No Bull Business Bites

Another Tax Season Bites the Dust? Are You Thinking About 2011 Yet?

2011-05-16T09:16:00.004-06:00

So another tax year is behind us and I for one am glad. Long days at my computer while still juggling the rest of our life is always good for a few sleepless nights.

For those of you who have filed and already put the dreaded tax man out of your mind, I write today to caution you against waiting until April 30, 2012 before you start preparing for next years taxes.

The first thing I do every year after finishing our own personal taxes is to file all of our current year in an envelope and shred our return that is older than six years. The next thing I do is to create a folder for the current tax year to place in my filing cabinet. Then when new receipts come in, I have a place that I can put them right away. Which reminds me...I forgot about a tax donation receipt that was emailed to me on Thursday :) It happens though, we receive many pieces of paper and in the shuffle of day to day, without a plan, then can easily be misplaced.

I have gotten a bit of feedback from some of our clients on articles I posted on Twitter the past few days. The articles basically stated that if you got a refund on your taxes, you weren't properly prepared for tax season. Getting a refund back means that you let the government hold on to your money all year round interest free. As one of our clients said "that lump of dough from the Gov feels so good at the time!" While that may be true, I would rather have control of my money than have it sitting with the government all year. My advice if you have no idea how to prevent this scenario from happening is to get with a tax professional who can take a look at all you have going on and help you create a strategy. If you had money you had to pay to the government, I would also sit with someone and come up with a plan to avoid a huge tax shock at the end of next year.

What I am trying to say is that just because the 2010 tax year has come to a close, don't let next year sneak up on you. Be prepared and do a few things so that there is no stress when it comes to your taxes in 2012. Let me be the one with the sleepless nights, while you already have a pretty good idea of where you will stand.

Have an amazing day!

Elections Canada and Your Taxes

2011-04-21T09:12:00.002-06:00

Do you wish to provide information to Elections Canada? A simple enough statement at the start of all of our tax forms, but have you considered what this actually means. It's not a bad thing. In fact, I say yes every year because I enjoy the benefits of doing so.

If you check yes you are asking the CRA to give your name, address, date of birth and citizenship status to Elections Canada so that your information is kept up to date. If this is the first time you have submitted taxes and you are not in the Register, then Elections Canada will add you.

I love to vote and I enjoy the fact that if I move or make any other changes, I will most likely contact CRA and they will pass that information on to Elections Canada for me. I have a busy life and one less phone call is more freedom with my time.

If you should choose to check no then the CRA will not give your information to Elections Canada. You don't lose any of your civic rights to vote, but you will now have to contact both CRA and Elections Canada if any of your information changes. This could create some headache for you on voting day if you have recently moved or changed your name.

Elections Canada stands by confidentiality regulations and will not release your information for any reason other than electoral purposes.

This is a personal choice and I am not trying to sway you one way or another. Obviously I have an opinion, but I just want you to think about it more consciously when you are completing your taxes. Make a choice, don't just check a box without understanding it's implications.

Have a wonderful day!

I Owe For Taxes, I Can't Pay...Now What??

2011-04-19T10:34:00.002-06:00

The answer for the question of what to do when you owe the government and can not pay is often to hide the paperwork under another pile of paperwork and hope it goes away. The truth is that you are just putting off the inevitable and you know it.

We have discussed this topic before regarding GST, but I thought it pertinent to bring it up today as the tax deadline is swiftly approaching and many of you may be struggling with what to do.

Here is the right answer for what to do when you owe the government on your personal income tax...file on time! The CRA imposes an automatic 5% penalty on what you owe for filing late. Either way if your payment is late you will be paying interest, but if you file on time you can avoid the 5% penalty.

The other thing that I think most Canadians don't know about the CRA is that they are more than willing to work out payment options with you and the more proactive you are, the better they are to deal with.

So if your tax planning fell short and you are in the position of owing the CRA some money, be sure to file your taxes before the May 2 deadline and then give them a call to work out some payment arrangements. Trust me, you'll sleep better at night not having that hidden paperwork troubling you.

Have an amazing day!

What's in a Name? Demystifying Corp, Inc, Ltd, etc.

2011-04-12T09:49:00.002-06:00

We had a great reader question yesterday about what the different endings to a companies name are used for and mean.

There are many different legal elements (that's what the ending of the corporations name is called) that can be used when naming a business for today we will look at the most common three: Corp., Inc., and Ltd.

I will first say that a Professional Corporation is specifically for a person with a professional designation such as a lawyer, physician, accountant, etc. So if you don't fall under that category, you don't need to worry about the Professional Corporation.

All corporations names usually consist of three parts. The first element is the distinctive one, this is usually your name. For our business it is "No Bull". The second element is the descriptive one that says what you do. Our business is "Bookkeeping & Small Business Consulting." The final element and the one we are discussing is the legal element. For us, we use "Inc."

I found this to be an interesting question, because the truth is that I didn't really know the answer. So when in doubt, I do some digging and find an expert. I first called a few Alberta Registry agents since they are the ones you go to when you register your corporation. There answer was that there was absolutely no difference between the endings most commonly used (Inc., Ltd., Corp.,). One agent advised that if you were planning on doing business in the USA, she would recommend using Inc. as that is their most commonly used ending.

I also spoke with a couple of agents from Revenue Canada and their response was that it mostly came down to an issue of terminology and interpretation from business associates and clients. The ending of the business name doesn't necessarily change the status or liability.

So basically what I have discovered is that Corp., Inc., Ltd., etc. are just the adjectives that describes a corporation and in most scenarios you can pick the one that suites your name and your business the best. If you have any doubt or confusion, I would advise that you contact a lawyer or accountant that specializes in incorporating companies, but even after a few calls to some of our associates, we were getting the same answers from them.

Hope that helps Wendy and thanks for the great question. We always welcome questions from our readers. Those are some of our favorite posts.

Have an amazing day!

Tax Return Mistakes

2011-04-11T09:48:00.001-06:00

I had a friend who used to take all of his t-slips and put them in an envelope and he would send them off to Revenue Canada for them to file his taxes. Sounds like a pretty convenient way to do your taxes, however he could have been missing out on some major tax breaks.

When it comes to filing your taxes, how much corrective work does the CRA actually do?

Most of us feel that once we have sent off our tax return and get back our notice of assessment, that our taxes are finished for yet another year. We would in fact be wrong. Starting in June of each year, the CRA goes back and starts reviewing our tax returns. If we have missed filing a T-slip, there was an amendment to a T-slip or any other modifications are made, the government will adjust our returns to accommodate the changes. This could mean that you will are required to pay back money that you received back.

One thing that the government will not be looking at is any credits or deductions that you may have missed. Forgot about a $500 donation? Too bad, they aren't going to know and adjust your return. Another thing they will not do is optimize between you and your partner. This could be a potential savings that you would miss out on entirely.

My advice would be to find a place in your home office to store all of your tax paperwork. This way you can be sure of capturing all those expenses you receive receipts for during the year. I also always do my husbands taxes and mine together. Some years it has no effect, but especially now that we have children it can have a huge impact. If you are not sure of what to look for when it comes to optimizing between spouses, contact a tax preparer that can assist you.

My final word of caution is don't receive a return and expect that to be the end of it. The government reserves the right to ask for some or all of it back for the next six years. Be prepared for that day in case it comes.

Have a great day!

Something about the CRA that all Canadians Should Know

2011-04-07T09:23:00.001-06:00

A client notified us this week that she received an email from the CRA notifying her of her tax refund. Thankfully she immediately forwarded the email on to us and asked for our advice.

One thing that all Canadians should know about the Canada Revenue Agency is that they will NEVER contact you via email.

My recommendation on what to do next after receiving such an email is to forward it on to the RCMP's antifraud cantre at info@antifraudcentre.ca.

One thing I have also learned lately after dealing with some fraud on my credit card is to never give your information out over the phone if you have been contacted. Thankfully I followed that advice and stopped a scam.

If the CRA contacts you over the phone, they tend not to ask verifying questions. If you are being asked questions to give your SIN or other personal information and feel wary about the situation, ask them for their name and employee number and information to call them back. Trust your instincts. If you think to yourself "they should already know this information", trust that feeling.

It is important that you protect your personal information. Just because you think the CRA has contacted you, doesn't mean that they have. The CRA will generally contact you via snail mail prior to any contact via phone. You should have an idea why they are calling you before they do.

Do what you can to protect yourself from fraud. I don't want to live in a world where I have to suspect the intentions of each person that contacts me, but we all need to have a bit of caution and not give up our information just because we think the government or another institution we trust is contacting us. Do your due diligence. Even if it takes a few extra minutes, it is definitely worth the time you will save yourself if you fall victim to a scam.

Have a wonderful day!

When Should I Consider Incorporating?

2011-04-06T09:23:00.001-06:00

This is a question we get asked quite often. Yesterday, in fact, one of our clients approached us asking this very thing. "When should I consider incorporating?"

While you are a sole proprietorship, the business is you and you are the business as far as the government is concerned. You both share your nine digit SIN number as identification. When you incorporate the business becomes a separate entity and gets its own nine digit BN for identification from the government. One of the advantages of incorporating is that you are distancing yourself from the company to a certain degree. The reason I said to a certain degree is that shareholders are generally liable up to the amount they have invested shares into the company. However, if you are a shareholder who is also a director of a company, you may be found liable for personal debts of the company depending on the circumstance. Most small businesses that incorporate the owner is the director and the shareholder so their liability may not be minimized as much as you may have been lead to believe.

On the flip side, incorporations do cost the most to set up and maintain. Your books must be kept in line with the standards that Revenue Canada sets up for any corporation including the large ones. There are a lot of complicated rules and regulations for incorporations that many small business owners miss in their excitement to incorporate and with out receiving professional advice, many get into trouble with CRA.

There is no definitive answer on when is a good time to incorporate. As your business becomes more profitable there are many reasons that you would consider incorporating so that you can take advantage of the small business deduction, the capital gains deduction or a lower tax rate than on your personal taxes.

If this all seems very overwhelming and even if you just want to get the facts straight, I would highly recommend seeking out a professional to guide you and answer your questions.

Have an amazing day!

Request for Taxpayer Relief: An Important Read

2011-04-04T09:48:00.001-06:00

A few years ago, friends of ours went through the most unspeakable personal loss. It just so happened that I was about to start processing their taxes. I began to think, at times in your life where it is all falling apart, do you really still need to take time from your grief to acknowledge the tax man or is there some way for them to understand that life happens?

Turns out the Canada Revenue Agency is not so black and white as most may think and they definitely have a heart and understanding that tragedies happen in life and circumstances beyond our control. You can file a Request for Taxpayer Relief (RC4288). This form allows the CRA to waive penalties, interest and provide income tax refunds beyond the three year period normally allowed.

The kind of situations that merit filing this form:

Financial Hardship
Natural or man-made disaster
Death
Accident
Serious Illness
Emotional or Mental Distress
Civil Disturbance

When tragedy strikes, filing your taxes on time certainly isn't on the top of anyone's list. This is a good bit of information to store in your memory banks that if such an event occurs, you can delay filing your taxes without risk of penalties. When you are able to file your taxes, simply have the RC4288 accompany it and the government will assess your situation.

Have a safe day!

