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Is your business tax compliant? Questions you need to ask! Lisa Patrick

 

Do all your expense receipts for over $30.00 have a gst number?
Did you record on your meal receipt who you had the meal with and what you discussed?
Did your write down what you used your vehicle kilometers for today (what, who, where, why)?
Does your bookkeeping reports reflect the information in the right format in order to make important business decisions based on your taxable income?
 
Just a few of the short list…


Lost money on a business venture? Lisa Patrick

1.                  certificate of incorp
2.
                 share allotment schedule
3.
                 articles of incorp
4.
                 annual return from province
5.
                 provincial or legal document indicating dissolved or involuntary dissolved company
6.
                 shareholder /  loan ledger is adequate for initial claim…
you do not have to submit receipts but obtain copies of the initial receipts or disbursement that indicate the reason the money was advanced to the corp…
this would have to indicate the business purpose…
consider keeping control of the receipts & paperwork  for 7 years…
a CRA auditor would love you if you provided a binder indicating the bundle of receipts or the receipt matching the actual journal number for each fiscal period where an amount is owed.
7.
                 tax schedules of corporation
The form that is necessary to file it on your person taxes would be available from your tax professional when they claim it on your personal taxes..
Tax details…abil (allowable business investment loss)
50% of amount is deduction against all other income but it may be restricted by the amount you claimed for capital gains deduction and investment losses that exceed investment income in the past.
 
Tax savings of the claim depends on your Tax margin in Alberta:
$40,000 at 25%
$41,000 to $82,000 at 32%
$82,000 to $127,000 at 36%
over $127,000 is at 39%

Darlene Lafond, R.P.A., C.P.C.


Looking to sell a business or buy a business? Lisa Patrick

We have discussed with business buyers and business sellers various considerations ABOUT VALUING A BUSINESS.

Buying the shares of the business rather than breaking out the equipment can sometimes be a better net cash win for everyone.
 
If you desire assistance in getting the “things” together to make an informed decision, should YOU buy a business or what to sell YOUR business for:
Consider getting this information on the business together for your tax accountant.
 
1.        Previous years government filed returns (Federal, Provincial, GST, others)
Comparative Income & Expense Year to date
2.        Comparative Balance Sheet Year to date
3.        Payroll report for management year to date for calendar year.
4.        Payroll report for management year to date for fiscal year.
 
C2online provides a detailed checklist on the buying, closing or selling of a business – FREE!
 
Buy close transfer bus checklist  


16 Business Points - For Small Business Owners and Small Business Bookkeepers Lisa Patrick

When you developing your business or you are compiling your information for bookkeeping as a bookkeeper or as a small business owner, several discussions generally can occur with your accountant.  Several discussions and facts you may need to know are listed below.

1.                  GST registration compulsory after any 12 month period of $30,000 of revenue.  1-800-959-5525 government business enquiry line.

2.                  If you are using space in your home for work or business there is the opportunity for you to receive rent or just a reimbursement of what it cost.  C2 Online provides a word document for free; office in home.  C2online also provides an excel document that calculates the inputted amounts and provides a total.  The cost is $4.95 on our website www.c2online.ca

3.                  You use a cash account - treat amounts paid by cash like another bank account.  Name it “Your name” in the company books.  It is used for items paid by cash and other proceeds not actually company money but a person’s name.

4.                  You use a charge account - treat amounts paid by charge card like a bank account in the company books, use one charge card specifically for the company purchases.   The interest charges are an obvious business expense.  When company expenses and personal charges are mixed together, it is a huge exercise to determine what interest is business related.  If you require a ledger for this purpose C2online has a tool for $2.95, interest for business purchases on statement.
           
5.                  Construction companies are required to file a T5018.  This must be filed by the 6th month after the year end.   Do the contractors information slips based on January to December and file it by June 30.  Go to link at the government website…
t5018 contractor payments.

6.                  How to handle meals claims:
a.  shift exceeding 12 hours could include travel time = one meal a day write “shift over 12 hours” on receipt
b.  client visit: write “client name, agenda, time” on receipt
c. over night travel meals write “client name, agenda” on receipt

7.                  How to maintain a vehicle log of kilometers traveled.
State the date of use, how many kilometers, reason for travel, destination of travel.

