How to Pay Yourself from Your Canadian Small Business

Optimizing combined corporate + personal taxes depends sensitively on draws, income, and dividend-salary mix.  As with all convex mathematical functions, there is only one minimal value that describes the combined taxes in terms of its variables.  Our job is to find the global minimum of this function, that is, we find the point such that f(x0) < f(x) for all in the domain of the function.  Wages decrease corporate taxable income until a specific point that the personal tax obligations outweigh the corporate tax savings. This is an extension of Christian’s Master’s degree thesis in which he developed mathematical optimization algorithms to precisely correct volumes and rates of administration for intravenous medications.  Typical accounting is no match for our assembler-level optimization, optimized data loading and use of the THUT algorithm for computing convolutions.  The most important systems in life are convex in nature, and not linear.  Pity that accounting degrees in Canada don’t cover math advanced leaving accountants with no understanding of nonlinear equations and mathematical optimization algorithms.

Integrated approach. The private owner of TLL Properties Inc. paid $16,000 in taxes net of Canada Child Benefits on a $260,000 income or a proven tax rate of 6%.   This integrated one-stop-shop solution allowed the tax rates to be exploited to the best possible effect and meant that more of the earnings could be retained while adhering strictly to Canadian laws and regulations.  Even Canada’s “leading” firms still mindlessly give out dividends: $100K of dividends (T5) means 26.6% combined corporate + personal taxes. Double taxation occurs due to the decrease in the dividend tax credit.  The top 20% of households in Alberta could save up to $60K in taxes per year.

$1.5 billion. In 2016, THUT announced over $1.5 billion of accounting transactions, with customer annual revenues ranging from $200 thousand to $20 million.  THUT provides complete accounting for Edmonton businesses across a wide variety of industries and leverages extensive experience to deliver the best solutions to our customers.

Success factor: broad expertise. The strategy was to enter Canada at the high end of the market: Alberta’s oil and gas sector, where customers were prepared to pay a premium, and  THUT used that money to develop affordable accounting solutions for other businesses.  In turn, that money was used to develop even more affordable services – driving down the market to higher unit volumes and lower prices with each successive category: Venture, Boutique, Micro-businesses and Holding Companies.  Take advantage that Alberta’s oil and gas enterprises spent millions of dollars to pay for the development to let you outsource your accounting at an affordable rate.  We know you are on a busy schedule.  That’s why our specialists are busy for you. We have 4 packages to choose from.

Saving on tax is legitimate. Our aim is to develop strategies with you that plan for your tax burden and reduce it optimally by exploiting permissible organizational possibilities. Sound tax management brings about results that have a positive effect on today’s balance sheet and thereby increases the value of your company.

“In our profession, precision and perfection are not a dispensable luxury, but a simple necessity.” Niklaus Wirth, Swiss analyst.

THUT Code of Conduct. How we treat our customers and one another.

THUT is committed to further extending its market position.  The basis for this is an outstanding reputation.  Clear virtues and principles determine our daily thoughts and actions.

High performance is the value that represents THUT.

Striving for the highest quality, uncompromising customer service, and continuous further development create the common foundation on which we act when working together.

Our credibility is based on the code.  It sustainably shapes our good name with the public, and therefore also our financial success.

Product Improvement

THUT commits itself to the best quality in its products and thus creates long-term added value for customers.

Customer service

  1. We listen to our customer and give them clear and understandable answers in a friendly manner.
  2. We concentrate on finding solutions for the challenges of our customer.
  3. We support our customer reliably and carry out what we have promised.
  4. We always answer customer questions promptly and simply.

Continuity and maintenance

  1. We efficiently produce error-free work with mechanical precision
  2. We touch things only once: paper, email etc.
  3. We are clear, accurate, and thorough  (high level of detail)
  4. We address every single source document provided by the customer
  5. We do not multi-task or switch between tasks
  6. We are extremely focused and perform our work with interest and commitment
  7. We work in an orderly/systematic manner
  8. We adhere to all relevant laws and regulations, internal directives and rules
  9. We work independently on routine tasks
  10. We are trustworthy, reliable and responsible
  11. We handle with care the information which our customers entrust to us

Quality and performance (for computing tasks)

We concentrate in uninterrupted 90-minute blocks

We only check email twice per day to reduce cognitive residue

Investment in society

THUT policy is directed towards long-term prosperity and ensuring value-adding jobs.  By steadily increasing its profitability, THUT improves the stability of employment.