A Little Now or a LOT More Later

2011-04-01T09:23:00.000-06:00

You've got that stack of paper piling up on your desk threatening to teeter over and consume the entire floor of your office. It's the end of the year and your accountant is requesting your books so they can process your taxes. What you wouldn't give to be back at the beginning of your fiscal year when your last set of taxes were complete and your goal was to do your books a bit each month so you wouldn't be looking at watching the sunrise after being up all night cramming the work in.

I'm here today to provide a bit of support and encouragement. My husband is always after me to schedule, set goals and make a plan. Let's not tell him I said this, but it is very sound advice. I have a creative personality type and creating a schedule feels as restrictive as a straight jacket, but I have found that to be truly successful I need make small goals and then reward myself when I have successfully completed them.

Here's my suggestion, pick one day each month to set aside for bookkeeping if you can get away with only doing your books once a month. Put the day in your calendar and don't plan to do anything else.

The key to making this successful is to plan for a reward after you are done. What is something you would love to do for yourself once a month? Maybe a mani pedi or a massage or a coffee out at Chapters while you browse the book shelves. I don't know what it is for you, but figure out what a good reward would be and then don't allow yourself to have it without completing the books.

Another advantage with doing your books at least monthly is that you will remember what is going on way better than after a year has gone by. I know that for me, sometimes I can barely remember transactions after a month has passed, never mind a year.

Take a little bit of time each month instead of that dreaded long stretch at the end of the year and I guarantee you will thank yourself at year end.

Have a productive day!

Marriage & Bookkeeping (read at your own risk)

2011-03-31T09:23:00.000-06:00

This is a bit of a touchy topic, but I do feel that it is one that must be addressed. Over the past ten or so years that I have been in this industry, I can't even tell you how many companies have come to us with a very similar story. The husband has started a business and to save costs has enlisted his wife to do the bookkeeping. Don't get me wrong, there are many capable women out there who rise to the challenge, but the vast majority find it to be a huge task they are unable to master.

It breaks my heart time and time again when I meet the unsuccessful couples that have come to us in a state of panic and discord. It is a hard thing on a marriage when you place the struggles of a business in between it. My husband and I have worked long and hard to achieve a balance in our work environment since we are often around each other 24 hours a day. There are days when we do it and there are ones that we forgive and start over again, but it is definitely not a situation that works for everyone.

I understand that for a business starting up hiring a spouse may seem like the best idea for cutting expenses. Take a close inventory of your partner's strengths and weaknesses. Is bookkeeping the best idea for your marriage? Is it going to increase the stress in your relationship? Does your mate have the skills necessary to complete the job successfully? At the end of the day what is more important, the business or your marriage?

If you already have communication issues with your significant other, I guarantee that this will not be an idea that will save anything for you. In fact, I would bet that you will be seeking out a bookkeeper within 18 months to dig you out from the pile of paperwork and Revenue Canada bills.

I don't think that there is a one size fits all solution to this dilemma. I think you need to prioritize what is important in your life and then make your decisions based on that. I don't think that any marriage is worth losing over a business venture, but I do think that open and honest communication will take you very far should you decide to work with your spouse.

Have a fulfilling day.

Do you want your business to run you or do you want to run your business?

2011-03-30T08:25:00.002-06:00

Taking that leap of faith to start your own business requires a spirit of great determination. We all have different reasons for why we began on this entrepreneurial journey, but one thing that unites us is the desire for success.

If you know anything about my businesses vision, you will know that it started when I was a teenager watching my father create his own companies. He loved the freedom and creativity that being a business owner can provide. His failing was the "I can do it all mentality". He had the ideas and the dream, but he didn't have the support that he required to be successful.

My desire after watching him was to create a company that would be able to assist business owners like him so that they could achieve their goals and find peace of mind. It can be hard to take the journey on your own, unsupported. I wanted to be there, encouraging and filling the gaps.

As an entrepreneur, you have a great talent for what you are doing, or you wouldn't be doing it, but I would bet that running the back end of your business can be lacking. Don't be afraid to reach out and ask for help. You may think that the expense is something that you can't afford. I would ask you to look five years down the road and see where you want to be and if you can do it on your own. Or will you be facing a mess of paperwork and Revenue Canada breathing down your neck.

Know that you are not alone. You don't have to do it yourself. With all of the many hats you have to wear in a day, find people skilled in some of those occupations to assist you and lighten your load so you can do what you do best.

Have an amazing day!

Can A Bookkeeper Produce a Notice to Reader?

2011-03-28T14:15:00.000-06:00

The very simple answer is yes. Since the Notice to Reader statements do not require auditing an uncertified accountant or bookkeeper can complete the NTR.

Most corporations only require a simple Notice to Reader to be produced at their year end. The NTR is accompanied by a notation on the scope and limitations of the reports which will state that a review or audit was not preformed.

As with anything you are getting what you paid for. Check out the references and experience of the firm that you are hiring.

For smaller businesses, hiring a bookkeeper to do your NTR versus a certified accountant can save you quite a bit of money, but do realize that you are in the end accountable for the accuracy of the reporting. This is the case for whomever does the reports, certified or not, so be sure you are using someone that you trust.

Have a great day!

A Friend of a Friend Told Me...Statements in Lieu of Receipts

2011-03-28T09:45:00.000-06:00

I always love when someone comes to us and says that a friend of a friend's uncle's brother's long lost sister in law's accountant maybe once said something.

One common misconception that we are faced with is that bank and credit card statements can be used in lieu of actual receipts. That is false. The government has the right to disallow any expense that does not have an actual receipt. You might get an auditor who looks at an entry for Staples and you don't have a receipt and so they give you the benefit of the doubt that it is for a legitimate business expense. The reality is that they don't have to give you that kindness.

Always err on the side of caution with your bookkeeping and be over vigilant. The hope is that you would never have to face Revenue Canada with your books, but always be prepared as if they are coming over tomorrow.

Receipts will fade over time. This is your responsibility. Especially on big ticket purchases, photocopy the receipt. If the receipt fades, Revenue Canada may disallow the expense. Never highlight anything on a receipt. It will certainly disappear. If you want to point something out on a receipt, circle or underline it with pen or pencil.

One suggestion I have is that at the end of each period take the receipts that you have and attach them to their statements. This will enable you to go back and find the receipts easily and quickly.

These steps may require a bit of extra work on your part, but in the end they will enable you to have the kind of back up that would stand up to an audit. Go through each day with your finances with Revenue Canada in the back of your mind. When you get a receipt from a vendor, put some thought into how you handle and store it. Protect your business and protect your interests.

Have a vibrant day!

Two Seconds of Your Life that Could Save Big Headaches

2011-03-25T09:45:00.001-06:00

The scenario: You are sitting down with a Revenue Canada officer going over your receipts and the auditor pulls out a lunch you had over 36 months ago and wants to know who you took out.

The typical result: You are scrambling through emails, online schedules, appointment books, etc trying to wrack your brain on who you met with three years ago. Failing to produce the name of the client and secondary proof of the meeting, the auditor disallows the expense and all of the other receipts you failed to account for.

The result from what you learn today: You take a look at the client name on the back of the receipt and breathe a sigh of relief that you took two seconds at the end of your meeting to write down who you took out for lunch.

Revenue Canada has the expectation that you are able to account for all of your business expenses. The who, what, why, where and when. If you fail to justify your expenses, they can disallow them and you have to pay the back taxes, interest and penalties.

Be prepared and like I mentioned in a previous post, have a place in your vehicle for you to place receipts when you leave the purchase location. If your expense involved a client or had a non typical purpose, write the information down on the back of your receipt so that you can easily recall it should you need to up to six years later. Two seconds could equal hundreds of dollars lost if you choose not to use them to write down simple, but valuable information.

Have a productive day!

Am I a Subcontractor or an Employee?

2011-03-24T09:45:00.001-06:00

This is such a loaded issue with great confusion. Many employees are made to be subcontractors because the employer doesn't want to pay the payroll taxes. The problem is that they might actually be employees.

One of the reasons this is such a vital issue to have a yes or no answer is because if the government comes in and decides that the subcontractor is actually an employee, then all the back payroll taxes and penalties and interest will be owed to the government. For the subcontractor, this isn't that big of an issue, but for the employer this could mean tens of thousands of dollars.

We have a really fantastic document with a simplified checklist that should provide some clarity on this issue. Click here for a copy of the checklist.

If after looking at the checklist and reading through the government guide RC4110, you are still confused, you can contact the Canada Revenue Agency and request a ruling. Protect yourself with knowledge. Be proactive and you could save yourself a lot of money.

Have a prosperous day!

Back Up or Work Be Gone

2011-03-23T09:45:00.000-06:00

Murphy's Law of Computing - He who laughs last probably made a back-up.

Back up, back up, back up. Two little words that should be made a mantra for any bookkeeping done on computer. Imagine you have spent hours and hours on getting your books up to date and then your computer is fried. Sure you did a back up, but you the back up is sitting on your hard drive. The same location as the file. It is a hard lesson to learn. Trust me.

My recommendation is to back up your file on an external drive, a flash drive, an online service or any other technology you have available that is separate from your computer where the file is stored.

When to do a back up? I would advise that any time you have done a bunch of work you do a back up. When you complete your monthly reconciliations, do a back up. When you have finished your year end and sent the file off to your accountant create a final back up.

I would say that you only need to keep three back ups at any given time. So if your storage space is somewhat limited, you can get rid of any more than three back ups that you have. Your annual back ups should always be kept. Ensure that you label the backups so that you can clearly identify them.

Save yourself the headache and always remember to back up. Some accounting software has settings that will remind you to do the back ups. This can be a great option if you need the reminder.

Back up, back up, back up. Make it your mantra.

Have a fantastic day!

To Reconcile or Not To Reconcile, That Is The Question

2011-03-22T09:45:00.000-06:00

First, what is reconciliation? You can click on the word for our previous conversation on this topic. Basically it is a balancing the amounts between your bookkeeping accounts and the bank accounts.

Reconciling your accounts is something that I highly recommend doing on a monthly basis. It is important to be locating and errors or omissions on a regular basis to avoid it being a chore at the end of your fiscal year. Some days I have trouble remembering what happened last week in my business never mind twelve months later. Also, your books may be out by only a couple of dollars at the end of the year, but that could actually be made up of some larger transactions and going back to figure our the error could take hours of your time and create great frustration.

It is always advisable to be current and up to date with your books. One of the services that we provide to our clients after training them to do their own books, is a monthly maintenance package, where we will reconcile the books after each months entries have been made. This allows our clients the security of doing their own books, because they know that we are going to take a look at it each month and correct any problems as they happen.

Whatever system you choose for your bookkeeping, ensure that you are preforming these vital reconciliations. You will take away your frustration and your accountant will be very appreciative of a reconciled set of books at year end.

Have a wonderful day!

A Dollar Here, A Dollar There...It All Adds Up

2011-03-21T09:45:00.002-06:00

Petty cash and paid out of pocket expenses tend to be the most mishandled cash transactions and your company could be losing hundreds, even thousands of dollars each year.

Let's first look at your personal money you use for business purchases. Let's say you go to staples and buy some pens. It only cost you $5 and so you don't think much about tossing the receipt into the garbage since it's such a small amount and couldn't possible affect your bottom line. Say you make three of those kinds of transactions a week, in one year that could add up to $780.00 a year in missed expenses. My husband always teases me that I usually spend $20 a day. In the end, those little receipts that you pay out of your own pocket, could mean revenue that you are taxed on that you shouldn't have been as well you are personally out $780 that you could have recouped from the company. My suggestion is to place a recipe box in the console of your car or even an envelope attached to your visor, so you can quickly place the receipts into filing right away as you leave the store and enter your vehicle. Many wives who do the bookkeeping for their husbands say that this has saved them from many an argument.

