It starts with making sure that your business is set up right to begin with. In the 15 years that we’ve been in business, we’ve seen several incidents where thousands of dollars were lost because a business was not set up to operate tax efficiently. So, making sure the company formation is right is always the first step in tax planning.
Then, once you’re set up appropriately, it’s important to not lose sight of the big picture! Your profits are just one part of a larger financial process. Profits must be preserved, budgeted into cash, and then converted into assets.
And finally, as a part of the process, taxes should be lowered through Income Splitting, Deferrals, Reductions, and Eliminations. These four categories are an excellent learning matrix to organize and “mentally file” your knowledge of tax planning.