Net Worth Network

To incorporate or not, that is the question

Date: 18 May 2008 | Comments Off
Category: Real estate, Building your business, Entrepreneurs, Taxes

I have recently been taking steps to start on my path of financial freedom through real estate. My goal is to own several positive cash flow properties within B.C. and to also branch out of province too (Winnipeg is looking very attractive right now). The question that I really have unanswered is to whether to incorporate a company dedicated to acquiring rental properties. Using a property management company to manage those properties is also part of the plan. The flipside of the coin would be to personally acquire the properties while still using a property management company to take care of them for me.

There’s many reasons to choose either option. Tax considerations are the most important, but also the most complicated. I know of investors that do it all on their own, as well as investors that incorporate and run these properties through their businesses. Those who choose not to incorporate have had an easier time acquiring financing and since they have full time careers, have used the write offs to reduce their income. Others who have chosen to start a business tell me that their tax rate is much lower.

As an aspiring investor who still has not found the accountant that really specializes in real estate investments, this seems like a very important yet difficult question to answer. I will continue to educate myself as well as seek out advice in this area and will make my decision soon, as I want to keep making baby steps towards my goal of substantially increasing my net worth.

Trying to find the right accountant for us

Date: 18 February 2008 | No Comments »
Category: Finances, Taxes

My wife and I are in the midst of trying to find someone to help guide our decision making when it comes to taxes. We both have some interesting personal and business taxation questions and are hoping to find the right person to get the most out of our situations. It is our goal to maximize every deduction possible (as is everyone’s goal I guess) but also to educate ourselves as to what we can do in the future on our own.

This past year my wife has become self-employed as she has started a home based business (licensed daycare). We finished off our basement to make way for the “crazy-zone” and I believe that there are opportunities for writing off some of the construction costs and furniture for the daycare. Along with those deductions, we will also be looking to write off a percentage of the mortgage interest for the square footage designated for the daycare. Along with that my wife also has another home based business that she runs dedicated to the designing of personal cards and invitations (www.butterflybabydesigns.com). We have already used this business to lower our tax burden in the past.

For myself, I have been making interest only payments on a HELOC for a real estate investment (for more details read my last post). I will be looking to write those off as well. As for the future, I will be pondering the idea of turning this blog into a corporation for the tax benefits.

Along with all of these considerations, there’s also our RRSP’s and investment portfolios to account for at tax times. We would want to ensure that our accountant would be using every possible tax break to our advantage.

So, I’ve done some research online to get a good gut feel for the type of questions I should ask each of the CGA’s that we will talk with to figure out who should get us on the straight and narrow. One of the sites that I came across was www.taxtips.ca. It was full of insightful tips as well as links to other helpful sites. After all this reading I now feel much more comfortable in my search. I’ll update our search in future posts.

Canadian tax deadlines for December

Date: 1 January 2008 | No Comments »
Category: Taxes

The CBC website has a good overview of some of the major December tax deadlines for Canadians.

Here are some of the key dates for late 2007 and early 2008:

31 December 2007. Last day that charitable and political donations can be included on your 2007 return; all payments for these purposes must be concluded by the end of the year.
29 February 2008. Last day for RRSP contributions for your 2007 return.
30 April 2008. Final day for filing your 2007 personal tax return.

Check out the original article for a full list of the deadlines.

Net Worth Network

Archive: Taxes

To incorporate or not, that is the question

Trying to find the right accountant for us

Canadian tax deadlines for December

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