Next, petty cash. Petty cash is technically money that the company owns and is required to reconcile like any other bank account. There should be a starting balance, a listing and copies of all receipts and an ending balance that matches the cash on hand. Auditors do not like to see money going out of the company into petty cash and then not being accounted for. It will not be seen as an expense. If your company has a petty cash fund, then it needs to be managed properly. If you require further advice, please contact your accountant or bookkeeper and get on top of it before it becomes a mess.

When you are running a business the government most cares about the income that you claim. They aren't so worried if you paid $10 on postage and then never claimed it. It means more money in their pockets and less in yours. Be vigilant about all the expenses you are using towards your business. it matters.

Have an great day!

Simplified Tax Form

2011-03-18T10:19:00.002-06:00

Have an amazing day!

Interview Questions for your Bookkeeper

2011-03-17T13:11:00.002-06:00

You interview a new employee, a child care worker and even your own doctor, but what kind of questions would you ask your potential bookkeeper. A lot of the interviews that we have with clients come down to how much we charge per hour. While that is a vital concern for small business owners, there are some other things that you can ask to find out their skill level and whether their service can meet your needs.

Try asking your potential bookkeeper the following things:

What is the difference between an asset and a liability or have them define a general ledger.

These kinds of accounting related questions are very basic and the comfort level of the bookkeeper when answering them will give you a good idea of their competency. Select any of the words above to be taken to other blog posts that will educate you on these terms so you can gauge the response you receive.

Ask them about their years of experience and ask them about their education.

In Canada, there are no requirements or qualifications that determine who can call themselves a bookkeeper. The more experience and education that a potential bookkeeper has the better off you will be in the long run. If you are getting a low rate and a bookkeeper with low experience, you may end up with a good result, but our clients often come to us after working with inexperienced bookkeepers and their books are a mess. The best case scenario with an inexperienced bookkeeper is one who is being mentored by someone with more experience and education.

Accounting may not be an area that you feel confident talking about, but that doesn't mean that you can't ask the necessary questions to ensure that you are getting the best bookkeeper possible for your business. Educate yourself and ask the right questions.

Have a wonderful day!

Are you hiding under a mountain of paperwork?

2011-03-16T09:23:00.002-06:00

If you are, trust me, you are not alone. A common situation that we see everyday from new and potential clients are envelopes, shoe boxes and even garbage bags full of paperwork that has been piling up until a panic has arisen to get it done right now. You didn't mean for it to happen. You had every intention of starting your business off right and getting organized, but slowly it crept up on you until you were in the middle of a mess.

We understand the situation you are in and we have been working on refining our existing solutions for clients to create and amazing service we call "Rescue + Recovery". The basic premise is that we come into your current paperwork situation and assist you in getting caught up. At the same time we start working on and implementing a customized system of operation for your current work so that you can start moving forward immediately. We can train yourself or staff that you may have on hand in basic bookkeeping or we can provide you weekly onsite bookkeeping to keep your financial systems up to date. We will create a system that will give you control of your company.

The entrepreneur is a special breed of people. You had an idea, a desire or a calling to create your dreams in the form of a business. You focus on your passions and yet the paperwork calls to you at the end of each day. Let us help you regain your peace of mind so that you can focus on what ignites your spirit. Call us today at 403-466-7391 and we will set up a free consultation to take a look at where you are at and give you some real time results to get your business where it needs to be.

Have an amazing day!

How can I file my taxes?

2011-03-15T09:45:00.000-06:00

What are the options for filing your taxes?

There are four ways to file your taxes in Canada. Netfile, Efile, Telefile and by paper.

Netfile is done by purchasing a tax software or using an online service. When your taxes have been completed, it will produce a .tax file that you can submit to the government. You will require a four digit access number to gain access to this filing method. You will either be mailed the number or you can request it online.

Efile is the for when you take your taxes to a tax preparation professional and they file electronically with the government.

Telefile is for simple tax returns. It is what it sounds like, a service that allows you to file via a touch tone phone.

Paper is the tried and true method, but it will slow down processing as you need to take travel time into consideration.

All of the methods, besides paper will enable to you hold on to all of your documents and really it is what the government prefers. They have warehouses full of your tax documents and it costs a lot of money to maintain. If you can file any way other then paper, they will only need to see your documents if they request them. You are required to hold on to your documents for 6 years.

There are some days that I miss the simplicity of putting pencil to paper when I first started doing my own taxes, but technology has caught up to us and it's time to save some trees :0)

Have a remarkable day!

When will I get my refund back?

2011-03-14T09:45:00.000-06:00

How long does it take to get your refund back after you file your income taxes?

If you filed your taxes via paper return then CRA says it is usually 4 to 6 weeks. If you file electronically, the you are looking at a two week turn around.

If you filed your income tax return early in the year, say before February 15th, then you still won't see a return before the beginning of March, because the government doesn't start processing this years returns util mid February.

Also, if your taxes are sent in for review, then it could take even longer.

One way to see a refund faster is to sign up for direct deposit. This way you are taking out the travel time for your cheque to hit your mail box.

You can call the government at 1-800-959-1956 to get information on where your tax return is at. You will need your SIN, date of birth and the amount from line 150 of your previous tax return. It is an automated system so you can call anytime of day. Should you wish to speak to an actual person call 1-800-959-8281 from 8:15AM to 5PM local time.

Have a prosperous day!

I don't run a business. I just have a hobby.

2011-03-11T09:45:00.001-07:00

Do you have to declare hobby income?

The short and succinct answer is yes. Whether you were aware of it or not, you are an entrepreneur and running a part time business.

The government defines a business as "any activity that you do for a profit". And while selling your wares that you do for fun may not seem as though that is your ultimate intent, it is what you are doing. If you are selling a product or a service, you are doing it for a profit. Ultimately the government doesn't care if you sell one or one hundred. If cash exchanged hands, then a business transaction occurred.

Now that you have discovered that you are a business owner, you need to be smart about it. There are many deductions that small business owners can claim to offset the income they make, however small it might be. Get in touch with an accountant or bookkeeper and request a free consult.

Should I file, if I can't pay?

2011-03-10T09:45:00.000-07:00

What if you can't pay the income tax that you owe the Canada Revenue Agency? (or for that matter payroll deductions, GST, corporate tax)

If you find yourself in a situation where you owe more money to the government than you can pay, my advice is to at least file on time. There are two kinds of penalties that the government levies on tax payers. The first is interest and the second is a late filing penalty. If you file on time and can't pay right away, then at least you aren't paying the late filing penalties.

Once you have filed, call the CRA. They are just like any other creditor you would deal with and they are open to working with you and within your financial means to get paid. When you show good faith with the government and a willingness to work with them, then they will do the same with you.

My biggest piece of advice is not to ignore them. I sat down with a Trust Officer from Revenue Canada last week and he told me that the people who ignore them are the ones who will end up with frozen bank accounts, assets seized and facing jail time. In the long run it is much easier to face up to the fact that you can't pay, call CRA and start a reasonable payment schedule.

So to sum up. File on time. If you can't pay, call the CRA and start making small payments. Don't ignore your situation, because I promise you it won't go away.

Have a fantastic day!

When are your taxes due?

2011-03-09T09:45:00.000-07:00

When are Canadian taxes due?

The first question to ask is how is your employment structured.

If you are a sole proprietorship or partnership, then you will claim your income on your personal income tax forms and you must pay what you owe on April 30th. The strange part of this is that you have until June 15th to file the actual taxes.

If you are a corporation, then you must pay what you owe three months after your fiscal year end. The taxes however, are not due until six months after your fiscal year end.

And of course, if you are not self employed and are filing your taxes they are due and the balance must be paid by April 30th.

Also note that if your filing deadline falls on a weekend, as it does this year, you have until the following Monday to file.

Have a wonderful day!

Do you track your personal spending?

2011-03-08T09:45:00.000-07:00

Over the Christmas holidays my husband discovered a new financial tool that has literally changed the way we communicate about money.

Money is one of those topics in a marriage that can bring about much stress and tension. For myself, my old mentality was to spend now and worry about the consequences later. For my husband, who is a planner, this was enough to drive him over the edge each time the monthly financials would be compiled.

Late last year an interactive financial tool that had been purchased by Intuit (the makers of Quickbooks) was finally brought to the Canadian market. That product is Mint.com.

Mint.com allows you to track your spending, set up a budget and much, much more. When you sign up, you can access your bank accounts, credit cards, lines of credits, etc. It uses the same encryption that banks do and it does not have the authorization to do anything with the money in your account, only to view the transactions.

I have to say that my husband is a bit of a stickler for financial security and identity theft. He purchases our credit reports monthly just to stay on top of it. So when he has looked at this product and trusts it, to me that is a gold seal of approval.

The best part is that now when I go out shopping I can quickly look at the Mint.com app on my iPhone and see how much money I have left to spend. January and February's month end's passed by peacefully in our household, because we were on track with our budgets and not going over.

If you have never set up a budget, this would be a great way to track your spending for a couple of months to see some areas where you could cut back and to start building a budget.

Mint.com is an amazing tool and we are recommending it with high praise to our friends, family, colleagues and clients.

Have an amazing day!

Why do you need financial statements?

2011-03-07T09:45:00.000-07:00

I very often find that small business owners operate under the impression that if there is money in the bank, then the business must be doing okay. That may be one of the reasons that so many businesses fail in the first two to five years.

It is important as a business owner to have regular financial statements to be able to see the actual viability of your business. Are you making money or is the money in your bank accounts already spoken for? One example is the GST. Yes that money is put into your bank account each time you deposit money from your customers, but that money is meant to be remitted back to the government. If your bookkeeping was done regularly and you viewed reports at least monthly then you would know at any given time how much you owed to the government.

Another reason to stay on top of your businesses finances is for planning purposes. Ask yourself where you want to see your business in five to ten years. Are you building for growth or do you still have an employee mentality that paying today's bills is good enough? If you don't have the financial statements to see where your business is heading, then it is a pretty good bet that the answer is no where.

If you do receive financial statements every month and the paper makes more sense as scrap paper for little ones to draw crayon stick figures on, ask your bookkeeper/accountant to help you understand what they mean and how to read them. It's part of what your paying them for.

Take control of your business. At the end of the day you are the person that cares and has the most invested into it.

Have a great day!

Fall is Upon Us, Can You Claim Your Summer Vacation?

2010-09-08T10:01:00.003-06:00

As you know, I always love basing my blog posts on our client's questions. This past week we were contacted by a client wondering if they could write off their vacation as a business expense.

This is another greyish area with Revenue Canada. It must meet the "Is it reasonable?" litmus test.

There are three typical scenarios:

You are on vacation purely for rest and relaxation: While it would be nice for your business to pay for your vacations, it is not considered a business expense in the same way that you are required to pay for your own meals. There is an expectation that you will take care of certain needs and luxuries on your own.

You do some business while on vacation, but it is still primarily a vacation: Any expenses that is directly related to the business you would be able to write off. Say while you were away you had dinner with a client, then that would be a write off. Your plane ticket and hotel stay would still be a personal expense since the main intent of the trip was personal.

