Want to open a food restaurant but worried about the long list of taxes? Don’t worry because there are numerous ways in which the corporate tax can be reduced, and the company’s money can be saved. Running a successful restaurant business has never been easy. It requires too much effort, hard work, a big bank account, and a clever active mind.
While owning a restaurant, one makes sure to cut on all the extra costs and save expenses as much as possible. Here managing taxes can also be one of the significant steps to let you lead a successful business.
Have a look at these 10 best ways to reduce and save your corporate tax.
1. Making your Spouse a Shareholder
The first and most legal way to reduce the corporate tax is to hire your family member or make your lower-income spouse a shareholder. Whether your spouse is working and is acquiring fundamentally short of what you are through your business, it’s as yet worthwhile to deliver profits to your life partner since you will diminish your family’s general taxation rate given that You are in a higher tax bracket than your spouse.
2. Giving away charities
Another way to save your tax for restaurants operating in Canada is by giving modest charities. There is a law in Canada that says that businesses that give donations to registered charities can note down the entire amount as a cost as long as the organization is productive and can benefit from it. So all the charities that you give can also help you save your corporate tax.
3. Food costs and beverages
Now owning a restaurant, you can work very smartly and deduct a few expenses to reduce your corporate tax.
4. Hiring a Toronto tax accountant
The Toronto accounting firm has the best Toronto tax accountant who creates great strategies to lower tax liabilities in businesses and maximize profits. The Toronto accounting firm handles everything smoothly, and the business accountant gives professional advice that helps avoid mistakes as well.
5. Including rental costs in expenses
The fifth way to reduce your corporate tax is to include the rental cost of your restaurant in Canada and all the maintenance expenses for the place and possessions like the repairs, cleaning service, and utilities in expenses to lower your corporate tax payable.
6. Getting in touch with a business accountant
The other important element is to get in touch with a business accountant who can analyze all the restaurant’s finances so the owner can make better decisions; it also helps to reduce the cost of irrelevant stuff. Small business accountants also help to reduce taxes wisely.
7. Marketing and advertising expenses
A restaurant business can claim all the marketing expenses like flyers, website, ads on social media, and all paid advertising as their expenses and can reduce the tax.
8. Claiming the hidden cost
Many hidden costs are included in a restaurant business. For example, your moving cost, the fuel used for food delivery purposes, the storage fees, the vehicle cost, etc., all such related costs can be claimed, which helps to lower your tax. This can be done best by a business accountant or a tax accountant who can help you save your money by identifying all small areas through which you can save a large amount of tax.
9. Employee expenses
A business accountant can help the restaurant owner reduce the corporate tax by placing all the employee salaries, insurance, vacation pay, bonuses, and retirement accounts into expenses. These can be covered for all the cooks, hosts, waiters, managers, dishwashers, bartenders and anyone who is part of the restaurant.
10. Write off losses
Last but not least is to write off all the losses. This is one of the major ways to reduce your tax.
Frequently Asked Questions
What kind of food costs is tax-deductible?
These expenses include the cost of food and beverages, including bottled water and all the kitchen utensils and appliances, etc., hence reducing your taxes.
Can I write off losses due to situations out of my control?
If you ever had a robbery at your restaurant or a non-paying client or went through a capital loss, all these can be included as legitimate tax deductions.
What are employee expenses tax-deductible?
Insurance, vacation pay, bonuses, and retirement accounts into expenses. Annual employee gifts of up to $25 can also come under this.
Why should I hire a tax accountant?
It is important to hire a Toronto tax accountant who can help in all tax-related matters, saving all extra costs and helping to identify the allowances and exemptions.
Would making my spouse a shareholder help me save tax?
As an investor of your organization, your partner can get up to $40,000 tax-exempted profits annually, given that your companion doesn’t have some other kind of revenue.
Bottom line
Owning a business is never a cup of tea, and the restaurant business is one of the most expensive and competitive businesses in Canada. So you should do enough research to determine and calculate how you can cut on these costs and save a higher amount of your hard-earned money. These tax-saving tips can boost your restaurant business. It’s high time that you play smartly too and cleverly manage all your tax requirements from the tax authorities in Canada.