Swiss quality – available in Canada

Edmonton (Headquarters)

SwissBooks

205-12906 54 Street,

Edmonton, Alberta

Canada T5A 5A8

Phone (780) 761-1688

Email accountants@christianthut.com

Our hours are weekdays 8am to 4pm MTZ

We are located off Yellowhead Trail and 50th Street as a mid-point of accessibility to Canada’s largest hydrocarbon processing region and Alberta’s industrial heartland.

We speak English, German, Arabic, and Vietnamese.

How to reach us

By car: From Yellowhead Hwy or Manning Drive take the 50th street exit.

By public transport: Approx. 5 minutes from Belvedere Station.

 

 

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Why Do More Edmonton-area Nail Salons Choose THUT Accounting Than Anyone Else?

Có nhân viên kiểm tra thuế (auditor) làm ở cơ quan thuế Canada Revenue Agency (CRA) báo cho văn phòng mình biết là:

  1. CRA có nguyên một đội ngủ chuyên kiểm tra lại thuế tất cả các tiệm nail trong vòng 2 năm
  2. Trong đội ngủ này CRA có nhân viên biết tiếng Việt Nam sẻ giúp kiểm tra và thông dich lại những quảng cáo của những tiệm nails đăng trên Thời Báo (Trả bao nhiêu tiền một tháng và trả ăn chia v.v..). Auditor nói CRA sẽ dùng thông tin này để tìm lại số tiền mặt mà các tiệm Nail không khai báo là bao nhiêu.
  3. CRA đã và đang cho người giả xin việc gọi đến từng tiệm Nail và hỏi có trả tiền mặt hay không để báo lên CRA.
  4. CRA đang kiểm tra lại thuế tiệm Nail là vì có nhiều người trong ngành Nail phản ảnh với CRA vụ cách thức tiệm Nail Việt trả tiên cho nhân viên cho nên họ khong thế cạnh tranh được (ví dụ như tiệm Italian va Lebanese v.v.).
  5. Mua một chiếc xe với giá trị 75% hoặc nhiều hơn số tiền thu nhập hàng năm bạn báo sẽ gây ra một cuộc kiểm toán (audit).
  6. Trong một cuộc audit CRA cũng kiểm tra xem làm thế nào bạn có thể trả tiền mortgage của bạn.

CRA có quyền:

  • Tìm hiểu thông tin từ nơi đăng ký xe (Registry Office )mình có bao nhiêu xe và xe gì
  • Lấy thông tin từ ngân hàng (cá nhân lẩn doanh ngiệp) và thông tin mortgage của chủ tiệm nail
  • Và họ lên City of Edmonton website để coi giá trị của căn nhà của bạn

Chúng tôi đề nghị tiệm Nail phải có hệ thống quản lý bán hàng (Point of Sale system) hoặc ghi lại thu nhập , xem Example – Sales Journal – Month of July hoặc liên hệ với văn phòng THUT cho một mẫu để sử dụng.  Tiệm Nail cũng cần ghi lại tiền TIP trả cho nhân viên hàng ngày bởi vì chủ tiệm nail không cần phải trả thuế và GST trên tiền TIP này.  Để biết thêm về hồ sơ thu nhập : English / Vietnamese.

Trong trường hợp nếu bạn bị kiểm tra thuế thì bạn cung cấp cho Auditor bằng báo cáo thu nhập thì bạn không có vấn đề.

Share with someone that could use some advice in this post or save some taxes
For every person you refer we’ll give you a free month or a gift card equal to 1 month of service of your referral – whatever is bigger! Up to to $600!
Anyone you refer gets a free month of bookkeeping!
THUT data capture technology extracts data from bank, credit card and online statements and allows for automatic bank reconciliation.
THUT uses artificial intelligence to locate and extract line item and tax summary data from receipts and exports it into a csv file.
Cleansing algorithms allow it to extracts transactional data that is 100% accurate.
Send us your prior financials and we will prove to you how our value is unrivaled in Canada.
➤➤➤

Bad Accountants & Management Fees

Willkommen to the first article on our series on terrible accountants and what you need to watch out for before they waste your money and time.

