Kevin's blog

As subjects go this one ranks right up there with watching grass grow or paint dry.  I get it.  This is not a sexy or exciting topic.  That’s all true, at least until the CRA auditor shows up at your door.  At this point it gets very sexy as you slowly feel as if you are being bent over … (chick – ah – bow –wah, chick – ah-bow –wah) .  

There is a misconception out there about vehicle expenses that I would like to address.  If you talk to most people they will agree that keeping receipts, especially those for vehicle expenses is really time consuming and cumbersome.  As a result a lot of business people either on advice or though misunderstanding have come to the conclusion that so long as they track their mileage (approximately), they can just expense their vehicle usage using a per kilometer vehicle rate as prescribed by the CRA.

I thought there was enough information already out on the internet about personal services businesses (PSB), but I have had a few calls from people who still were not aware.  I have provided a link below to an article that i found on the internet that i thought was really good information.  In short the PSB legislation is harmful to both the employer and the employee.  There are solutions (please see my previous blog on solutions), but they require the employer and employee to work together and share the cost of setting up the proper structures to insure themselves against negative tax cons

So I got the email (reproduced below) from the CRA.  As an e-filer I get CRA emails on things that are going on.  I want to share this with you so you are not surprised if you get one of these letters.  Contrary to popular belief, CRA are not omnipotent and all knowing.  If you over claimed that meal out with the spouse or padded your kilometers by a couple of hundred, they will not know.  That said, if you filed your taxes and the only thing that is truthful on the return is your name, you may want to consider an amendment, otherwise ignore the letter.

There have been a plethora of articles and blogs written concerning PSB’s.  There have been even more articles written lately since the Finance Department introduced new legislation, and I hate to say it they have been fear mongering and not terribly helpful.  It is important to note that PSB legislation is NOT new, and that it has been around since the 1980’s.  What is new is that the new legislation is punitive in the tax rates that are charged on businesses deemed to be PSB’s.  I am not going to rehash all the negatives of PSB’s and all the bad things that can happen (tax wise) to you. 

If it is not common knowledge please consider yourself warned.  DO NOT go up against the CRA by yourself.  Further, whatever you do, don’t sign anything without consulting a professional.  In the Court case excerpt below you will see that the Taxpayer (I say that because they are not a client) signed a waiver form agreeing to not appeal or object, because they negotiated a settlement with the CRA.  I can’t speak to the agreement, but the fact that the Taxpayer chose to appeal anyway leads me to believe that they had second thoughts after agreeing to the settlement.  From reading the case yo

Okay so it is time for me to rant again.  I am really ticked off and need to vent a little.  A client came to us the other day with some questions that were really straight forward.  No, this is not what ticked me off.  What ticked me off is that he had asked another “accountant” these same questions and gotten very different answers.  No, I am not ticked that he asked someone else.  What I am really upset about is that the answers he got from the “accountant” were wrong!  The answers were not just wrong but were REALLY WRONG!!!!

The title of this blog is a little misleading, and I did it on purpose.  Because as an accountant I know that there are a lot of people out there that do not like (read hate) to pay taxes.  I get it.  I do not like to pay taxes either, but let’s be realistic.  If you are paying taxes it means you are making money, and if you are paying lots of taxes it means you are making lots of money.  I don’t know about you, but given the choice I would rather make lots of money and pay lots of tax than make no money and pay no tax.  If you can swing it, or if you do the right type of planning you can d

I have previously written about accountants, and how not all are created equal.  Designations aside, there are good and bad in every discipline.  CA, CGA, CMA, none designated, it really doesn’t matter.  It all comes down to experience, training and willingness to listen to the client.
 

Anyone who has been reading this Blog for a while is probably wondering if I hate the CRA?  I mean it is rare (read never) that I have something positive to say about them.  No I don’t hate them, but that said they very, very rarely do anything worthy of positive kudos.  Further, if they did their job right I wouldn’t have anything to write about.