Novack CPA

ChaiTech Unite Summit II yesterday. Toronto Tech Week at the Prosserman JCC.

Jayson Gaignard's talk on community hit on something I've been thinking about a lot lately:

The strongest businesses aren't built on transactions. They're built on relationships compounded over years.

Most people treat networking as something you do when you need something. Show up at events. Collect cards. Move on.

Community is the opposite. You show up consistently, you give without expecting, and the relationships compound.

The ROI doesn't show up in 90 days. It shows up in 5 years when someone remembers you, vouches for you, refers their best client to you.

Good to see Shay Nulman, Michelle Hoidas and reconnect with Rosenfeld and meet a lot of builders doing real work.

The Jewish tech community in Toronto is building something that matters.

If you're a dentist or doctor still operating as a sole proprietor: June 15 is your filing deadline.

But April 30 was the payment deadline.

If you owe money and haven't paid yet, interest has been accruing since May 1.

The June 15 extension is for filing - not for delaying payment.

The bigger question: If you're making $150K+ and still filing as self-employed, why aren't you incorporated?

Professional corporation = lower tax rate, income splitting options, liability protection.

Filing as self-employed works when you're starting out. It stops making sense once income scales.

If you're filing T2125 business income again this year, the question isn't "when's my deadline?"

It's "should I still be unincorporated?"

Watched a 10-year associate/owner relationship implode last week over something that should have been dealt with 5 years ago.
The associate thought they had first right to buy the practice when the owner retired.

They didn't. Not in writing.

Owner sold to an external buyer for 30% more than the associate could afford. Associate found out the same day the staff did.

Here's what actually happened:

The original associate agreement had vague language about "future partnership opportunities." No ROFR. No valuation formula. No buy-sell terms.

Both sides assumed they had a deal. Neither side had it documented.

By the time the associate wanted to formalize the agreement, the owner was already in conversations with multiple buyers.

The lesson isn't "get everything in writing" (everyone knows that).

The lesson is: If you're an associate and your employment agreement mentions "partnership" or "equity" or "future ownership" - that's not a plan. That's a placeholder for a conversation you haven't had yet.

And if you're the practice owner: Your associate thinks they're buying this practice someday. If that's not the plan, tell them now. Not when you're ready to sell.

There is a Chinese saying that shines through here, "好记性不如烂笔头," which translates to "a good memory is not as good as a tattered pencil" or as I know it - "the faintest ink is better than the strongest memory ".

The Q2 planning decisions that actually matter for dentists:

1. Salary vs. dividend mix for 2026
You can adjust this throughout the year. Most don't.

2. Associate partnership timing and structure
Spring hiring conversations turn into fall equity decisions. Get the structure right before you shake hands.

3. Equipment purchases and financing
Class 8 vs. Class 10. Lease vs. buy. The tax treatment matters more than the payment schedule.

4. Multi-location expansion structure
One PC for both locations? Separate PCs? The answer depends on whether you're planning to sell them individually or together.

These aren't November decisions. They're May decisions that compound by December.

Most professional corps revisit this in March when filing. By then, you're just documenting what already happened.

Your 2025 tax bill just hit. You paid more than you expected.

Now you're asking: "What could I have done differently?"

Here's the honest answer: The decisions that determined your 2025 tax bill were made in early 2025 - not in March when you filed.

Salary vs. dividend mix. Income timing across entities. Whether you structured that associate partnership properly.

By the time your CPA calls asking for slips, it's over. You're just documenting what already happened.

Planning happens in Q2. Compliance happens in Q1.

We're in Q2 right now. Your 2026 tax bill is being determined by the decisions you make this month.

Most dentists and doctors will wait until March 2027 to think about this. Then they'll be surprised again.

Breakfast today with Elina, a Toronto litigation lawyer I've known since high school. Twenty years now.

We share a backstory most people don't know about either of us. Before law and accounting, we both took serious culinary classes at George Brown and it was real chef-track work.

Funny how that shows up later in our professional work. The discipline of a working kitchen carries over more than you'd expect. Precision under pressure. Mise en place. Knowing that the prep nobody sees is most of the job. Both reward precision under pressure. Both punish shortcuts.

Two decades in, we're still using those instincts. We also send work each other's way when a client needs both sides of the file. Trust like that doesn't happen overnight.

Looking forward to putting back on the Chef's whites (and hat) and take a Korean cuisine course this summer.

Healthcare professionals (physiotherapists, optometrists, chiropractors) often ask:

"Should I lease or buy my equipment?"

The tax answer is different than the cash flow answer.

Leasing: Preserve capital, predictable costs, easier upgrades.
Buying: Capital cost allowance, ownership, flexibility.

Which matters more depends on where your practice is in its lifecycle.

Expanding rapidly? Leasing gives you flexibility.
Established and stable? Ownership might make more sense.

Most CPAs give a one-size-fits-all answer. The right answer depends on your specific situation.

Healthcare practices (physiotherapy , optometry, chiropractors) often structure associate compensation as straight percentage splits.

Simple. But it creates issues down the road.

The associate producing 60% of revenue wants 60% of income.
But overhead isn't proportional. Neither is business development. Or the risk you're carrying as the owner.

Percentage splits work until they don't.

Better approach: compensation tied to specific metrics (production, collections, new patient acquisition) with clear owner distributions defined separately.

This is the conversation most practices avoid until associates start demanding equity.

Physiotherapy, optometry, and chiropractic practices expanding to multiple locations face a corporate structure decision:

One professional corporation for all locations?
Separate PCs for each location?
Holding company on top?

The answer depends on your long-term strategy:

- Planning to sell locations individually? Separate PCs give you flexibility.
- Bringing in partners at specific locations? Structure matters for equity allocation.
- Expanding into new regions? Holdco simplifies management.

Structure should follow strategy—not the other way around.

This is planning work most CPAs don't do until you're already locked into a structure that doesn't fit

When I review how shareholder agreements affect tax planning for owner managed businesses, the same issue comes up:

No one thought about what happens when circumstances change.

A partner wants out.
Someone gets divorced.
The business valuation has tripled since the agreement was signed.

The agreement was written for Day 1. But the real questions show up later on.

Tax planning should include reviewing how your shareholder agreement affects income allocation and succession, often done in coordination with legal counsel.