You are going to a tropical location, but you are there for business: This whole trip could be a write off even if you do some touristy things and even then as long as you were with business associates, it could be deemed as a legitimate expense. If you were going to write off an entire trip then you would need to have back up to give to Revenue Canada to show that the trip was for business.

This is a pretty intense topic and I may not have answered all the questions you have. Why don't you drop me a line kimberly@nobullbookkeeping.com and maybe you will see your question answered online at No Bull Bites.

Have an amazing day!

Solvency Made Simple

2010-09-07T17:43:00.003-06:00

Today's word is Solvency.

In plain english Solvency means that you have the ability to pay debts when they come due or also having enough assets to pay off your liabilities.

A common misconception about solvency is that it is the same thing as liquidity, but it is not.

Solvency is often measured by using the current ratio of 2 to 1. Basically you take your current assets and divide them by your current liabilities. If you have twice as many assets as liabilities, then your business is considered solvent. The 2 to 1 ratio is taking into consideration that some of your assets may lose value if you have to sell them quickly.

Have a fantastic day!

At Least Once a Day

2010-09-06T12:11:00.002-06:00

People often say that motivation doesn't last. Well, neither does bathing - that's why we recommend it daily. - Zig Ziglar

Welcome back from the summer. It's been a big season of change for us in a usually dormant time of year and we are excited to see what the next couple of months will bring.

I often find that September is a season of rejuvenation and motivation. It's like the smell of freshly sharpened pencils and the feel of new running shoes. That excitement that we used to feel on the first day of school is something that most business owners feel getting back to the routine of work after summer. Although, like the runners after a few scuffs, we too can also feel run down as we get back into the grind.

How can we keep the motivation going to last us til our next break? I think Mr. Ziglar said it right, we need to have it be part of our routine. Each day we bathe, eat three meals, work, go to the gym, etc. So each day we need to find our motivation.

I like to have one fun activity planned in my day. That doesn't mean something large and extravagant. What it means is one task on my list that is a bit of a break from the regular work that I do. For one of our designer clients it could be a magazine that is sitting in the inbox begging to be peeked through. For myself it could be a glance at our twitter page and taking a moment to reconnect with the world outside this room. What is it for you?

The problem with the fun stuff is that it can often overtake the work that needs to be done. The way that I solve this is by using a reward system with my fun activities. I set a goal for myself and when that is done, then I go to the reward for a set period of time and stick to it.

We all need to stay motivated to keep on task and get the work done. Find a system that allows you to find your motivation each day. Keep those pencils sharpened and those runners feeling new. Having a positive outlook and keeping your motivation high will allow you and your business to flourish.

Have a wonderful day!

Exciting News

2010-09-01T11:39:00.004-06:00

So I promised that today we would be sharing some exciting news and I am so happy that the day has finally arrived. We are really pleased to introduce our new business concept "Rescue & Recovery".

The basic premise is that there are many business owners here in Calgary who are struggling with the financial end of their day to day activities. They are drowning under a pile of paperwork and bookkeeping and a lot of the time it is keeping them up at night.

Our Rescue & Recovery package will consist of a qualified bookkeeper coming into your office for a set period of time to clean up and put your affairs back in order. We will create a new, more effective system that is tailored to your business and then we will come in periodically to ensure the systems are maintained.

We truly believe that there are many businesses in need of Rescue and Recovery and we are looking forward to blessing them with it.

More details of this system will be put up on our website at the beginning of next week. As well, we will be resuming our regular blog entries that we have received many positive comments from our readers.

We thank you for allowing us this time over the summer to recharge our batteries and we are excited to explore this new phase of our business.

Have a wonderful Labour Day long weekend.

Vacation

2010-07-27T13:56:00.001-06:00

We are off on Vacation until the middle of August and are putting the blog on hiatus until then. We look forward to providing you more plain english advice on our return.

Membership Dues & Don'ts

2010-07-20T22:13:00.002-06:00

Do you belong to any professional or business organizations? Are you writing them off as business expenses.

Think about the groups you belong to and if they provide your business benefit then they would be considered a business expenditure.

Organizations like networking clubs, better business bureau, chamber of commerce are all to promote growth and credibility to your business and can be allocated accordingly.

You do have to be careful when it comes to things like golf club memberships. While there is some benefit to your business if you take a client out, the government is pretty grey on this area. It can be seen that this expense is purely entertainment or could also be used for personal use.

Take a look at the memberships and organizations you belong to and evaluate whether or not they are of benefit to your business. If they are then remember to expense them.

Have a fantastic day!

What are Adjusting Entries?

2010-07-20T10:40:00.003-06:00

You may receive a list of adjusting entries from your accountant at the end of the year or have heard the term before and aren't quite sure of the meaning.

Adjusting entries are the changes that need to be made to your set of books so that they will match up to the reports that the accountant made to create your taxes. They essentially put you on the same page so that if you are ever audited you will match up to what was submitted. The adjusting entries also ensure that all the correct income and expenses are entered into the period that they occurred.

Adjusting entries can include any adjustments to errors that you might have made with your entries, any prepaid services, unearned revenues, accrued revenues or accrued expenses.

Generally your accountant will give you a list of entries that can be made exactly as it shows on the report into your general ledger. Most accounting software will allow your accountant to make the entries into your program while you keep working and then you import their changes. Some accountants will even come to your place of business and make the changes for your if you are not feeling confident enough. Whatever way works for you adjusting entries are an important year end procedure that will finish off your books.

Have an amazing day!

Strategy VS Enthusiasm

2010-07-20T10:34:00.004-06:00

Two bulls, one young and full of enthusiasm, and the other older and wiser, see a herd of cows.

The young bull says, "Let's charge down this hillside and have our wicked way with a couple of those cows."

The old bull replies, "No, how about we stroll gently down this hillside and have our wicked way with them all."

Do you have a plan for your business or do you charge full steam ahead and then decide what to do when you get there?

Many entrepreneurs didn't exactly choose the path they are on and then one day they look around at the chaos and try to figure out what to do. It can be a hard lesson to learn and an even harder one to recover from.

A business plan is an important tool for your business. I'm not going to go into the details of how to create one today, but I do want to impart the necessity for one. It could be the thing that makes you or breaks you. You need to know where your vision for your company is. Where are you heading and what will you do when you get there? And just because you may have already created one, doesn't mean that you don't need to revisit it on a regular basis to see where you are at and make any changes.

You can find many templates online or sit down with a professional. Whatever you do, ensure that you have a plan in place and then put it into action. Be like the wise bull and you will find that you are more prone to succeed.

Have a fantastic day!

Accounting Humour

2010-07-20T10:32:00.002-06:00

Have a wonderful day!

The CRA is Watching

2010-07-20T09:58:00.003-06:00

How does the CRA look at your taxes to ensure fairness?

They have four processes: Pre-assessment Review, Processing Review, Matching Program, and RRSP Excess Contribution Program.

Pre-assessment review is an electronic review process done by CRA to find any glaring inconsistencies in your taxes. All taxes are reviewed under this system and this is where you will receive any contact from the government prior to receiving your Notice of Assessment (NOA).

Processing review is done after the NOA is sent out and this is the process by which the documentation is reviewed and matched to your return. So if you missed inputting your Universal Child Care Benefit or any other type of form, this is where that will be caught and you will be issued a revised NOA.

The matching program is where the slips that you have submitted on your return are matched against the institution that sends them. Your income reported is checked against the T4 your employer sent out, etc. You may be contacted by the government at this point or they may issue a new NOA.

The RRSP excess contributions review is pretty much what it sounds like. The CRA reviews the RRSP contributions and ensures that you haven't over contributed. If you have, you will be notified and a new NOA will be issued.

My main intent bringing up this topic was to let you know that just because you receive the initial NOA after filing doesn't mean that the process has stopped and you are free and clear with your taxes.

Have a great day!

Legal, Accounting & Professional Fees

2010-07-14T12:46:00.003-06:00

This is a category that a lot of sole proprietorships miss out on. They often forget that the cost of having their taxes prepared each year is a business expense. A really good tax preparer will remind them of this and help them capture the expense, but it doesn't always happen and is on the owness of the business owner.

This category captures all of the fees for professional advice, service and consulting fees. This includes legal advice and the cost of having your books prepared. Also, any expenses incurred for having taxes, GST or payroll tax prepared.

One exception of legal fees, is anything that was incurred to purchase capital property. Those fees must be incorporated into the cost of the asset. So you will still get to write them off, they just go into a different area of your books.

As a business owner you must always be on the lookout for deductions and we hope that we are helping you think about some that you may be missing.

Have an amazing day.

Gross VS Net

2010-07-13T13:04:00.005-06:00

I have been in the finance game for a while now and besides debits and credits another concept that I still have to mull over sometimes is gross vs net. These terms often are misused and misunderstood. Let's shine some light on them in the financial context.

Gross is the whole. It is the total amount. No deductions have been removed from the gross.

Net is a part of the whole. It is the amount left over after your deductions have been removed. Once the net has been removed there are no further deductions to be removed.

Your gross income is the income before you remove the expenses. Once the expenses have been removed you are left with the net income.

Let's seen an example:

The gross profit of Bob's Fishing Hut for 2009 is $500,000.

Their operating expenses are $300,000.

Therefore, their net income is $200,000.

In summary : Gross Profit - Operating Expenses = Net Income

Have a wonderful day!

Is Your Day Finished?

2010-07-12T16:07:00.003-06:00

Finish each day and be done with it. You have done what you could; some blunders and absurdities have crept in; forget them as soon as you can. Tomorrow is a new day; you shall begin it serenely and with too high a spirit to be encumbered with your old nonsense.

-Ralph Waldo Emerson

One of the hardest things about being self employed is turning it off. Somehow, it never really happens. Since having children, it has abated a bit, but I will admit to receiving glares from other mom's at the park while I take a business call. We used to have our office in our home and then the company was running 24 hours a day. Since moving into an office space two years ago, it has gotten drastically better. Although with the advent of Blackberry's and IPhone's, we never really seem to unplug.

Do you have a start and end to your business day or does it all seem to run together? Do you take a moment at the end of your day to seal it up so you can move forward into tomorrow? We can only do what we can do. We can ensure that our actions reflect the best of our ability, but in the end when the moment passes it is gone.

Work to free yourself from the 24 hour business. Place boundaries around your personal life so that you can get some down time. Since most of us have companies that rely on our energies to run, if we don't protect our sanity, then we lose in the end anyway. Your health, emotional well being and happiness require you to switch off at the end of the day. It requires you to accept what occurred during your day and let it go so that you can move on.

Have a great day and remember to renew your spirit.

Technology Bites

2010-07-09T12:20:00.003-06:00

So I had all of my blog posts all lined up to go and lo and behold due to a busy schedule I didn't check the last two days and they didn't post. So I have just posted them and leave you with some computer humour. I'm sure it's an oldie, but it's a goodie!

Happy Friday!

Last night my sister and I were sitting in the den and I said to her, "I never want to live in a vegetative state, dependent on some machine and fluids from a bottle to keep me alive.

That would be no quality of life at all, If that ever happens, just pull the plug."

So she got up, unplugged the computer, and threw out my wine.

CRA and Fraud

2010-07-09T12:07:00.003-06:00

We have such an intimidating view of the CRA that when they call on us we tend to freeze and all logic runs out the door. I hope that in our previous posts we have been able to dis spell some of these ideas, but in case you still have a fear of the tax man, here are a few precautions to ensure that you are indeed giving your information to CRA and not being conned, which has been occurring.

