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Your Secret Weapon to a Successful Business Lisa Patrick

Bookkeeping is something as a business owner we all face and need. It is recession proof and a necessary evil!  As a business owner we are so busy trying to make money that we forget that our bookkeeping can be our Secret Weapon to keeping our money.

Good bookkeeping leads to good business management and growth!

Below are 5 common mistakes made by bookkeepers:

 1.      They do not account for claiming meal receipts and not identifying it in a meal ledger such as a meal & entertainment,  meal travel, meal – living out allow, meal – isolated living, etc.

The government tax department believes a consumption of a meal is part personal.  Although for business expense the meal and the gst paid is 100% deductible by the company.  The Tax claim of the meal expense and the gst on the meal has to be reduced by 50% when prepared for tax purposes.  

In unusual incidents a meal claim for an “isolated” work site, you may claim 100% of the meal expense and 100% of the GST expense.

2.      Claim receipts as a business expense that actually have some personal use by the employees or owners.

It is not uncommon to have to discuss lifestyle related expenses and determine if any part of the expense is business related.

Travel and vehicle are likely ledgers that may have some personal portion that may have to be deducted and or taxable to the employees or owners.

3.      Claim an equipment purchase as an operating cost.

The popular mistake is inputting a computer purchase under office expense.  Because a computer provides more than one years use for the business as all equipment purchases, this expense must be claimed as an asset on the balance sheet rather than on the income and expense.

4.      Without Obtaining confirmation on the use of vehicle in the company,  specifically when claiming a vehicle with an over  $30,000 purchase cost you may be claiming to much GST and when the taxes are prepared the actual asset listing of that vehicle may have to be reduced in value to $30,000.  Although for business expense the vehicle and the gst paid is 100% deductible by the company.  The Tax claim of the vehicle purchase and the gst has to be reduced by the $30,000 threshold when prepared for tax purpose.  When a vehicle is used for a passenger vehicle, the amount eligible is restricted to $30,000 for tax purposes.

5.      Not Collecting GST on every sale within a GST registered company, cause you suspect gst is not a consideration, doubt that belief, collect gst.  

Selling a company used computer, used vehicle to any one, the owner or an employee is considered a taxable sale and gst is collectable.

C2online specializes tools for business owners to ensure they maximize on their deductions.. go to our categories and feel free to browse .. if you have any questions just contact us!

 


A Curriculum to promote professionals for the 21st century! A business expense?? Lisa Patrick

Did you know that ...

Only 3% of people in Western society have clear, written goals. 

A study was conducted on students in the 1979 Harvard MBA program. In that year, the students were asked, "Have you set clear, written goals for your future and made plans to accomplish them?" Only three percent of the graduates had written goals and plans; 13 percent had goals, but they were not in writing; and a whopping 84 percent had no specific goals at all.

Ten years later, the members of the class were interviewed again, and the findings, while somewhat predictable, were nonetheless astonishing. The 13 percent of the class who had goals were earning, on average, twice as much as the 84 percent who had no goals at all. And what about the three percent who had clear, written goals? They were earning, on average, ten times as much as the other 97 percent put together.

Although  most company’s will claim the cost to train their staff as a business expense,  the claim of the time to get the training can not be claimed by the  individual on their personal tax return if the tuition was not paid to a  federally certified educational institute.
(educational tax credit is based  on hours committed to a course curriculum that provides skills for a job)  
 
Federal certification  as an “educational institute for professional training” may be represented as  a curriculum to promote professionals for the 21st century.
Need  certification for
1.                   necessary  for claiming the time and the training cost as a personal tax credit
2.                   necessary  to claim as an educational credit if employee tuition paid but not the time to  attend the course.
3.                   necessary  to claim as an education credit if employee wants to qualify for the  textbooks tax credit available to personal tax credit.

Certification of Private Educational  Institutions
Purpose of Certification  
The  purpose of certifying private educational institutions under Sections 118.5  and 118.6 of the Income Tax Act is to allow students, 16 years of age or more,  to qualify for Tuition and Education Tax Credits.  
Eligibility  Criteria
·        To have a business  name and give the courses or training in Canada.
·         To be a private school or college, a  professional organization or business providing courses, other than courses  designed for university credits.
·         •To offer a qualifying educational  program, that is courses specifically designed to furnish a person with skills  for, or to improve a person’s skills, in a recognized  occupation.
NOTE: The following are examples of educational programs  that do not qualify: conferences, workshops, seminars, courses designed  for personal development, general knowledge, religion, adult basic education,  literacy, tutorial, job interview techniques, preparation for exams and  courses paid by employers.
·        To  be provincially licensed as a private vocational, trade school or the  equivalent, if that is a requirement of the province where the courses are  given.
I BELIEVE IN ALBERTA THIS IS NOT REQUIRED.
·         To submit a written request for  certification by the Minister of Human Resources and Social  Development:

  Application - Certification Kit <http://www.hrsdc.gc.ca/eng/learning/canada_student_loan/MCL/app.shtml>  This is the “recent” application kit for federal certification that will  provide you the authority to issue tuition receipts and education credits for  tax purposes.  

Or contact us to learn more...

Lisa Patrick
CEO, C2online.ca
 

 


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