Small Business Tax Tips For Saving Money In Taxes #Best Education Page #Online Earning

hey guys Stefan here from

projectlifemastery.com and this video

I'm going to talk to you about the

subject of taxes someone recently sent

me a question asking about taxes

of advice about taxes and share a little

bit about what I learned over the last

few years as a business owner and

entrepreneur about taxes and I feel like

I could share a little bit about this I

don't feel like I'm an expert on the on

this in any way obviously gonna want to

consult with an accountant talk to

someone that is related to your own

personal situation your personal

business country state province wherever

you live in the world because obviously

the laws and the situations and

circumstances are going to be different

based on each individual watching this

video okay but I will share a few pieces

of advice that I've learned okay number

one first piece is that you have to

learn taxes if you're gonna be someone

that is planning on making a lot of

money in this lifetime you want to be

someone that's gonna make six figures or

seven figures or more than understand

and accept the fact that you're gonna

have to learn about taxes okay it's not

the most sexy or interesting subject

that business owners want to learn about

right I much rather learn about

marketing or some cool like business you

know strategy or trick to make me more

money and stuff like that but if you

don't learn about taxes then it's gonna

cost you in the long run because a lot

of people are so much more focused on

making more money making more money in

their business by marketing more or

launching new products or new businesses

whatever it is but they don't realize

that in many ways you can make more

money by eliminating how much you spend

on taxes okay if you can cut your taxes

back or tax bill back and save a lot of

money then that's gonna make a bigger

difference in your business than almost

anything else more than just trying to

make more money so understanding taxes

how it works and mastering it to some

degree is extremely important for every

business owner out there and you can't

just expect an accountant to do

everything for you yes you can hire them

you can hire them to do your tax returns

you can hire them to give you advice or

whatever it is but as a business owner

to some degree you still have to learn

and have the basic understandings of

your situation and about tax

how they affect you okay so that's

really my first piece of advice pick up

a good book about taxes in your country

in your city or province or state

whatever might be learn a little bit

about it okay and really as time goes on

as you start making more money the

longer that you're in business you're

gonna learn more about taxes and

accountant accounting all this sort of

stuff as time goes on and I've been in

business for eight years now since I was

21 years old and I'm still learning

there's still so much I didn't know

before and there's still so much to

learn but I keep learning every single

year I keep talking to my accountants I

keep talking to other entrepreneurs and

business owners and doing my research

and learning as much as I can okay so

that's really the first piece of advice

that I have for you the second piece is

to find and hire a really good

accountant okay every business owner

needs a really really good accountant

okay now the crazy weird thing is is

that most business owners when they

first started business obviously most

business owners don't have a lot of

money or aren't really making a lot of

money to start with and so the weird

thing is is you know obviously a new

business owners can't really afford the

best accountants out there because the

best ones you know only people that are

making a lot of money can write people

that you know have big multi-million

dollar businesses they're the ones that

are hiring the top ones and know all the

ins and outs all the little secrets the

loopholes all that sort of stuff that

you can benefit from so you know I

understand you know money is a little

bit tight especially at the beginning

stages of your business but you still

need to find one okay you can find tax

accountants that you know aren't that

expensive that can help you with your

tax return or give you certain advice

that that isn't again super expensive

okay so you need to find one and many

ways think about an accountant almost

like a coach okay yes you're gonna pay

them for their advice on your situation

but the the the knowledge the experience

the wisdom everything they're gonna

learn from that accountant is gonna

benefit you for years and years and

years to come

if you can gather a few pieces of advice

about your business or tax situation

from an accountant that can save you a

little bit of money in the short term

really you've got to put the value on

that advice over the long term because

that little piece of advice is going to

give you could help save you hundreds of

thousands or

dollars down the road so you have to

really you know not be afraid to invest

in coaching an accountant in many ways

can be a coach as well and to have some

good people like that in your life you

know for me accountant and a lawyer very

important people to have as a business

owner because you know for me if there's

anything that comes up I asked my

accountant I'll ask them before I make a

big purchase on certain things you know

our consult with them on a variety of

things as well and recently a lawyer

also so you need to have those people in

your life and it's just great to have

that any time that you have lingering

questions about your situation or tax