The CRA will never email you. Trust me, I've tried to communicate with them in that manner and they just don't.
They will not give your information out to anyone other than yourself unless they have received the proper correspondence. Not even if you are a spouse.
They will not call you up and leave personal information on your voicemail. They will simply leave their contact info and request you to call them back.

If you are in doubt, the CRA requests you ask yourself the following questions:

Are you expecting to hear from them?
Does it sound to good to be true?
Am I being asked for information that I wouldn't put on a tax return?
Are they asking for information I know they already have on file?

If you get even the smallest inkling of a feeling that something is not right, call the CRA right away and look into your file. Protect yourself with knowledge.

Have a great day!

A Little Interest Goes A Long Way

2010-07-09T12:01:00.003-06:00

This isn't a particularly long topic, but one that could garner you a little extra deductions and in some cases quite a bit. Interest.

You can deduct the interest cost of borrowing money or to acquire property for your business.

There are of course exceptions.

There are limits on some of the types of interest you can claim, such as passenger vehicles and vacant land. If you have a question on the interest you are wanting to write off, contact Revenue Canada or give us a call and we'll look into it for you.

Penalties, bonuses and and fees related to your interest can also be deducted, but again take a look into what kind of expenses they are as some may be required to be spread over the life of your loan.

If you loan money to the company, you may wish to charge the business interest. Make sure that it is reasonable and consistent. This is one instance where many entrepreneurs fail to maximize their business deductions.

Interest can be an interesting deduction, but look into it and ensure you are using it properly.

Have an amazing day!

Periodic Inventory

2010-07-06T15:05:00.005-06:00

Today we are going to look at periodic inventory.

Most retail business have ongoing daily or even by the purchase inventory systems. This is when as an item is sold it is removed from your inventory count. You may check your inventory numbers on a regular basis, but it is tracked automatically.

Not every business has that type of system and some will only count their inventories on a periodic basis. One of our restaurant clients gives us their inventory numbers at the end of each month. They only look at their inventory on a monthly basis and then we record the adjustment in their books. Some of our clients only look at their inventory on a yearly basis and use the difference against their cost of goods sold purchases.

An important item to think about, especially at the start of your business. What kind of inventory counting system are you going to have? What are your businesses needs and what is the outcome you hope to achieve?

Enjoy this wonderful Tuesday.

Don't Quit

2010-07-05T10:00:00.004-06:00

For today's Motivational Monday segment, I want to leave you with a poem that I love to read when I am feeling frustrated being a business owner. I hope that it will be of comfort to you in those moments too.
Don't Quit
by: Unknown Author

When things go wrong as they sometimes will,
When the road you're trudging seems all uphill,
When funds are low and the debts are high,
And you want to smile, but you have to sigh.
When care is pressing you down a bit.
Rest, if you must, but don't you quit.
Life is queer with its twists and turns
As every one of us sometimes learns.
And many a failure turns about
When he might have won had he stuck it out:
Don't give up though the pace seems slow -
You may succeed with another blow.
Success is failure turned inside out -
The silver tint of the clouds of doubt.
And you never can tell how close you are.
It may be near when it seems so far:
So stick to the fight when you're hardest hit
It's when things seem worst that you must not quit.

It's Fun Friday at No Bull Bites

2010-07-02T08:53:00.001-06:00

It's Fun Friday and we have a little tax auditor joke for you:

The local bar was so sure that its bartender was the strongest man around that they offered a standing $1000 bet. The bartender would squeeze a lemon until all the juice ran into a glass, and hand the lemon to a patron. Anyone who could squeeze one more drop of juice out would win the money.

Many people had tried over time - weightlifters, strongmen, etc. - but no one could do it. One day a scrawny little man came into the bar wearing thick glasses and a polyester suit, and said in a tiny squeaky voice "I'd like to try the bet." After the laughter had died down, the bartender said OK, grabbed a lemon, and squeezed away. Then he handed the wrinkled remains of the rind to the little man.

But the crowd's laughter turned to total silence as the man clenched his fist around the lemon and six drops fell into the glass. As the crowd cheered, the bartender paid the $1000, and asked the little man, "What do you do for a living? Are you a lumberjack, a weightlifter, what?"

The man replied, "I'm a CRA Agent."

Happy Canada Day!

2010-07-01T11:03:00.002-06:00

It's the birthday of our country and since we're off to spend the day with family, I'm taking a day off of the blog.

In lieu of my witty writings, I leave you with a link to Wikipedia which describes the history of Revenue Canada.

Have a great day with friends and family and a great long weekend to those of you that are taking tomorrow off as well.

Breaking News About Mileage

2010-06-30T10:00:00.001-06:00

How convenient that as I sit to write my Write Off Wednesday post an email graces my inbox that fits the bill. The government, in it's attempt to assist small and medium businesses, has simplified the mileage log book requirements.

They are calling their new initiative a "sample log book." What this means for you is that you will be required to keep a log book for your vehicle for the first year to establish what your business use is. After one year, you may then create a sample three month log that will be used to determine business use. This process will start with the 2009 tax year and your three month log must be within 10% of your established one year business use percentage. They want you to show that the one year log is indicative of your regular business use.

This is fantastic news for many of our clients who find the idea and task of keeping a mileage log burdensome. Keep your records for one year and then just maintain a three month sample log every year after.

There are alternatives to how you may prove your business use of a vehicle, but remember that these tend to be subjective to the auditor.

Questions you can ask yourself to determine your use via an alternative method are:

Do you have another vehicle for personal use?

Does your business require a specialized vehicle for it's use?

Does the nature of your business require a vehicle?

Who else drives your car?

How is your vehicle insured?

For us, as I mentioned in our article on vehicle expenses, we have the No Bull Mobile and a mini van. It is reasonable to view the car as being used solely for business as we have alternate transportation for personal use.

To read more on this new requirement, please visit the Revenue Canada Website or drop us a line and we can answer any questions.

Have a beautiful day!

Intangible Assets Defined

2010-06-29T10:00:00.002-06:00

Definition: Intangible Asset

We have discussed assets before. They are the stuff that a business owns that has value.

Now not all assets that a business owns are tangible.

What does that mean? It means that not all assets of a business can be touched, held, viewed or physically measured.

What kind of assets are intangible? Brand, franchise, patent, reputation, goodwill, copyrights, trademarks, etc.

How do you calculate the value of your intangible assets? Market Value of Company - Value of Tangible Assets = Value of Intangible Assets

Thanks for letting us shed some light on this. If you have any questions about this topic or any other business/financial related topic, feel free to drop us a line at kimberly@nobullbookkeeping.com. We'd love to help you out.

Have a wonderful day!

Is Your Heart in Your Business?

2010-06-28T10:00:00.001-06:00

You have to have your heart in the business and the business in your heart.

-Thomas J. Watson

Most of us that take the trek to being self employed do it because we have a passion for something. However, the drudgery of all the other tasks we have to do during a day can eat away at what we once loved about our companies.

For me, I love the contact that I get with our clients. I love to hear their stories and have them explain where their passion comes from. We had restructured our business model a while ago and my role became behind the scenes just working with the numbers. I didn't realize it at first, but slowly I began to feel less than enthusiastic for the work I was doing. After evaluating the situation with my partner, who knows what makes me tick, I started to take on the odd client meeting. I don't do it all the time, but enough so I still feel excited about our business.

What do you love about your business? What first drew you to follow your passions? Do you still feel excitement getting up in the morning?

If you are feeling down about what you do, find something to bring you enjoyment again. We recently had our website redone and that alone was enough to make me feel shiny and new again. I don't know what the answer is for you, but find what will reignite the fire you once had for your profession. Find the fun again.

Have an exciting week!

Let's Laugh at the Tax Man

2010-06-25T08:00:00.000-06:00

* The difference between the short and long income tax forms is simple.
If you use the short form, the government gets your money. If you use the long form,
your accountant gets your money.

* A fine is a tax for doing something wrong. A tax is a fine for doing something right.

* A couple of weeks after hearing a sermon on Psalms 51:2-4 [knowing my own hidden secrets]
and Psalm 52:3-4 [lies and deceit], a man wrote the following letter to Revenue Canada:
‘I have been unable to sleep, knowing that I have cheated on my income tax.
I understated my taxable income, and have enclosed a check for $150.
If I still can’t sleep, I will send the rest.

* A dollar saved is bound to be taxed. And so is a penny earned.

EI for the Self Employed: Is It for You?

2010-06-24T08:00:00.000-06:00

Starting in January 2010, self employed individuals in Canada became eligible to contribute to the EI program in order to qualify for Special Benefits:

Maternity Benefits

Parental Benefits

Sickness Benefits

Compassionate Care Benefits

To qualify for any of these benefits you must:

Be paying EI for a year prior to application for benefits.

Earn more than $6,000 (net income) of self employed income over the previous 12 months.

You will pay the same EI premiums as employed individuals, but you will not pay the employers portion.

You must continue to pay into EI for as long as you are self employed, if you have claimed benefits. You may opt out of EI at the end of any tax years as long as you have not claimed any benefits.

Whether or not to enroll in the EI program as a self employed individual will be based upon your own pro and con list.

For me personally, I have had two children while being self employed and had to go back to work within days as a result of not qualifying for EI. This new legislation would be a plus if I wanted to take some time of with our next child. However, I'm not to crazy about being locked in once I have claimed benefits. I understand why they are doing it, but one year at home with my new baby, could cost me many thousands of dollars over the life of my business. I might instead save the extra money over the next couple of years and then have the savings to accommodate some time off with a new addition.

Educate yourself and make a decision that makes sense for your circumstance.

Have a fantastic day!

Is Fido a Legitimate Business Write Off

2010-06-23T08:00:00.000-06:00

This question came to us from one of our clients and I thought I would address it on the blog as well.

Here's a couple of questions to first answer: By employing the animal in your business, does he/she add value and assist you in generating income? Is the pooch also used as a companion at home? Is there a more conventional way of getting the service your dog provides?

The real answer is that there is no one answer to whether or not your dog is a legitimate business expense. CRA doesn't have a definitive ruling on this matter and it is approached on a case by case basis. If you look into the case law, you will see instances where it has been allowed and instances where it has been thrown out.

What should you do about your animal expenses?

a) you can proceed with your plans to write off you pet and hope that you could defend it to a tax auditor if that situation should ever arise.

b) you could contact Revenue Canada and be proactive and request a ruling right off the bat.

Basically precedent shows that you are allowed to claim animal expenses if the animal was purchased and is only used for business purposes. That being said, you better be prepared to back it up, should you ever get questioned by Revenue Canada.

Have a Wonderful Wednesday.

What the Heck are Retained Earnings?

2010-06-22T08:00:00.000-06:00

Each year that you do business you make a profit or a loss. As we had discussed before, the balance sheet is a report that looks at the picture of your company from its inception. The retained earnings show the profit and loss of the company to date less any dividends that are taken out.

So if my profit from year one is $30,000 and then I had a loss of $15,000 in year two and a profit of $6,000 in year three, my retained earnings at the end of year three would be $21,000.

Retained earnings demonstrate what a company did with its profit. The breakdown of this would be provided on the Retained Earnings Statement.

Have yourself a wonderful day!

Making Friends in Business

2010-06-21T08:00:00.001-06:00

All lasting business is built on friendship. Alfred A. Montapert

Our biggest asset when it comes to building our business is networking and referrals. How do you know that a business is one that you want to deal with? You ask a buddy or a business associate or you even may google it.

