So let’s be honest, we’re taxed to death in Nova Scotia. And the more you make, the more you pay. Anyone who is sane hates paying tax, but it’s every kind of very illegal to not pay it. As a business owner, you have the opportunity to sneak earnings from your business directly to your pocket and no one is the wiser. Although it is understandable why you might consider doing this, there are good reasons to play by the rules and declare what your business really makes.

Selling Your Business: The first thing a potential buyer will want to see is your financial statements. If your business isn’t making much money, don’t expect to sell it for much.  Buyers want businesses that make money, not businesses with two sets of books. And if you’re a buyer of a business with two sets of books, please call me; I have a lovely piece of land for sale in Honduras.

Growing Your Business: If you want to grow your business by buying a competitor, equipment or buildings, you’re going to need money. Bankers can’t lend you money based on under-the-table earnings; they need to see tax returns and financial statements. Telling your lender you stole money from your company to avoid taxes isn’t going to help the situation, they need to see a business case for lending money.

CRA Isn’t Dumb: Everyone knows of a business owner who brags about how they siphon money from their business. They live in a great big house, drive a great big vehicle, and have a great big boat. There’s a good chance someday you’ll be able to go to a great big tax auction and buy all their stuff really cheap. CRA has been in the tax collection business for a long time and they have lots of methods to follow the money trail. Maybe you get caught in a random audit, or maybe something on your tax return raises suspicion. You’ve heard the expression “like a dog on a bone” – well, that’s how the government feels about money. Unless you plan to live under a rock for the rest of your life, chances are high that the government will eventually find a way to get its money out of you.

If you’re concerned with how much tax you’re paying, talk to an accountant to make sure you are taking advantage of the proper business deductions and tax credits. There are many ways tolegally minimize the amount of tax you pay.