situation okay so those are my top two

pieces of advice okay master taxes learn

about it read a book on it do what you

can and learn as you go higher and find

a good accountant that can help you year

after year as your business grows as

your financial situation grows as well

third piece is make sure that you have

really good accounting and bookkeeping

okay bookkeeping is something that most

new business owners aren't really aware

of when it gets started but again it's

another thing you have to learn and be

on top of as a necessity as a business

owner bookkeeping basically means

tracking all of your income and

expenditures on a month-to-month basis

preferably on a week-to-week basis

it's basically tracking everything that

you know your income that your company

is accumulating as well as the expenses

all the business expenses that you might

have your business as well as any assets

that your company might have such as

computers or equipment or vehicles these

are all assets okay that has to be

recorded under a company as well and

when you have really good books in your

business not only does that really help

you as an entrepreneur to see exactly

your cash flow to see you know where

your your your income your profits going

all that sort of stuff in your business

but it also helps you at the end of the

year to do your income taxes because you

can just give that to an accountant and

it's not gonna cost you as much down the

road for that in order to do good

bookkeeping you're gonna need a good

piece of software I use QuickBooks just

the online version of it where you can

basically you know the software that

allows you to put in and link it with

our bank accounts or credit cards you

know PayPal all

sort of stuff so you can track

everything in detail you can start off

doing it yourself okay as a new business

owner or eventually you want to hire a

bookkeeper for you

a lot of accountants can do this or you

can actually find bookkeepers that work

with accountants as well and you know I

remember and I first started the

bookkeeping on my company I actually

went on oDesk which is now up were calm

and I found a bookkeeper in the

Philippines I think for like $4 an hour

that would do all the books for my

business until it got to a point where I

have multiple companies now and I have

more of an in-house bookkeeper and a

whole firm that I work with now which

makes my life a little bit easier so

eventually you know you again you could

start off doing it yourself if you want

to save money eventually you could hire

a bookkeeper to do a lot of this stuff

for you

of course it can be beneficial again as

a business owner to do some of this

stuff yourself so you can learn the

ropes understand it and then at a

certain point you can hand it off to

someone down the road okay but just

having really good books keeping track

and records of all this sort of stuff is

another very very important thing that

every business owner needs to do the

fourth piece of advice that I have which

kind of ties into the third is just

keeping really good records of

everything in your business now

depending on where you live in the world

your country you know the government

will audit you if let's say you're not

paying your taxes or maybe it's just a

random audit or you're not following the

rules so they you know they question

something that you did on your tax

return I understand the government can

always audit you just to make sure that

everything's accurate and if it's not

accurate then they can come after you

for more money or they you know you

might have to pay interest or penalties

on certain things and so making sure

everything is really accurate and your

business is very important here in

Canada the government of CRA can go back

at least six years okay about six years

in your business I believe to insure and

audit anything that happened within

those six years now let's say you know

you're in the sixth year of your

business and you know the government

decides they want to audit you and they

want to go back six years ago there's no

way no way that you're gonna remember

everything all the transactions all the

expenses and income that you had six

years before and so that's why if you

can

record everything the best that you can

and just track all the more you know the

most important things in your business

maybe by keeping a journal then that's

one of the most useful ways that you can

prevent anything from happening or you

having to incur any fees or penalties or

interest if they do audit you okay so

basically my fourth point is just keep

really good track of things keep a

journal in your business record things

the best that you can so if you have a

vehicle in your business you got to be

recording you know the kilometres or the

miles that you've been traveling the gas

you know you know where you're traveling

- keeping track of all this stuff is

only going to benefit you down the road

if you do get audited because you can

just provide the information to the

government and it's just gonna make your

life that much easier okay again these

are things that nobody wants to do in

business but you're almost required to

do and if you can get in a habit of

doing these things now in your business

it's gonna benefit you for years and

years to come okay another thing as well

is really make sure that you you know

the best corporate situation the company

situation that you should be in in your

business okay so for example here in

Canada and I can only use really Canada

as an example because I don't live in

the United States or Europe or these

other countries I'm not really familiar

with the you know the tax situation and