We look for credibility through those people that we already trust. Can you buy credibility? I suppose you could try, but unless integrity and accountability are already cornerstones of how you run your business, there is probably little that money could do.

Be friends with your clients. Ask about things that they are interested in. Comment about events you know they have coming up. Participate in golf tournaments. Remember life happenings such as new babies and birthdays. When you genuinely care about your clients, you could never pay enough money to equate to the advertising you will generate.

Friendships build business.

Have a great week!

A Little Laugh at/with Accountant's

2010-06-18T08:00:00.002-06:00

The company owner is dying and calls in his lawyer and his accountant. The owner says: "I am dying and I want to take my money with me. At my funeral put these envelopes in my coffin". So at the funeral, the lawyer and the accountant put the envelopes in the coffin. But, on the way home the lawyer felt bad and told the accountant that he had opened the envelope, found one hundred thousand in cash and had taken fifty thousand out. The lawyer had justified that as his fee, but now he felt bad. The accountant responded: "How could you have disregarded a dying man's last request? How could you charge a fee of fifty percent? You should be ashamed of yourself. Then, the lawyer reacted: "What did you do? You gave him all his money?" The accountant repied: "Yes, I gave him all his money, but I left a personal check for the full amount".

*****

To the optimist, the glass is half full. To the pessimist, the glass is half empty. To the accountant, the glass is twice as big as it needs to be.

*****

An accountant was crossing a road one day when a frog called out to him and said, "If you kiss me, I'll turn into a beautiful princess". He bent over, picked up the frog and put it in his pocket. The frog spoke up again and said, "If you kiss me and turn me back into a beautiful princess, I will stay with you for one week". The accountant took the frog out of his pocket, smiled at it and returned it to the pocket. The frog then cried out, "If you kiss me and turn me back into a princess, I'll stay with you and do ANYTHING you want." Again the accountant took the frog out, smiled at it and put it back into his pocket. Finally, the frog asked, "What is the matter? I've told you I'm a beautiful princess, that I'll stay with you and do anything you want. Why won't you kiss me?" The accountant said, "Look I'm an accountant. I don't have time for a girlfriend, but a talking frog, now that's cool."

*****

Important Revenue Canada Deadlines

2010-06-17T08:00:00.002-06:00

There are quite a few deadlines that small business owner's need to recognize with Revenue Canada. I thought it would be helpful to summarize them here.

GST

GST is due one month after the period end date for quarterly and monthly filers. So, if your period ends May 31, your gst remittance is due June 30. If you are an annual filer then your remittance is due three months after your period end date. So for a May 31 period end, your return is due August 31.

Payroll

For the most part payroll remittances are paid monthly. Your remittance is due the 15 days following the period end. So if your period end is May 31, your remittance is due on the 15th of June. This is one remittance that you want to file and pay on time. The penalties for this tax are higher, because you are dealing with your employees money as well.

Any T4's or T4A's that you produce are required to be filed by the last day of February following the previous calendar year.

Corporate Tax

Corporate taxes must be filed no later than six months after the corporate fiscal year end. For a May 31 year end your taxes must be filed by November 30. The catch in this scenario is that any money owing must be paid within three months after your fiscal year end. So for a May 31 year end your money owing must be paid by August 31.

Self Employment Taxes

For the self employed your T1 return must be filed by June 15, but payment for amounts owing must be paid by April 30.

When you owe money or remittances to the government and the due date falls on a Saturday, Sunday or Public Holiday, your return is considered on time as long as it is received or postmarked for the following business day.

The week's almost over. Enjoy your day!

Making Medical Expenses A Business Expense

2010-06-16T08:00:00.000-06:00

Many small business have made provisions for medical and dental expenditures through plans like Blue Cross. However, many small business owners are trying to stay afloat and may not be able to afford that type of insurance. The reality is that we still have to pay for the medical and dental expenses that we incur. Or what if you do have a medical plan, but it doesn't cover 100%. The question today is, how can we use those medic expenses we have to pay for to our businesses advantage?

The answer I am going to give today is one that is gaining popularity among small business owners. The Answer: A medical trust through a variety of different third party medical plans. The concept is very easy and you only pay the admin fees (which are pretty nominal, around 10%) when you incur the expenses.

Here is an example of how they work:

A) I spend $200 on glasses and submit my receipt to my corporation.
B) The corporation then sends the medical trust $221.40 ($200 + 10% + GST on the 10%)
C) The medical trust then sends you a cheque for $200.

The end result is that the corporation is now able to claim a medical expense for $220, which will lower the bottom line.

If you were to claim the medical expenses on your personal taxes you would only get a percentage of the full amount as an eligible deduction. By using a medical trust you are able to use the full amount on your corporate books.

Another advantage of this type of system is that the variety of expense is greater than a regular medical insurance. Depending on your plan, you can write off naturopaths, nutritionists, massages and the list goes on.

There are lots of different providers out there. We have a couple of brokers that we can refer you to if you want more information. Just know that you are not limited by traditional services. Think outside the box.

Have a fantastic day!

My Enemy: The Miscellaneous Account

2010-06-15T08:00:00.002-06:00

My biggest pet peeve when it comes to accounting software is their inclusion of a miscellaneous expense file.

The miscellaneous expense account is deemed for expenses that are too insignificant to have their own expense account. A lot of companies will use this account to put items in that they can't classify.

The problem with all this miscellaneous nonsense is that at some point you are going to have to classify these expenses. It has to fit into some category. My question to you as a business owner is this: Is it easier to classify today or try to remember what the expense was a year later (or more in some cases)? My answer would be that even if you don't think it fits into an existing account, you should create one that makes sense to you that you can explain later rather then lumping it with unrelated expenses in a miscellaneous account. For instance, if you have drycleaning expenses, you could create a drycleaning account. Your accountant now has a clear understanding of the expenses contained in that file and can allocate it where they deem appropriate.

In all things accounting, keep it simple. Delete the temptation of the miscellaneous account right from the start and never use it.

Have a wonderful day!

Are You Flexible Enough to Flow With Change?

2010-06-14T08:00:00.000-06:00

"Whosoever desires constant success must change his conduct with the times."
— Niccolo Machiavelli

I am a planner. I love to have a schedule, chart, direction, etc. I love to research, develop and find someone else to execute :) You would think with how much energy I put into a plan that I would be devastated by any diversions. That would be an incorrect assumption. I love a plan, but more than a plan, I love to figure out the contingency plan if all doesn't go according my original vision.

Are you like that with your business? Or do you get hung up when your plans get derailed? Are you able to have the flexibility when life demands it?

Change is inevitable. Business is not going to work according to every detail you plan. Learn to accept change and use that skill to your advantage. The people that made it through the recent financial downturn with their businesses thriving were the ones that used the change to their advantage. Instead of lamenting about the situation they were in, they strategized and came out on top.

Plan for the future of your business. We all need to make plans. But don't allow the diversions that will come up to stop your momentum.

Have a great week!

Some Money Funnies

2010-06-11T08:00:00.000-06:00

The banks have a new image. Now you have "a friend.". . . your friendly banker. If the banks are so friendly, how come they chain down the pens?
--Alan King

I went to the bank and went over my savings. I found out I have all the money that I'll ever need. .. . If I die tomorrow.
--Henny Youngman

Children are stupid. That's why they're in school. I'd lecture for an hour about percentages and interest rates and at the end I'd ask one simple question, "You put ten grand in a bank for one year at 5 percent and what do you get?" Some kid would always yell out, "A toaster."

The safest way to double your money is to fold it over once and put it in your pocket.
--Kin Hubbard

Your Best Bet is to Be Proactive with Rev Can

2010-06-10T08:00:00.000-06:00

Many of the clients that approach us have multiple envelopes from Revenue Canada that have gone unopened and unanswered. Maybe that is a situation that is currently plaguing you. It may seem easier to avoid the government in the hopes that they will go away. The honest truth is that they will not go away and your situation is only going to grow the more you ignore.

It is always best to file with the government on time and avoid any late filing penalties. Even if you don't have the cash to pay them right away, remember that you are going to accrue the interest regardless of when you file. At the very least you can eliminate one penalty by filing on time.

In the vein of being proactive, you should also contact the government immediately if you owe money and can't make the full payment. Revenue Canada is a tax collection agency. Their objective is to collect amounts owing to them. If you approach them before they have to go after you, they are more likely to be willing to work with you.

If you are finding yourself in dread as you go to sleep at night thinking about Revenue Canada, please contact us or another professional and let them provide you with the knowledge that will allow you to move forward and relieve your fears. Bruce Lee said that people fear what they do not understand. The more you understand how to work with Revenue Canada, the less there is to fear.

Have a really wonderful, stress free day!

Vehicle Write Offs: Answering Your Questions

2010-06-09T08:00:00.000-06:00

My favorite kinds of blog entries are the ones that come from our clients and the real time questions they are asking us. We received an email from a building contractor yesterday asking "If we buy a truck – NOT through the company – based on our own Financial “standing” – can we still put the payments through the company? Or get reimbursed by the company?"

The very simple answer is yes. There are times when your business doesn't have the credit history to warrant major purchases by creditors. So, you have to rely on your personal credit. The vehicle this particular client is purchasing is going to be used exclusively for their business, so they can set up the payments to come directly out of the business account.

They could also have the business pay them each month if they were to choose to run the payments out of their personal account. This scenario would be more beneficial if the truck being purchased wasn't going to be used exclusively for the business. In that case the company could pay the owner for the percentage of the business use.

What Do You Know About Accrued Liabilities?

2010-06-08T12:27:00.002-06:00

Generally speaking accrued liabilities are amounts that you owe but didn't occur in the reporting period and haven't been recorded yet under accounts payable.

In simple terms: Accrued liabilities are expenses that you want to record today, but don't yet have an invoice for.

For the most part accountant's will put their fees under this account. This allows you to use the expense of the work for the taxes in the year that it happens.

Wages, sales tax, rent, etc are all items that could be used as an accrued liability.

Enjoy your day!

New Blog & Updated Site on the Way

2010-06-05T08:53:00.002-06:00

We have been an electronic hiatus which is about to come to an end starting on Monday. We are pleased to relaunch the blog and our shiny new website.

See you Monday.

Do You Know Yourself?

2010-05-24T21:28:00.002-06:00

Know yourself and you will win all battles - Sun Tzu

What is your business style? Do you know and understand your strengths and weaknesses?

There are a lot of resources available to put your finger on what makes you tick. Life Languages and Kiersey Temperament are two that we have used in our office.

My husband and I had a lot of difficulty when we started our company because we are very opposite in our personality strengths and weaknesses. We had to learn how to use our strengths to our advantage when it came to delegating organizational responsibilities. We still have our moments where our personalities can clash, but when we are working within the parameters of our personalities, we make an awesome team!

The better you can understand yourself and those around you, the more you can stratagize and find greater success.

Have a great Monday.

Fun Friday

2010-05-21T08:00:00.000-06:00

Terminology Tuesday

2010-05-18T08:43:00.002-06:00

Today we are going to look at the Trial Balance.

If you have been in business for a bit, you may have heard your accountant ask to see your trial balance. But what exactly is the Trial Balance?

The Trial Balance is a worksheet that shows all of the accounts in your general ledger with their amounts placed next to them in their respective debit and credit amounts. The aim of this report is to show that the debit and credit columns balance or equal to each other.

