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🌟Ask An Expert: Time to Save $—The Ultimate Home Service Tax Plan with Robert Gauvreau🌟
Did you know that 92% of business owners pay more tax than they’re legally required to? I’m Robert Gauvreau, founder and CEO of Gauvreau | Accounting, Tax, Law & Advisory, and I’m here to help you ...
Hi Robert, you had mentioned that leaving money in the business vs paying out bonuses at the end of the year could be a good tax strategy. Could I ask if that money could just be left in a high yield savings account or do we need to "show" that it was reinvested into the business? Not sure if my question is clear?
Hey Jaf. Happy to help. There is no requirement to justify what you are investing in. The only needed element is that the entity is a corporation, and that the funds ware not withdrawn personally. A high interest savings account would work. Just a word of caution that all interest is taxable as passive investment income which is high. Another recommended investment option would be purchasing some sort of index fund where you only have to pay tax on the eventual sale assuming there is some type of gain (no tax on the accumulated gain on an annual basis).