the each government but here in Canada

you know there's being a sole proprietor

okay there's being a partnership and

there's also having a corporation okay

anytime you operate as a sole proprietor

which basically means that your your

business is yourself you don't actually

have a company name or anything you're

just reporting any income that you're

making in your business as

self-employment income if you're

operating as a sole proprietor then I

understand that there's different

liability to that and there's also which

basically means there's risk to that

which you know if if creditors or you

know people want to sue you or come

after you that you can go after your

personal assets are not protected in any

way and also your tax situation is going

to change too because if you are a sole

proprietor you might be picked you know

paying more in taxes understanding that

is very very important or if you're a

partnership which basically means you

have a partner you're both

kind of sole proprietors and that way or

if you have a corporation which is a

separate entity okay which are protected

behind which is the entirely different

separate from you okay so you know for

example project life mastery Inc

incorporated is a separate entity okay

than me and project life mastery has its

own bank accounts and makes money and

you know if anything happens there where

someone Sue's project life mastery or a

creditor whatever they can't come after

me personally if you have to go after

project life mastery okay now the reason

why I bring this up is it's really

important to understand the the company

structures in your current location to

see which is the best option for you and

which has the best tax advantages for

you as well I understand in the United

States there's LLC limited liability

corporations and there's totally

different types you know depending again

depending where you are in the world but

understanding this is crucial and the

reason is I'll give you my personal

example is that here in Canada if you

make you know a certain amount of money

okay let's say somewhere in the

six-figure range and you know let's say

it's over one hundred twenty-five

thousand dollars a year then what

happens is you go in the highest tax

bracket which you know in British

Columbia it's I think about forty three

percent okay so any money that you're

making and you're making over one

hundred twenty five thousand dollars

then you're subject to paying about

forty three percent of that income taxes

to the government okay which is pretty

hefty but if you have a corporation in

Canada then there's something called a

small business deduction okay which is

about within five hundred thousand

dollars if your business makes that then

you're in a tax bracket you're only

taxable I believe like sixteen percent

don't quote me on the numbers you know

it changes all the time but it's it's in

that range was sixteen percent within

the first five hundred thousand dollars

they're only paying about sixteen

percent taxes on now if you were a sole

proprietor making $500,000 we'd be taxed

at forty three percent making that

personally but if you have a corporation

you're only taxed within those five

hundred thousand dollars sixteen percent

so you're taxed entirely differently

based on you know the company structure

that you've set up in your country okay

so that's a really important thing also

how you pay yourself is if there

important as well again here in Canada

there's options such as paying yourself

a salary or paying yourself a dividend

okay paying yourself a salary basically

means you're an employee you're on the

payroll for that corporation so you know

every two weeks that corporations gonna

pay you a paycheck right even though

you're the CEO you're the owner of the

company you're still basically an

employee of it and you're getting paid a

salary every two weeks now whenever you

get paid a salary there are some more

expenses in that because you know you

have to pay into e aí which is

employment insurance you have to pay

into the Canadian pension plan and a few

other things as well and so in many ways

when you're paying a salary you also

have to pay some additional things as

well that the government requires but

the other thing as well of paying

yourself a salary is that you get taxed

on it when you ever anytime you earn a

salary in Canada you get paid a t4 slip

you get sent from your employer every

year then you get taxed at your marginal

tax rate so if you're again if you're

making over 125,000 and you're getting

taxed at 43% and you're getting paid a

salary more than that then you're gonna

get taxed around 43% so I'm gonna attest

very heavily on that but if a company a

corporation is paying you a dividend

okay I didn't then basically get tax

less than that here in Canada okay and

it depends if it's an eligible dividend

or a non eligible dividend eligible

basically means that it's from a public

corporation and non angel' eligible

basically means from a private

corporation so for example project life

mastery it's a small business it's a

private corporation so it's a non

eligible dividend if I buy like a stock

you know buy shares from you know a

stock in Canada let's say and that's in

this a public company then it's an

eligible dividend and I'm gonna pay even

less taxes on that okay so these are all

really important things to understand I

don't want to go over anyone's head

because again the situations are so

different for everybody but

understanding the best way to get paid

because sometimes it's beneficial to get

paid a dividend from the company other

times it's beneficial to get paid you

know a salary and the reason is is that