This report gives a quick snapshot of the balance sheet and income statement for a company. This report gives a year end worker all of the information they would need to complete your taxes.

Have a great Tuesday.

Motivational Monday

2010-05-17T08:00:00.000-06:00

Winning is not a sometime thing; it’s an all time thing. You don’t win once in a while, you don’t do things right once in a while, you do them right all the time. Winning is habit. Unfortunately, so is losing. – Vince Lombardi

I am a dreamer. I have many ideas buzzing around in my head all the time. Maybe like me, you have the entrepreneurial bug in you and can sometimes find yourself lacking focus. The only way to combat that instinct is to develop positive habits. Allow time for yourself daily to indulge in your whims and fancies, but keep the majority of your day productive. Do the things that need to be done. I find it very easy to get sidetracked if I don't have a plan for my day. It is even easier for me to lose my focus if I haven't allowed time in my day to be creative. It's all about managing your personality to enable your business to succeed. Take time to dream, but get the work done as well.

Have a great week.

Fun Friday

2010-05-14T08:00:00.000-06:00

A guy in a bar leans over to the guy next to him and says, “Want to hear an accountant joke?” The guy next to him replies, “Well, before you tell that joke, you should know that I m 6 feet tall, 200 pounds, and I m an accountant. And the guy sitting next to me is 6 2″ tall, 225 pounds, and he’s an accountant. Now, do you still want to tell that joke?” The first guy says, “No, I don’t want to have to explain it two times.”

The accountant had just read the story of Cinderella to his four-year-old daughter for the first time. The little girl was fascinated by the story, especially the part where the pumpkin turns into a golden coach. Suddenly she piped up, “Daddy, when the pumpkin turned into a golden coach, would that be classed as income or a long-term capital gain?”

Accountant after reading nursery rhymes to his young child: “No, son. When Little Bo Peep lost her sheep that wouldn’t be tax deductible, but I like your thinking”.

Tax Agency Thursday

2010-05-13T14:12:00.002-06:00

One of the things that has always bothered me is that there are so many rules that the government has for business owners, but the majority of the owness is on the business owner to find it out. That can be a daunting task.

The government is not without access to the education. In fact, they regularly run different free seminars that can be found on their site.

Here is a sample:

E-Services for Business

The seminar focuses on:

GST/HST NETFILE
My Business Account
Electronic payments
Business Registration Online (BRO)
Payroll Deductions Online Calculator
Filing Information Returns Electronically
E-PD7A, Statement of Account for Current Source Deductions
Corporation Internet Filing
Electronic mailing lists
Represent a Client

GST New Registrant Seminar

Session will cover:

What is the GST/HST and how does it work?
How do you report GST/HST?
What do you need to put on your invoices?
What can you claim?
Where do you get help?

Small Business Information Seminar

Payroll module: Deductions--What do you need to take off of your employees' cheques; remittances--When are your payroll remittances due and what are your responsibilities; reporting--filing T4s. This module also outlines employment relationships to help you determine whether a worker is an employee or a self-employed individual.

Income tax module: Starting your business, record keeping, fiscal periods and accounting methods, rights and obligations, payment of taxes, income and expenses, types of income, and capital vs. operating and capital costs. A representative from the province of Alberta will also present information pertaining to corporations and the related provincial responsibilities and procedures.

GST/HST module: This module gives you general information about GST/HST. Do you need to register? How do you register? How to complete the GST/HST return. If you have attended a GST/HST New Registrant Seminar you do not need to attend this module as it is the same presentation as the one offered in the evening GST/HST New Registrant workshop.

Take a look for yourself and see if there is something for you.

Have a great Thursday.

Write Off Wednesday

2010-05-12T09:29:00.002-06:00

Today we are going to look at mileage.

If you don't have a lot of expenses associated with your vehicle, it might be more beneficial for you to record your vehicle expenses through mileage (or the simplified method). You will need to show some consistency with whatever method you choose.

In Alberta, the 2009 rate is 51.5 cents per KM. The 2010 rates will be released in 2011. For this method to be used, you will need to keep a mileage log of all trips the vehicle was used for business. If your vehicle is used 100% for business then you will need the KM's from the start of the year and then subtract the KM's at the end of the year.

If you would like more information on your province's rates or rates from previous years, please click the title of this post.

Have a great Wednesday!

Terminology Tuesday

2010-05-11T08:00:00.000-06:00

Today we are going to look at the term "Accounting Period".

The accounting period is the time period for which your accounts are prepared.

If you are a sole proprietorship, then your accounting period is from January to December.

If you are an incorporated company, then you have some flexibility in designating what you want your accounting period to be. It is generally from your incorporation date to 12 months from then.

An accounting period is generally 12 months.

Have a wonderful Tuesday.

Motivational Monday

2010-05-10T15:59:00.003-06:00

People need trouble - a little frustration to sharpen the spirit on, toughen it. Artists do; I don't mean you need to live in a rat hole or gutter, but you have to learn fortitude, endurance.

William Faulkner

It can be a challenge as an entrepreneur, a pioneer, and a visionary to find the fortitude to move forward each day. I often find myself getting a new idea and loving it while it is bright and shiny and then being completely derailed if one element falls apart. If I would stick in for the long term, then I could see my idea blossom.

My challenge today is to put together a set of tasks that are attainable in this day. Don't worry about tomorrow, be successful in this moment and you will find the fortitude that you need.

Have a great Monday!

Fun Friday

2010-05-07T08:00:00.000-06:00

Tax Agency Thursday

2010-05-06T16:56:00.002-06:00

Now that tax season has wrapped up, we want to give you a couple of ways to get a hold of the government regarding your taxes.

If you were expecting a refund and haven't received it yet, you can call the automated Telerefund line at 1-800-959-1956. You will need your SIN, the month and year of your birth and the amount from line 150 of your 2009 return.

If you want to speak with a live person, you can call 1-800-959-8281.

If you owe money and can't afford to pay it all right away, call 1-888-863-8657. The more proactive you are with approaching the government regarding amounts you owe, the better they are in dealing with you.

Have a great Thursday!

Write Off Wednesday

2010-05-05T08:00:00.000-06:00

Today we are going to look at professional fees.

These fees include accounting, legal and other professional services. This includes fees for work that was done for you and for giving advice. If you have someone process your payroll, GST and taxes, these can be included in this expense category as well.

As long as the fee was used during the normal course of your business, you can write it off.

There is an exception to this rule when it comes to legal fees incurred during the purchase of a capital asset. These fees should be added to the cost of the asset.

A lot of sole proprietor business owners forget to add the cost of our services to their taxes at the end of each year. It may not be a huge expense, but every little bit counts.

Have a wonderful Wednesday.

Terminology Tuesday

2010-05-04T20:47:00.003-06:00

Today we are going to define account reconciliations.

The basic premise is to balance the accounts to the bank statement. This process will allow you to find any errors or omissions and be able to make any required adjustments.

The formula for an account reconciliation is:

bank statement opening balance + outstanding deposits - uncleared cheques = account balance

Have a great Tuesday.

Motivational Monday

2010-05-03T08:00:00.000-06:00

Keep your thinking right. And your business will be right.

-Zig Zigler

I find that in my day to day business transactions and really with most of what I do during the day, the tone of the thoughts in my head are often equal to the tone of my day. The days that I am successful are the ones that I have been positive with the things I was thinking. Now this isn't a little miss sunshine point of view on the world. Mostly it is about perspective. I could be frustrated by the fact that there were days last month that I got very little sleep and had to get my children to occupy themselves while I worked. Or I could change the way that I think about the situation and realize that tax season is about 30 intense days out of the year and I can do anything intensely for that period of time and survive.

When you are going about your business today and hit a roadblock, change your perspective on the situation and see how it changes the way you are feeling.

Have a great week!

Fun Friday

2010-04-30T08:00:00.000-06:00

Taxes are due today at midnight! Here is a last bit of tax humour to get you through.

A man was driving along the road when all of a sudden he has to swerve to avoid a box falling off the lorry in front. Seconds later a policeman pulled him over for reckless driving. As the policeman starting writing the ticket he noticed the box was full of nails and tacks.

"I had to serve or I'd have run over those and blown my tyres!" protested the driver.

"Ok", replied the officer, ripping up the ticket, "but I'm still bringing you in."

"What for?!" retorted the man.

"Tacks evasion", answered the policeman.

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“The hardest thing in the world to understand is income tax!”
Albert Einstein

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“Benjamin Franklin said nothing is certain but death and taxes. But at least death doesn’t get worse every year.”
Anon

Have a wonderful day...hope you had a laugh and remember taxes are due at midnight!

Tax Agency Thursday

2010-04-29T11:54:00.002-06:00

In a previous post we discussed the Tax Payer's Bill of Rights. Today I want to introduce you to the office that assists in protecting those rights for Canadian's regarding their dealings with Revenue Canada. The office of The Taxpayers' Ombudsman is held by Mr. J. Paul Dube. This is a relatively new position within the government.

Beside ensuring that the CRA respects the items laid out in the Bill of Rights, the office will also conduct independent reviews of service complaints about CRA, help taxpayers get assistance within the CRA, identify and review service issues within CRA that are not in the taxpayers' interest and give advice to the Minister of National Revenue regarding CRA service issues.

Now this office will generally only step in when you have exhausted the steps and procedures laid out by CRA, but it is good to know that when you have reached the end with CRA, there is still an avenue at your disposal.

Have a fantastic Thursday!

Write Off Wednesday

2010-04-27T11:45:00.004-06:00

Today we are going to look at Bad Debt.

Bad Debt is money owed to your company (receivables) that you won't collect from your client.

Bad Debt impacts the books when you are using the Double Entry or Accrual Method of Accounting. You are recording sales as they occur not when you receive the money. That means that you are paying taxes on income that will never come into your pocket.

Bad Debt is an expense in which you can offset the income and recover the GST you claimed.

Most business owners will provide a listing to their accountant at the end of the year and then the adjustment will be made on the books.

Have a healthy day!

Terminology Tuesday

2010-04-27T10:32:00.002-06:00

Today you get a two for one on Terminology Tuesday to catch us up from last week.

Cash Method Accounting

The cash basis of accounting is when you record transactions in the period where cash for revenues (income) is received and expenses in the period that they were made. Basically, cash basis is when you put entries in the books based upon when the cash exchanged hands.

Double Entry Accounting

This is the most common and some would consider more accurate way of recording your books. In this method, you record invoices when they go out and bills as they come in. The revenues and expenses are recorded as they are incurred rather than when they are received or paid. A second set of entries is then made when the money has been received by the customer and paid to the vendor.

Have a wonderful Tuesday!

Motivational Monday

2010-04-26T08:00:00.000-06:00

We make a living by what we get, we make a life by what we give. - Winston Churchill

I firmly believe that what you give will come back to you. There are many times in my business life that I have been approached by new bookkeepers looking for some advice in getting started. I guess that I could try to protect my own interests and abstain from talking with them. Many of them have mentioned that others they have called have turned them down. My experience starting out in business was assisted by many mentors that helped me along the way.

It does take a bit of time on behalf of the business mentor, but the rewards will definitely be gained by both parties.

My main purpose with my thought today is to help you remember where you were when you first started out in your industry. Remember the people that were there to assist you. When you are approached, just remember and act accordingly.

Have a great Monday and a great week!

Fun Friday

2010-04-23T08:00:00.000-06:00

Revenue Canada decides to audit Grandpa, and summons him to the Canada Revenue Agency office.

