When you think about incorporation, it is typically a decision driven by an accountant because taxation often is the reason why you incorporate your business. That said, taxation should not be the sole reason to incorporate.
You need to look at your business and work with your advisors, specifically your lawyer and accountant in this case, to determine the best course of action.
1. Think About The Risk of Your Business
When I say risk, I mean the potential for lawsuits and getting sued. That should be a primary factor when deciding to incorporate your business or not.
If… Continue reading
The first thing you have to remember with a CRA audit or another issue involving Canada Revenue Agency is that you’re in an unfair battle, meaning that they have unlimited resources to work against you.
It’s interesting when you take a look back at how many court cases have actually gone through to the Supreme Court. That’s really the end fight but most of the cases that make it that far either have a lawyer involved or it’s a large enough company that they can afford to spend the money needed to go that route.
When You Need A… Continue reading
Should individuals have a tax-free savings account?
Yes. They truly are the best thing since sliced bread.
TFSAs are the government giving us the capability to earn money tax-free. If you have any investments that are not stuck in RRSPs or are not in a holding company, they should be in a tax-free savings account.
If you can pull money out of a corporation at a tax preferential rate and then put money into your tax-free savings account, you should be doing it. You cannot borrow money and put it in your tax-free savings account and deduct the interest.
When… Continue reading
The difficult part with predicting whether or not you will be targeted for a CRA audit is that Revenue Canada has so many different ways they choose who they are going to audit. Whether it’s because they are looking at a specific industry or transactions that have occurred, it’s fairly unpredictable for the most part.
I always advise my clients to assume that they will get audited because over the life of your business, the chances are very high you will be audited in some capacity. You need to be prepared.
There are definitely a few things to watch for… Continue reading
When running a business, it’s natural to want to do everything the “right” way the including figuring out how much you should be paying yourself as the business owner. Kelowna accountants are not unique when it comes to being inundated with this same question from long time business owners and startups:
How much should entrepreneurs pay themselves?
When somebody asks me this question, the short and easy answer I always give is, you can’t take out more than the company makes because you are going to kill the business. In the long run, a business will always fail if too… Continue reading
Whether it is personal or for a corporation, you’re coming up to a specific date that (for tax purposes) makes a difference. It’s wise to be aware of how investments and purchases around this time can affect your bottom line so you can make the right decisions at the right time.
Pay attention to these four year-end tax tips and spare yourself the feeling of wishing you had acted when the time was right. After December 31, there is no going back.
1. Review Your Investments
The first thing you have to do is you have to look at… Continue reading
Obviously right now the Bank of Canada thinks that Canadians are in too much debt and a lot of officials agree. There is a lot of discussion on the news about there being too much debt and that’s why there have been changes to the mortgages rules – the government’s attempt to control you from accumulating too much debt.
Basically everywhere you look right now, people are talking about debt.
So How Much Is Too Much?
The answer is that it’s not about debt, it’s about what you have debt for. You will hear people talk, especially accountants, about good… Continue reading
Every Revenue Canada audit is different but generally my first comment to people is to try not to get too stressedabout it. It’sa process and a part of Revenue Canada’s continuing efforts to ensure the right amount of taxes are paid. They’re not picking on you eventhough most people tend to feel like that is the case.
There could have been a red flag that popped up or a particular reason why it came up on their end, but quite often there is just a lot of random, annual audits.
The first thing that generally happens… Continue reading
Okay, here’s the big secret…there are none! You’ll have to forgive my sense of humour on this subject because as a Kelowna accountant and business advisor, I constantly get asked by my clients about secret tax loopholes or special tax breaks they should know about.
Although there aren’t any special secrets or tricks, there are various expenses that many business owners don’t fully take advantage of or often approach in a way that is less beneficial to them.
A lot of people own their own vehicles and use… Continue reading
One of the first things that I see during a recession is a tendency for people and business owners to start to buckle down and cut costs as much possible. I think this is more of an instinct than anything because in a recession you hear how things are bad out there and out of fear you simply stop spending.
That can be a good or bad decision depending what you… Continue reading