Top 5 Tax-saving Techniques for Corporate Investment

As you are investing a significant amount of money in your business, you need thoughtful planning and a smart approach to save those extra taxes on your investments. While some investors make the best out of their corporate investments by implementing tax-saving strategies, others need help understanding the corporate investing strategy and end up paying high taxes to the government.

For investors who want to maximise their returns, here are five corporate investing techniques to lower their investment taxes:

1). Make the best use of corporate class funds for better return:

Corporate class mutual funds are intelligent strategies that allow you to get your money back with no tax to pay. Not only does it save you from paying taxes, it also increases the capital gains when you decide to sell them. Everything good thing comes with a price, and so do corporate class funds. Corporate-class funds usually have higher fees than regular funds, so investing all your savings in corporate-class funds is not a good idea.

2). Dividends can save you those extra dollars:

Little savings can make a big difference, and it will reflect in your bottom line. Replace your salary with dividends and see the results. When you pay yourself a reward, it will protect you from paying to the Canada Pension plan. Thus, it makes it an ideal strategy for corporate investing

3). Use your corporate returns to pay your life insurance:

Ensure that your company pays for all your life insurance policies. It is the best strategy a business owner can use to help create a tax-free account.

It secures you and your family from paying hefty dollars in the form of government taxes. Consider corporately owned life insurance to leverage benefits from the Canadian Government’s tax-free programs. 

4). Focus on capital gain-yielding accounts:

Make sure you invest your corporate savings in the right place. Capital-gain-yielding investments such as real estate and stocks are taxed more reasonably than dividends and interest-based income. Use tax-sheltered accounts or tax-free savings accounts (TFSA) to maximise your return on investment. RRSP( Registered retirement savings plan) can also help eliminate the tax burden. Although it is a high-risk game, you must pay attention to the benefits you get from investing in capital-gain-producing accounts.

5). Invest your money where it won’t be taxed:

Mortgage investment or private lending can turn out to be a game changer. With principal residence being the best tax shelter option for corporate investors, there are other tax-saving investment options which you can consider to get maximum profit.

Endnote:

Whatever strategies you choose to undertake, consider the drawbacks and risks involved in each of them. Be sure to seek suggestions from your professional tax advisor before taking any decision, as it can significantly impact your return on investment. 

Although you can lower your investment taxes using the above corporate investing strategies, you can’t completely ignore the government taxes to accomplish your investment goals. With many investment options available, from private lending, and mortgage investment to mutual funds, one can increase their bottom line for a secured future after retirement.