Tax Strategies 101

The two things that will rob you of more than you can imagine in your lifetime are fear and impatience. When it comes to filing your taxes, fear is the first stumbling block to getting the best deal you can. Fear will prevent you from paying the least amount of tax you have to pay. Fear is what the Canadian Customs and Revenue Agency is counting on to shake your dollars loose. You need to overcome your fear of what you do not understand.

Taxes are not that tough or mysterious. The tax system is merely a mechanism, which the government employs to redistribute wealth, and is a cost of doing business. In other words, it is the price we pay for living where we do and enjoying the benefits of living where we do. The tax system is implemented across the populace to ensure that we pay a part of our earnings to allow governments to finance operations intended to improve the quality of our lives and ensure our safety. Your job is to use the rules to pay your fair share or to structure your financial affairs to pay the least amount of tax, if that’s your mission.

You don’t have to be afraid of what you don’t know or understand – just ask. Ask your accountant for advice based on what you want to do. If minimizing your income tax is the mission, then ask your advisor for direction on doing that. Ask how much it will cost and what anticipated benefit it will bring. By doing so, you’ve taken away the mystery and you’ll know exactly how much you’ll save and what it will cost. Fear is really the enemy, not the tax collector. When you know your rights and options, you can make an informed decision about your financial well-being. Don’t leave those decisions to someone else.

Impatience will also cost you dearly. We’re anxious to get our taxes over and done with but at what cost? Take your time. Evaluate your options. The quick fix is generally not the best fix and in the end it may cost you more than you bargained for. I know where you can get a tax return prepared while you wait and they generally charge less than a dinner for four at MacDonalds. All that proves is that you get what you paid for.

Be demanding. Don’t settle for answers you don’t understand. If it can’t be explained so that you understand, then go elsewhere. Either the person doesn’t consider your business important enough to spend a few minutes discussing it or they just don’t know themselves. Remember: when in doubt, don’t! If you’re not sure, get another opinion. Evaluate options. Ask for results. If it doesn’t sound right to you, or if you think there ought to be a better way, then there probably is. You’re just at the wrong place.

Don’t be afraid to spend some time and money on a professional tax return. You’re paying for expert advice, which may save you money, protect your business and safeguard your earnings. In addition, it will allow you to sleep at night, ensure you keep as much of your income as the rules allow and ensure that your financial affairs are structured to maximize your personal wealth.

Paying for time and money saving advice is prudent and smart. It is also tax deductible. When you have a sense of value for your own time, you’ll appreciate the fees associated with the competent advice of an expert. If you don’t appreciate the value of your own time, it’s hard to give others credit for theirs.