when your company pays you a salary then

that salary can be a business deduction

you know because anything more than

$500,000 you're making in the company

you're gonna get taxed at a higher tax

bracket in your company and you know so

pink didn't pick the salary can lower

your company's expenses to lower the

taxes in your company you know it's

gonna raise your taxes as a personal

person but when you get paid dividends

then that doesn't have any deduction in

your business so I know this is probably

confusing the hell out of you

based on your tax situation or might

might not even be relevant to you

whatsoever and it is a lot of

information it's very dense I'm just

really sharing a lot of stuff that I've

learned over the years that has helped

me but really my point is learn this

stuff

okay learn this stuff if you don't know

what the hell I'm talking about that's

even more of a reason that you need to

learn and understand this stuff you need

to know you know what's the best way to

operate your business sole proprietor

corporation LLC again depending where

you live you could need to understand

what's the best way to pay yourself

what's the best way you know to avoid

paying that you know as much as much

taxes and pay the least amount possible

all of these are very critical things

that you need to know and understand and

I wish I could summarize and give you

guys all the information that I know and

that I've learned over the years but

really you have to do your own due

diligence and learn as you go this is

all stuff I've learned by talking to

accountants reading books researching

talking to the government all this sort

of stuff and again depending where you

live you might have you know the

government might have even certain

things could benefit you such as here in

Canada we have a TFSA

which is a tax-free savings account we

have RRSPs registered retirement savings

plans there's a lot of benefits that

government gives you to help you grow

your assets grow your net worth make

money and pay the least amount possible

in taxes so you want to make sure that

you understand it and you're taking

advantage of all of these things in your

personal life and in your business okay

so I think I've given you guys enough

information on this subject hopefully

you answered that person's question but

you know it's always a bit of a

challenge for me when people ask me tax

advice because usually my advice is

always you know talking to an accountant

you know read books learn as much as you

can because again information is

different based on where you live

and your personal circumstance so making

sure you understand this stuff

especially at the early stages of your

business it's gonna benefit you

significantly down the road okay don't

be ignorant to this stuff

don't just neglect it and someone out

because it seems too complicated or

overwhelming for you you have to learn

this stuff okay it's gonna benefit you

in the long run and in many ways you

might enjoy it you know find a way to

enjoy the process of learning this stuff

because you know in many ways I used to

dread taxes but now I kind of enjoy

learning about it because I feel like

all the information that I have is

giving me a benefit over other business

owners and helping me grow my business

down the road and I'll give you one last

piece okay one last final piece of

advice because I know a lot of people

hate paying taxes and have a really

negative mindset around it really

everybody has to pay taxes okay you you

can't really get over that if you want

to live in a certain country be a

resident of it you're gonna have to you

know accept the tax laws that they have

in that company but what you can control

them is your belief system about that

and what I've learned is that you have

to really reframe how you view taxes for

me

I view taxes as a good thing because one

it's supporting my country and

supporting the local economy it you know

in Canada when I look at the roads when

I look at the buildings when I look at

all the things that have been

established and built that I get a

benefit from everyday by living in that

country I feel so grateful for that

because none of that stuff would be

possible if it wasn't for the millions

of people before me that had contributed

and paid taxes to be able to be able to

build such an incredible country and

city that I get to be blessed to be a

part of you know including the police

the ambulance the military all of these

things are things that you get a benefit

from by living in the country that other

people have contributed before you okay

so be grateful for that and be

appreciative of it and really just think

about taxes as a contribution every year

you're giving a contribution to your

country to your government to your state

to your province to your city that

you're contributing to that

okay and we all need a sense of

contribution in your lives so might as

well associate to the contribution that

you're giving which is taxes and change

your belief and mindset about it and I

think that's the most important thing

that I could share with you is just

change the way that you view it and stop

dreading it and really just learn

everything you can to pay the least

amount possible still pay your taxes but

just keep moving forward and making more

money because the more money you can

make the more you have to give to your

government to your country to yourself

to your family to your friends and to

the world

that's really what you're making the

money for is to grow and to give so

hopefully you guys enjoyed this video

and I'll see you in the next one

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