glad to be of service to you.