Tax Planning – Helping Clients Maximize Their Financial Success

Once the professional has optimized its practice and begins to or has achieved accelerated business growth, what elements should be considered in order to meet their financial goals? Without a carefully considered tax plan, that hard-earned income could be depleted by high tax obligations. Unfortunately, managing a medical or dental business is time-consuming, and effectively navigating the complex and ever-changing tax codes is typically beyond the capacity and skill sets of most care providers.

It is critical to consult a trusted law firm that is knowledgeable in the healthcare industy as well as tax law to ensure that you retain as much of your wealth as possible while complying with necessary rules and regulations. MÉDICALOI can evaluate the needs of your practice and assist you with tax planning, from optimizing your current tax situation to providing guidance on special tax considerations involved in succession and estate planning. Contact our Montreal law firm today for practical advice on tax planning strategies that can benefit your business.

Let’s Talk Deductions!

Identifying all available deductions is a key component of tax planning. Deductions diminish a healthcare professional’s overall taxable income, thereby decreasing the percentage of taxes. A wide variety of deductions exist within the tax code, however it is important to be able to identify which deductions are applicable to the professional’s situation. Maintaining accurate records of your practice-related expenses throughout the year is essential to pinpointing potential deductions. These detailed records also protect you in the event of a government audit.

Below are non-exhaustive examples of corporate expenses that you may deduct from your income:

Licensing fees
Professional fees and dues
Professional insurance premiums
Costs for continued education and training
Home office expenses

Let’s Explore a Few Advantages of Incorporating Your Professional Practice:

The taxes paid by a sole proprietor of a business in Quebec can be exceedingly high. Astonishingly, the tax rate for the income of a healthcare professional who is not incorporated can surpass 50%. Incorporating your practice can significantly reduce your overall tax obligation as corporate business income is taxed at a considerably lower rate. Depending on your circumstances, you may also be able to avail yourself of other tax-reducing benefits of incorporation, such as income-splitting.

However, it is necessary to carefully evaluate your overall financial situation and goals prior to incorporating your practice. Corporations are heavily regulated, require considerable planning and regular maintenance, which adds extra costs to your business. Consequently, it creates a need for a dedicated tax professional to ensure that the taxes are completed and filed in the prescribed manner. Healthcare professionals must weigh the added expenses related to incorporation against the potential tax benefits to determine whether it is advantageous to restructure their practice.

Healthcare Professionals Looking To Operate a Business?

Tax planning is a highly individualized endeavor. While we aren’t an accounting firm, our team will evaluate your personal and professional financial situations and objective in order to develop a greater understanding of your circumstances. This evaluation, coupled with an in-depth study of your investments, retirement plans, and other relevant information, will allow us to design a personalized plan that optimizes your tax position and minimizes tax liability.

As part of our planning process, we will ascertain your eligibility for many methods of reducing your taxable income, including, but not limited to, the following:

Maximizing contributions to Registered Retirement Savings Plans (RRSPs)
Investing excess income in Tax-Free Savings Accounts (TFSAs)
Setting up a Health Spending Account (HSA) or Flexible Spending Account (FSA)
Leveraging structures and diversifying for tax-efficient investment
Utilizing small business deductions
Investing in tax-exempt life insurance policies
Making charitable donations
Applying for Capital Cost Allowance (CCA) on equipment purchases
Setting up an Individual Pension Plan (IPP)

Healthcare Professionals Face:

Federal and provincial tax laws are updated annually, and these changes may significantly impact your tax planning strategies. Working with lawyers and tax advisors who can keep you informed of the newest regulations and help you revise your business plan to meet your goals and satisfy compliance standards is crucial. Integrating flexibility into a business’s tax strategy is vital to maximizing savings. Therefore, our firm engages in tailor-made tax planning that can be adapted as your career advances and your financial circumstances evolve.

When people think of taxes, they tend to focus on yearly income taxes. However, the guidance of a knowledgeable tax professional can be crucial at many points during the course of your career. If you are considering any of the following actions, consulting a firm that is well-versed in tax is strongly recommended:

Buying or selling a clinic or practice
Investing in property or stocks
Planning for retirement
Adding or removing a partner
Transitioning to a new stage of your personal life, such as marriage, divorce, or the birth of a child
Engaging in estate planning
Passing your practice to associates or family members

Why Should You Choose MÉDICALOI?

MÉDICALOI integrates effective tax planning as part of an overall medical business plan that supports your career growth and goals. Our legal team has extensive knowledge of the tax challenges faced by healthcare professionals, and we have fostered connections with financial advisors and tax professionals who can bring their considerable experience to bear the table during the process.

Financial stability is fundamental to the success of your business, and careful tax planning strategies that are customized to your personal circumstances can play a key role in minimizing your tax liability. Contact Médicaloi today at (438) 805-5515 to schedule a comprehensive complimentary meeting and learn how we can help you