8.                  How to deal with tools and equipment and supplies owned before the company started.  Some of these items would be start up costs and some would be fair market value.
In regards to the start up costs – when did the company start ?  At the time you incur expenses with expectations of generating income. 

 

When you have supplies for start up not processed through the company bank: use those receipts and use the cash account.

 
When tools and equipment for start up processed through the company bank: use those receipts and use cash account.

When owned and used for other relationship before business: Supplies listed at fair market value not processed through the company bank, use those estimated lists or estimate receipts and use cash account.

Tools and equipment listed at fair market value processed through the company bank: use those estimated lists or estimate receipts and use cash account.
 
9.  Financial reports necessary to do year end: To do a quality control always provide summary reports that show totals only for the first visit about the report.

Profit & loss, balance sheet, summary of trial balance:  Print the detailed trial balance (all accounts report) when we are completed so you have a print out of all the accounts from start to finish of year.  This detailed trial balance report (all  accounts report) is only needed once entirely for government backup.

Financial statements defined briefly:
A balance sheet: Provides an account of what the company actually owns & owes
An assets: is what the company owns.
Current assets are bank, charge cards (sometimes a negative asset), cash accounts
Capital assets(fixed) are equipment & vehicles & tools & furniture, other assets (not usually a physical touchy feely thing) incorporation costs or franchise agreements.
Liability is what the company owes.  

Equity is net value of ownership.
Profit & loss: (income stmt) is the operating accounts that show how much you made and how much it cost to make it, including depreciation (capital cost allowance) of 20% or 30%, of fixed assets.
Business packet handout - statement of professional & business activities provides accounts for persons with business.

General index of Financial information (GIFI) is for corporations.

10. Employment insurance now offering a program for self employed people.
Employment Insurance Benefits for Self-Employed People <http://www.servicecanada.gc.ca/eng/sc/ei/self_employed_workers.shtml>
 
11. CPP contributions are paid:
a.         when you file your taxes as a partnership or proprietorship business; by a compulsory automatic calculation on your net profit.
So when you have a tax return completed, this return will combine the cpp and tax (federal & provincial) on one bill thru your sin number

b.         when you are actually working for your corporation.  Paid by the corporation through a payroll and eventually recorded to you through a T4.
A corporation business has to remit employer payroll remittances in order for this to be paid to their social insurance number for tax or cpp.

12. Tax pre - payments (installments) through your social insurance number.  When no net income estimate available, - consider 15% of all earnings as an installment.
That paid to your social insurance number at Canada Revenue Agency will also help pre – pay your Canada Pension Plan payment.
 
13. Three essential bookkeeping points:

  • Match what the paper work to what you claim.
  • Balance the account that the paper work is from.
  • Consistency with what you do with what paperwork is essential to compiling the totals to the accounts.

13. Four mistakes you can make in bookkeeping:
      1. Most mistakes in bookkeeping by owner.
      2. Claiming too much business use of a shared personal and business use item
      3. Claiming a purchase of equipment or tools, as 100% instead of treating like an asset that (capital cost allowance- depreciation applies)
and vice a versa, claiming an expense as equipment, like a tire purchases are repair and maintenance
     4. Claiming a meal expense in wrong account -  meals paid with a hotel receipt when traveling for business is still meals.  Always claim the meal expense in its own named account, for instance; meals & entertainment, meals – travel, meals – staff, meals for living out.  Do not put meal expense under travel – meals must be identified as meals.  The tax accountant may need to complete an income tax & GST adjustment.  (50% may be disallowed)

14.       www.cra.gc.ca  free forms, courses, General Index of Financial Information, and Business Guides.
 

15.       Government seminars for small business
Edmonton     Alberta - Events <http://www.cra-arc.gc.ca/vnts/ab/menu-eng.html>
·        
GST/HST New Registrant Seminar <http://www.cra-arc.gc.ca/vnts/ab/dm-gst-eng.html>  
·        Small business information seminar <http://www.cra-arc.gc.ca/vnts/ab/dm-smll-eng.html>
·        Tax Information Sessions <http://www.cra-arc.gc.ca/vnts/ab/dm-nf-eng.html>  
·        New Employer's Information Session <http://www.cra-arc.gc.ca/vnts/ab/dm-nw-eng.html>
·        Taxable Benefit Information Seminar <http://www.cra-arc.gc.ca/vnts/ab/dm-tbis-eng.html>
·        SR&ED Public Information Sessions <http://www.cra-arc.gc.ca/txcrdt/sred-rsde/cntcts/srdpr-eng.html>


16.  Office Appointment types…
If your yearend totals are ready for tax prep, your appointment scheduling type would be for taxes and yearend.
 
