The practice of tax minimization is the lawful minimization of tax liability through sound financial planning techniques. This is the process of ensuring all available tax deductions, structural planning, and transactional timing are planned out and executed.
Some of the tax minimization services we offer consist of the following:
- Income tax planning – The practice of income tax planning is a proactive approach to reviewing a particular individual or businesses tax position to ensure that any current or future income tax issues or concerns are fully understood and any opportunity to mitigate those identified taxes is executed either now or in the future. Some methods of income tax planning involve the review of specific transactions prior to their execution to ensure no unexpected tax liabilities exist, discussions and analysis with clients based on their current year results and the expected tax outcome of such results, and review of business structures to ensure that the most tax efficient structure are in place at all times.
- Income splitting – A Canadian taxpayer’s income tax bracket and therefore the income tax liability depends on the absolute amount of the taxpayer’s income because the higher the income the higher the income tax bracket and the percentage of income tax paid. Income splitting is a tax planning strategy whereby one taxpayer transfers a portion of his or her own income to another taxpayer who is taxed at a lower tax rate. There are various income splitting techniques that can be used, and we work closely with our clients to ensure any available income splitting opportunities are utilized.
- Owner manager remuneration – As a business owner, you have many different options for being compensated for your efforts and investment risk incurred. Such options include, but are not limited to, salary, dividends and other taxable benefits. Not only do business owners need to determine which method is best for their individual purposes, it is imperative that such compensation plans be assessed for any change in circumstance and also be updated to address changes in legislation. We work closely with our clients to ensure that remuneration is set up in a way that creates the most available after tax cash in the pockets of the owners. On an annual basis we review such compensation plans with the business owner to ensure we continually take advantage of the best compensation plan available for the business owner’s unique circumstances.