There is 1 of 3 ways to pay money out of an operating company:

  1. Repayment of shareholder loan (not an option when they were already repaid)
  2. Dividends based on shareholdings
  3. Management remuneration (based on fair market value of services rendered)

The shareholders of an operating company in Calgary wanted to pay themselves from their operating company in Edmonton (Op Co) and they paid themselves proportional to their shareholdings.  The 50% shareholder in Calgary took 50% of the payout while the 3 shareholders in Edmonton took 16.67% each.  They have done this consistently over the last 2 years.

The Chartered Professional Accountant (CPA) for the Calgary shareholder called yesterday and insisted that I amend 8 corporate tax returns and 14 GST returns to change the dividends to management fees.

I will have no part in such nonsense as the deductibility of management fees is often reviewed by the Canada Revenue Agency.

  1. Management fees must be invoiced detailing the services rendered at a fair market rate. The 50% payout his customer received is 3X the fair market rate of the actual management fees issued to the Op Co by our Edmonton shareholder.  How could this be possible, when the Calgary shareholder is in Calgary running a different Op Co?
  2. You can not simply invoice the Op Co more than a year later for a round $150,000 including GST with no periodic invoices consistent with the payments received.  The invoice should be the rate x the hours and subject to GST.  There should be a service contract between the Op Co and the shareholders and CRA will look for specific proof of how your management fees were determined. This means detailed descriptions of the work performed for the Op Co.
  3. If the Calgary Chartered Professional Accountant (CPA) got his way, anti-avoidance rules will kick in and the $150,000 management fees will be denied along with more than $50,000 in unnecessary taxes + penalties and interest on the avoided tax.  Arm’s-length management fees that do not meet the requirements of the sections of the Income tax Act can lead to double taxation for which no relief is available.
  4. All regrets in life involve wasted time. This is the only thing you can never get back so never waste a second giving people second chances.  Poor choices reveal poor character.

Below is a link to an article written by me detailing the reasons to use a holding company. This is how we can legitimately save taxes without breaking any laws and end up losing more than you ever bargained for.

Our goal at SwissBooks is to secure our customer’s future and the future of their loved ones. Our business offers a comprehensive services to customers.  We will never sacrifice the long-term well-being of our customers for any ill gotten short-term gains.   We will work with you  to minimize your tax obligation, preserve and protect assets for future generations.  Accounting is beautiful a series of debits and credits that must balance.  There is no such thing as bad accounting- only bad accountants.

Like all people with no value, bad CPAs should be avoided at all costs.  Join my personal vendetta against all the bad CPAs in Canada that hide behind their designations or hide behind their high fees. Their customers automatically associate authority based on the high fees they charge. Bad CPAs: please start behaving or I will start lighting you up on this blog.

Upcoming topics for bad accountants:

  1. Inflating expenses to “minimize” your taxesfake accomplishment, will bite you in the end. I know you can not compete with me, but putting your customers at risk by reporting bogus numbers should put you in prison. ($12,000 dollars of office expenses for a little shop that provides a beauty service? How much pens and papers can you buy for $12,000?)
  2. Paying employees as contractors: learn the difference
  3. Encouraging mindless spending to increase tax-write offsfake accomplishment. Congratulations! Your customer pays no tax; they will also be in financial ruin. Only acquire corporate vehicles or leases if they are required for conducting business.  Ferrying kids around to school? Personal. Get familiar with the metrics, keep business – business.
  4. “Investing” under $500,000 in individual stocks: inefficient waste of time. If you could beat my index fund your time is worth more working on Wall-Street.
  5. Franchises: not worth pursuing unless you are the franchisor.

We can’t be responsible for other accountants irresponsibility.  Our responsibility comes from 10 years of delivery quality, completing files on time, servicing memorably and saving our customers far more money in taxes than any small price difference.

Share with someone that could use some advice in this post or save some taxes
For every person you refer we’ll give you a free month or a gift card equal to 1 month of service of your referral – whatever is bigger! Up to to $600!
Anyone you refer gets a free month of bookkeeping!
THUT data capture technology extracts data from bank, credit card and online statements and allows for automatic bank reconciliation.
SwissBooks uses artificial intelligence to locate and extract line item and tax summary data from receipts and exports it into a csv file.
Cleansing algorithms allow it to extracts transactional data that is 100% accurate.
Send us your prior financials and we will prove to you how our value is unrivaled in Canada.
➤➤➤