TAX PLANNING WITH THE EMPLOYED

Employees don’t get nearly as many options to save tax as the Self-Employed or Business Owners. Employed individuals get taxed earlier and more than the Self-Employed.

Here are some ways that the employee can save on tax:

1.       Do everything you can to lower your withholding tax.  Many people are happy when they receive a tax refund after doing their taxes.  The problem though with receiving a refund in the following year is that CRA has held on to your money for all that time without paying any interest.  To lower your withholding taxes fill out a TD1 or a T1213.

2.       Set-up a Home-Based Business.  This will allow the employee to deduct some of the expenses they normally pay for anyway, such as portions of their homes, vehicle, phone, computer, etc.  Home-based businesses also give you tax deductions in the beginning and give you cash flow later on.

3.       Utilize Job Works.  Job Works Inc. is a business that is set up to legally transition employees into Business Owners for the purpose of saving taxes and increasing take home pay.  It does this by setting up employees with Corporations, and allowing the client, formerly the employer, to pay Job Works, and Job Works to pay the newly set up Corporation. 

For more information on Job Works, please contact me through email at info@kustomdesign.ca.