The auditor was not surprised when Grandpa showed up with his attorney.

The auditor said, 'Well, sir, you have an extravagant lifestyle and no full-time employment, which you explain by saying that you win money gambling. I'm not sure CRA finds that believable.

I'm a great gambler, and I can prove it,' says Grandpa. 'How about a demonstration?'

The auditor thinks for a moment and said, 'Okay. Go ahead.'

Grandpa says, 'I'll bet you a thousand dollars that I can bite my own eye.' The auditor thinks a moment and says, 'It's a bet.'

Grandpa removes his glass eye and bites it. The auditor's jaw drops.

Grandpa says, 'Now, I'll bet you two thousand dollars that I can bite my other eye.'

Now the auditor can tell Grandpa isn't blind, so he takes the bet. Grandpa removes his dentures and bites his good eye.

The stunned auditor now realizes he has wagered and lost three grand, with Grandpa's attorney as a witness. He starts to get nervous.

'Want to go double or nothing?' Grandpa asks 'I'll bet you six thousand dollars that I can stand on one side of your desk, and pee into that wastebasket on the other side, and never get a drop anywhere in between.'

The auditor, twice burned, is cautious now, but he looks carefully and decides there's no way this old guy could possibly manage that stunt, so he agrees again.

Grandpa stands beside the desk and unzips his pants, but although he strains mightily, he can't make the stream reach the wastebasket on the other side, so he pretty much pee's all over the auditor's desk.

The auditor leaps with joy, realizing that he has just turned a major loss into a huge win.

But Grandpa's own attorney moans and puts his head in his hands.

'Are you okay?' the auditor asks.

'Not really,' says the attorney. 'This morning, when Grandpa told me he'd been summoned for an audit, he bet me twenty-five thousand dollars that he could come in here and pee all over your desk and that you'd be happy about it!'

Don't Mess with Old People!!

Tax Agency Thursday

2010-04-22T08:50:00.003-06:00

On this Earth Day we want to acknowledge the steps that Revenue Canada has made to generate less paperwork. There are many systems that have been computerized, such as filing taxes. There are still many steps to be taken by Revenue Canada, but they are moving in the right direction.

We also try not to generate paperwork when possible. For instance, when we complete a client's taxes, our preference is to e-mail a copy rather than print one out. Not only does this produce less paper, but it also makes it easier to locate through a simple search in your e-mail.

For more tips on transforming your office into a more paperless one, check out this article.

Have a great Thursday.

Write Off Wednesday

2010-04-21T10:19:00.002-06:00

Today on the abridged version of Write Off Wednesday due to tax season wrapping up, we send you over to the Revenue Canada website. Here you will find News Releases that the government sends out. Sometimes these can be worth your while.

Have a great Wednesday.

Terminology Tuesday

2010-04-20T09:19:00.002-06:00

We are still working on wrapping up tax season. So for today's entry, I am going to send you to a wonderful website that can answer any question you have about taxes or at least lead you to a place where you can find the answer.

http://www.taxtips.ca

Have a wonderful Tuesday!

Motivational Monday

2010-04-19T08:00:00.000-06:00

The pressure of tax season is building and after taking a weekend off for some personal things I don't find much time for blog writing. I want to continue inspiring your Monday, so here is a poem that inspires me. Enjoy!

Follow Your Dream
by Amanda Bradley

Follow your dream.
Take one step at a time and don't settle for less,
Just continue to climb.
Follow your dream.
If you stumble, don't stop and lose sight of your goal
Press to the top.
For only on top can we see the whole view,
Can we see what we've done and what we can do;
Can we then have the vision to seek something new,
Press on.
Follow your dream.

Fun Friday

2010-04-16T08:00:00.000-06:00

With taxes due in just two weeks, we thought you would enjoy this irreverent look at this time of year. Enjoy and have a great weekend!

Tax Agency Thursday

2010-04-15T10:55:00.005-06:00

Let's look at some tax myths on this Tax Agency Thursday.

Myth: Revenue Canada will catch any mistakes I make on my return.

Fact: While the CRA will correct any math errors or any omissions of T-Slips that they have received, they will not optimize your taxes for you. If would have had a better return by putting donations on your spouses return, they will not change it for you.

Myth: I'm not doing my taxes properly if I didn't get money back.

Fact: Getting back money from the government means that your tax plan was to have them act as a savings account for you. Some of us don't mind the return each spring, but you should educate yourself with a trained tax planner so that you understand how your money could be working better for you.

Myth: If I make a mistake, I should refile my taxes to correct it.

Fact: You should not refile your taxes. You should instead fill out a T1-ADJ form and submit to CRA. You can also write a letter explaining to the government what the changes are that you want made. Be sure to include your SIN.

If you have any myths that you want verified, please feel free to contact us.

Have a great Thursday!

Write Off Wednesday

2010-04-14T08:00:00.000-06:00

As we are all in the midst of tax preparation, I am going to be short and sweet with my topic today.

For your 2009 tax year any computer hardware and software purchases can be written off at 100%!!!!!

This incentive will continue to February 2011. Something to think about if you are looking at making purchases this tax year.

Sixteen days left to file your taxes on time.

Have a Wonderful Wednesday!

Terminology Tuesday

2010-04-13T08:43:00.003-06:00

The term we are going to look at today is Chart of Accounts.

The chart of accounts is the coded listing of all the accounts in your general ledger. The chart of accounts is used to sort and record business transactions.

The chart of accounts contains income statement accounts and balance sheet accounts.

The typical format for the Chart of Accounts is as follows:

Balance sheet accounts

Income statement accounts

The Chart of Accounts can be as simple or complex as your business needs it to be. If you have many departments you can sort the expenses accordingly within the chart of accounts. My personal philosophy is to keep it simple, because your chart of accounts will dictate what your income statement and balance sheet will look like.

Hope that answered your questions on the chart of accounts. Have a great Tuesday!

Motivational Monday

2010-04-12T09:52:00.003-06:00

"If and When were planted, and Nothing grew."
Proverb

Procrastination - It's that concept that gets us all from time to time. April is almost half way through and I would bet a lot of you are still scrambling to get the motivation to get your taxes put together. I am here today to serve as another reminder, but also as encouragement to you that you can do it! It will be worth your peace of mind to at least know where you stand and hey, you never know, you might even get some money back!

Have a great Monday and do yourself a favor and get off of the procrastination train.

Fun Friday

2010-04-09T08:00:00.000-06:00

Tax Agency Thursday

2010-04-08T08:58:00.004-06:00

Today on Tax Agency Thursday we are going to take a look at filing your tax returns.

We are going to look at the three ways that you can personally file your return.

If you have filed taxes previously, then you will have received a document that contained some important information to help you file your taxes in the following ways. The document would contain labels for sending it in by mail. It would contain telefile or netfile codes as they pertain to your tax situation based on your previous filings.

By Mail

If you complete your taxes by hand using a tax package that was either mailed to you or picked up from your local post office, you can submit it to the government by mail. The labels from the document I mentioned previously will have the tax centre you are to send your taxes in to. Or you can click the link in the previous sentence and find your tax centre's address.

When you send in your taxes by e-mail you are required to provide copies of all deductions and credits you are claiming such as T-slips, donation & medical receipts, child fitness, child care, home renovation, etc. If you are a sole proprietorship then the receipts pertaining to your business do not get sent in, but you are required to keep them for up to six years in case of an audit.

The government is trying to encourage less paper use as they have to store all the paper copies that are sent in. That is why they have been promoting and are encouraged by the growth in the other two methods for filing.

Telefile

Telefile is an option for individuals with very simple taxes. You will find the access code for Telefile on the document that they send out. If you do not have an access code, but you feel that you would qualify, the you can call them at 1-800-714-7257 and discuss it with them.

Telefile works by providing the dollar amount for specific lines on your completed tax return. You are not required to send any paperwork in after you Telefile, but you are still required to keep it for 6 years in case of audit.

Netfile

This is definitely becoming one of the more popular ways to file your taxes. To use Netfile you will need to use government approved tax software that will create a .tax file that you can send in to the government in lieu of paperwork.

You will need the access code mailed to you by the government. If you did not receive that document or lost it you can go here and using your date of birth, SIN and line 150 from your previous tax return, they will instantly generate a new access code for you.

There are requirements and restrictions that may limit those who can use this system, but most tax softwares should guide you through the determination of your eligibility.

Using this method you do not send in the paperwork for your taxes. You are again required to keep for six years in the event of an audit.

Filing by Telefile and Netfile do tend to produce faster refunds if you are receiving one. Sometimes by up to one or two weeks faster than the mail in returns.

Whatever way you choose to send in your taxes, I hope we were able to provide you some good information and shed some light on some choices you may not have been aware of.

Have a great Thursday!

Write Off Wednesday

2010-04-07T08:00:00.000-06:00

In the spirit of personal tax season, which only has a few weeks left to go, I thought that today we would look at the Home Renovation Tax Credit.

The time period for this credit was January 29, 2009 to February 1, 2010. It is based on eligible expenses for improvements to your house, cottage or condo. Select "eligible expenses" to go to the lengthy list by Revenue Canada.

The credit applies to amounts after your first $1,000 and has a limit of $10,000. This amount can be claimed or split among you and your spouse, but can not exceed the limit jointly between you.

You must keep copies of all of your receipts, invoices, agreements, etc. These documents must clearly depict the type of expense as it relates to your renovation. The government has some other criteria for acceptable supporting documentation.

It should be noted that this is an unrefundable tax credit. Which means that it will lower your federal income tax to $0, but will not generate a refund.

Can you hire a family member to do renovations for you? The answer is yes, but all other conditions still apply and your family member must have a GST number.

You can not claim these expenses for any part of your property that you make money on. So, if you rent out the basement and do renovations down there, then you are not able to claim those expenses as part of this credit.

For further information, call CRA's individual income tax enquiries service at 1-877-959-1272 or click on today's title and you will be taken to the correct page on the Revenue Canada site.

Hope this sheds some light.

Terminology Tuesday

2010-04-06T08:00:00.001-06:00

Today we are going to look at debits and credits.

These are perhaps the most misunderstood tools of accounting. For most of us it is because we are consumers of the banking industry and so we look at debits as being an subtraction from our account and credits add to our accounts.

To understand debits and credits the way that accountant's do, you now have to look at transactions from the banks perspective. When you debit their accounts you are actually adding to their money supply. When you credit their accounts you take money out of their supply.

Here is a cheat sheet to tell you how debits and credits affect the types of accounts we have discussed in previous Terminology Tuesday's.

Increase $ amount Decrease $ amount

Asset	Debit	Credit
Liability	Credit	Debit
Owners Equity	Credit	Debit
Income	Credit	Debit
Expenses	Debit	Credit

Have a great Tuesday!

Motivational Monday

2010-04-05T09:01:00.002-06:00

Perhaps the most important word in success and happiness is the word,"ask."
Brian Tracy

Asking for help is probably also the hardest thing for us to do. Especially as business owners. We want to maintain the illusion that we can do it all. The simple truth is that we can't. We must know when it is time to pull out the white flag and ask for help.

Whether it is in the beginning of your business or when you are over your head. Make sure you give yourself permission to get help in place. Whether that be more help with the work you do or help with the back end of the business.

Don't be afraid to ask for help. You are not weak for doing so. In fact quite the opposite. It takes strength to recognize when you need assistance.

Have a great Monday.