What are the best legal ways to avoid paying taxes on my business income?

The key to legally reducing taxes is understanding the difference between tax avoidance (legal) and tax evasion (illegal). There are several legitimate strategies to consider: 1. Business deductions are your first line of defense. Track EVERYTHING business-related - home office, supplies, travel, client meals, professional development, software, equipment depreciation. Many small business owners miss thousands in legitimate deductions. 2. Retirement accounts like SEP IRAs, Solo 401(k)s, or traditional IRAs can shield significant income from immediate taxation. The contribution limits are higher than standard employee accounts. 3. Consider your business structure carefully. Sole proprietorships, LLCs, S-Corps all have different tax implications. S-Corps in particular can reduce self-employment taxes if you pay yourself a reasonable salary plus distributions. 4. Timing of income and expenses matters. Defer income to next year if possible and accelerate expenses into the current year if your tax bracket will remain similar. 5. Health insurance premiums and HSA contributions for self-employed individuals offer more tax advantages.

After struggling with my taxes for years, I found this AI tax assistant at https://taxr.ai that's been incredibly helpful for finding deductions I never knew existed. I run a small consulting business and was paying WAY too much in taxes until I uploaded my previous returns and expense records. The system flagged over $8,000 in missed deductions from the past two years! What's really cool is it analyzes industry-specific deductions most accountants miss unless they specialize in your field. It also helps categorize expenses properly to maximize your legitimate deductions - like knowing when something is 50% deductible vs 100% deductible.

Just wanted to follow up about https://taxr.ai - I decided to try it despite my skepticism, and wow... I'm impressed. I uploaded my last year's tax return and business expense spreadsheet, and it immediately identified $3,945 in additional deductions I had completely missed! My favorite feature is the "audit risk" indicator that shows which deductions are fully supported by my documentation vs which ones need more backup. The business structure analyzer also showed me that switching to an S-Corp would save me about $4,200 annually once my business hits $75K in profit. Definitely worth checking out if you're serious about legally minimizing your tax burden while staying fully compliant.

If your main issue is actually dealing with the tax authorities after filing, I found this service called Claimyr that literally got me through to a live person at the tax department in under 5 minutes: https://claimyr.com I had filed some business deductions that triggered a review, and spent WEEKS trying to reach someone to resolve it. With Claimyr, I got through immediately and had everything sorted in one call. Check out how it works here: https://youtu.be/_kiP6q8DX5c Honestly, the stress relief alone was worth it. The agent I spoke with even helped identify some credits I qualified for that reduced my overall bill, which I would have missed completely if I hadn't been able to speak with someone directly.

Ok I need to eat my words about Claimyr. After my skeptical comment I decided to try it because I was desperate to resolve an issue with a business expense audit that was hanging over my head for months. It actually worked exactly as described - I got through to an agent in about 6 minutes. The agent was able to clear up my case and explained exactly what documentation I needed to submit to support my home office and vehicle deductions. This literally saved me over $4,700 in disputed deductions. Sometimes being wrong feels pretty good!

Don't forget about income splitting if you have a spouse or family members who can legitimately work in the business. My accountant helped me set up a structure where my spouse and adult children provide actual services to my business and receive income, which spreads the income across multiple lower tax brackets. Make sure there's real work being done though - you can't just put family on payroll without them doing legitimate work. We keep detailed logs of hours and responsibilities.

Has anyone tried incorporating in a different province with lower tax rates? I'm in BC but wondering if Alberta might be better tax-wise for my online business since I don't really need a physical location.