Research shows that entrepreneurs have been historically stressed. There’s a lot to handle between running companies, scaling businesses, and worrying about the bottom line. Add constantly changing tax laws and the end-of-year can be overwhelming—not to mention costly.
That’s why partnering with trusted accountants and business advisors can help. If your business is profitable, professionals can help you keep more of that wealth come tax time.
In partnership with Manning Elliott, we explore how proactive businesses can navigate changing legislation and economic trends with the help of an advisor.
“There really isn’t a one size fits all solution,” says Gurdev Chandi, senior manager from Manning Elliott’s private company group. “How you grow your wealth depends on several factors.”
All business decisions can have tax implications
Whether you’re making an investment decision directly related to your business or a life decision that seems unrelated to work, those choices can directly impact your company. Chandi says he’s seen all kinds of situations where family decisions such as marriage, divorce, retirement or moving, have resulted in tax implications for a business. He’s also seen many instances where a “cool idea” like house flipping can have hidden costs leaving whoever initiated the idea scrambling on how they’d pay for those costs at year-end.
“We assist with that accountability piece and truly understand the tax implications of those decisions,” he says. “On paper, something may look like a great opportunity, but in reality, the tax implications of doing that are very different.”
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Meanwhile, he adds, even if your fiscal year is different than the calendar year, not having everything aligned and organized can affect your bottom line.
“If you’re not proactive, then you’ve lost the opportunity to make decisions that will affect your personal taxes in that calendar year,” he says. “One strategy to keeping more money is to take losses to offset other gains, but you can’t do that unless you talk to advisors well before December to make that call.”
Changing tax rules
The Canadian government can propose changes to the Income Tax Act every year, along with introducing new filing requirements, changing real estate rules and other general procedures. If you’re unable to keep up or are unaware of a specific change, it can cost you in tax penalties.
Chandi says many of his clients have an in-house accountant, but they use Manning Elliott to sort out the nuances of key items like capital gains, cash management, or interest rates.
“The rules change so often that if you’re relying on someone who just calls themselves an accountant to give you the best advice, there’s a chance you will be burned by that decision,” he says. “Our advisors assist with multiple industries and multiple businesses, so you’re getting a more in-depth perspective.”
A unique approach
It’s essential to strategize for your unique needs to maximize wealth creation. Whether you’re considering deferring taxes, leaving wealth in an operating business, or creating a holding company, a business advisor can help pave a customized path.
Chandi says Manning Elliott offers an individual approach to your business by working with different experts within the firm.
“We work closely with key members of an advisor group, usually an accountant and investment advisor, as well as a lawyer, to see the numbers and coordinate between the team,” he adds. “We can look at the strategies and their tax implications to maximize your wealth.”
For more information visit Manning Elliott.