If you need the totals or adjustments in your bookkeeping totals for the year and you have some questions, you appointment would be for year end only First.
 
If you know you need bookkeeping adjustments made, your appointment would be for a bookkeeping meeting.

 

Darlene Lafond. R.P.A., C.P.C.

 


When are you taxable in Canada? Lisa Patrick

Residency is the determining factor.  Are you ordinarly resident meaning you have residential ties as in dwelling places,dwelling place of your spouse or dependants.

Secondary ties are personal property in Canada(such as furniture,clothing),social ties(membership in Canadian recreational organizations),a drivers license from a province in Canada, or a Canadian passport.


Revenue Canada taking too much money from you? Lisa Patrick

 Your accountant should be providing you strategies. In fact, if you don't take the time to analyze your business you could be missing out on thousands of dollars in business tax deductions and thousands more in savings.

Most accountants don't utilize the tax deduction offered from CRA for a convention for your business. Part of the problem is that you must have the paperwork to coincide with your vacation to prove that while you vacationed you worked on building success in your business.

All you need is some multiple choice agenda's that deal with the day to day operations of your business. We provide the tools necessary to deduct your vacation 100%. All you do go on your vacaction, fill out your agenda's and return them to your accountant for your deduction.

To leaarn more and to start saving money click here.


Biz-Boom: Maintain and Grow your Business to Success Lisa Patrick

 

Dan Sumner Economist from ATB, will provide insight into the current state of Alberta’s economy and what we can expect in the future.

Also in this seminar you will learn more about proven business strategies and free & fee business tools and templates that assist you to position your business financially for success.

Some of the topics discussed:
1. Is my business set up properly and am I receiving the most tax advantages possible.
2. Tax Tips - how to save more of your money.
3. Business tools and templates.
4. How to read a financial statement.

Gladys Molly from ATB Financial will be providing an overview of business banking options to suit all business industry's.

 

R.S.V.P. Now


Your Will - Make sure someone knows where it is. Why? Lisa Patrick

There is  nothing wrong with giving it to your Tax Accountant to keep.  You visit them every year.
Your tax accountant would be the most liikely first place a family member would ask about it.
 
Remember it is a nightmare for the family if no Will can be found.  It's even worse if they know there is one and they just can not locate it.


Bookkeeping Quotes - How to Communicate Clearly! Lisa Patrick

Bookkeeping is not so different than going to the mechanic. You know you need some service work but you have no idea on how much or what it is they do.
 
We have been using a method for quoting fees for several years now that asks the client to provide some basic information.  It's a standard billing process that utilizes a code and a standard time or flat rate for the different facets of a bookkeeping file.
 
Just to name some of the different services we have to provide as a bookkeeping to complete a clients records efficiently.
 
Contacts to: government, account receivable etc…
Completion of Government forms like remittances for payroll, taxes etc.
Bookkeeping input by matching every journal entry or condensing the journal entries.
Photocopying, backing up the data file, organizing the filing system, printing of reports…
Year end examination for confirmation on the accuracy of the information.

You can go to our free tools and download our free product, and have a look at our sample of some of the codes that we use.  You can look forward to an online quoting software that will complete the quote for you.  Coming Very Soon!

 


How to Deal and Influence Toxic Clients Lisa Patrick

We have a proven method on how to deal with Toxic Clients.  This method is in place to recognize the fact that every retail industry has “Toxic Clients” is the first step.
 
The next step is recognize why they are toxic and that might involve you accepting some accountability for a mistake.

Some steps that we have developed teach us how to:
1.        teach the toxic client to be appreciative and worthwhile.
2.        refer the toxic client to an alternate.
3.        and finally how recognize when you have to get rid of that toxic client
.
We are keynote speaking about this very subject.  Check our events calendar for more information. 

This event is only open to bookkeepers and accountants.  However, we will be conducting a webinar on this very subject and you amy contact us directly to pre-register for that event.


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