While other tax preparers completely ignore them, we actually believe that personal income taxes are a critical part of the service we provide our clients. This is true even when you’re running a huge corporation.
It seems very counterintuitive that the personal taxes (which often take less than an hour and cost a tiny fraction of the fees for a corporation) are so much more important than all of the corporate work we do, but it’s true. While the actual completion of our corporate clients’ personal tax returns is often far simpler than the corporate taxes, we cannot understate the importance of properly planning how the personal taxes will look, well in advance of ever filing them.
The crucial thing to understand is that the only way your corporation can save you any tax in the grand scheme of things is by very careful management of your actual drawings from the company. Those drawings appear on your personal tax return, so if you’re not considering the integrated effect of your drawings (salary, dividends, or whatever you call them), you would have to be extremely lucky to have your taxes truly optimized. This is a highly personal situation, and it is entirely possible that we would advise you to act in a certain way, but tell your friend to do something completely different.
We usually spend at least a few hours helping clients determine exactly what’s best for them and why; there is just no easy way to cover all of the nuances on a website (or at least on a website you’d enjoy reading), so we very strongly recommend that you book an appointment with us to discuss your specific situation and work out a tax plan that is best for you.