A Choice in Paying Your Taxes

Many people think they have no choice regarding paying taxes but that is simply not true. There are many choices: some have immediate consequences and some are very much delayed.

I know one individual who started a corporation when he was relatively young by building rental properties: duplexes, fourplexes and sixplexes. This individual built them by himself. He had no employees or help from anyone. He never received a wage from his company and therefore his properties were valued only at the purchase price of the land and his material cost. His annual income for well over forty years always hovered around the poverty level. However, when it was time for him to retire he began to sell off his properties and now it was time to pay taxes. Forty years of no taxes finally came to an end. He had used proper planning and he reduced his taxes significantly but he still had to write the biggest check he had ever written in his life! This gentleman primarily operated one business model for over forty years. He limited his financial opportunities but he followed a plan that had both immediate and long term, significant consequences. His lifestyle for over half a century never deviated more than 15-20%. The fact that he had only one tax bill at the end of his career was a result that he could live with.

Every choice has consequences. Some of the best choices require a person to think much further down the road than just the next few dotted lines.

I had an Operator come into one of our offices and ask, what can we do to reduce their taxes for last year (as they didn’t like the figure they received from another firm)? My office manager replied with the correct answer: “Probably nothing significant but if you want to reduce next year’s taxes by $10,500.00 or more dollars I can help you with that!” The client didn’t like that answer either and walked out. The funny part to this was that this was not the first time they had come to us. They had walked in last year with the same question and left without doing anything different.

I believe it was Albert Einstein who said: the definition of insanity is “doing the same thing over and over and expecting a different result”.

I have now had the pleasure of writing for Over the Road since 2008. Often I write about items found in my first book wherein I discuss reducing taxes by using the non-taxable benefits available to a wide range of industries (including trucking). The systems I discuss are not for the short term Operator. It’s designed for serious businesses operators.

For those who want to legally reduce their taxes, it is a choice and a discipline that produces phenomenal results. Nearly everyone must be tutored into the system because there is a lot to learn and it has to be done right. However, the return on this time investment has many multiples. It may not guarantee your success as an operator but it greatly reduces one major obstacle…your taxes!

The average Canadian Operator pays between $12,000 and $18,000 in taxes. Tax wise they are in travel status an average of 240-250 days per year. Using non-taxable benefits, they end up only paying taxes between $2,000 and $8,000.

I still have the occasional client who pays a great deal more than $8,000 but it must be said, they also make a great deal more than the average Canadian Operator.

Occasionally I get an operator who thinks it’s my job to eliminate taxes no matter how much they make. Canadian tax laws have a word for that: “incarcerated”. Everyone should pay their fair share of taxes. Using the right system defines the word fair.

About Robert Scheper

Robert D Scheper operates an accounting and consulting firm in Steinbach, Manitoba. He has a Masters Degree in Business Administration and is the author of the Book “Making Your Miles Count: taxes, taxes, taxes” (now available on CD). You can find him at www.thrconsulting.ca and thrconsulting.blogspot.com or at 1-877-987-9787. You can e-mail him at: robert@thrconsulting.ca.