Ep. 097 - Incorporating Your Business, with Cherry Chan

Lifestyle Housing Radio

Key Takeaways: - The biggest tax mistake that people make is they don't incorporate early. - The reasons you may want to incorporate. - Specified investment income and how it's different from an active business. - Money in your pocket today is worth a lot more than the money in ten years. - Different corporate structures and when they might make sense. - Move funds, protect yourself and grow faster with a holding company. - The downsides to using a corporation...and it can be time consuming. - Timing matters My accounting career began in 2003, working as a co-op student for a small accounting firm. I worked long hours and did my due diligence, completing over 200 tax returns in one season. I built a knowledge base on small business taxation and personal tax returns, working on multiple accounting files for doctors and dentists. After two years, I moved into a medium sized firm, which would eventually merge into Deloitte. During my time there I learned various tax planning strategies, compilation, review and audit engagement for small to medium sized companies. In 2006 I wrote the Chartered Accountancy exam and became the only student in the history of the firm to make honour roll. Like many new CAs, I realized I didn’t enjoy auditing as I tried out as many new positions as possible within the accounting field, in an attempt to find my true calling. For a time, I worked as an Operating Manager and Controller, managing over 200 employees in Thailand, as well as a Senior Manager in financial reporting for the largest grocery retailer in Canada. I reached a six-figure salary by the age of 28. Even with all this, I still felt like I hadn’t found my true purpose. I still wasn’t satisfied, and still needed something more. I still sought a greater challenge. It was during one day when I was invited to drive ATVs up north with a group of self-employed individuals; I recall struggling to book time off because my vacation time was limited. However, all the self-employed people simply rearranged their schedules to take time off and were out having fun at the least busy time of the week. It finally dawned on me that I wanted more control over my professional life. I wanted more leisure time for myself. “I need to start my own business!” I thought to myself. This realization lead to three things I knew I had to accomplish: 1. Becoming involved with real estate investing 2. Learning sales and marketing 3. Running my own business Shortly after this life-altering realization, I joined the Rock Star Real Estate team and Mr. Hamilton to learn everything about real estate and marketing. I worked with many investors; discovering that most people rarely understand what options they have in terms of tax reporting and filing. There are so many tax questions out there, yet so few of them are properly answered. It was through the discovery of this problem that I became inspired to challenge myself to provide the solution people needed. Now today, using all my resources and connections, I have dedicated my accounting practice and this blog so that all real estate investors, property managers, contractors, builders and real estate agents may finally receive straight forward answers to all those confusing tax questions. Meet Cherry Chan at www.realestatetaxtips.ca