Blogs

Bookkeeping is the backbone of financial reporting. Poor or inadequate book keeping will result in misleading or inaccurate financial reporting. With this in mind it is important to ensure that you understand that good book keeping is essential to ensure the success of your business and finances.

Bookkeeping:
Is the process of taking all your financial and business transactions for a fiscal year and recording them in a detailed format that will allow for compilation into financial statements, as well as corporate and / or personal tax returns.

Sometimes you just need to take the path of least resistance. It may not always be the most correct or the best way, but so long as it is correct it is still a valid choice. All too often people get caught up in doing things perfectly or the exact way they envisioned as being “correct”. Let me explain. Most people file their GST returns with expenses that apply to the period being filed. Makes sense however, GST credits (expense items you paid GST on) can be claimed in any period up to four (4) years after they were incurred.

I have met more than a few people who I would classify as being wearers of Tinfoil hats. You know the type of people who think the government is scanning their brain, and that the aliens are going to find them and harvest their organs unless they are “off the grid”. These same people are afraid of the CRA “knowing” how much money they have, where they do their banking, knowing where they live, etc., and think that any amount of tax is too much.

For those of you who regularly read my blog you may have noticed a pattern. I am usually bitching, complaining, and telling you how bad the CRA is at almost everything. I am always right and have the proof to back it up. All my stories are true and based on actual events. That said, NEVER let it be said that I am not fair. “Story Time!!!”

If you have ever heard the phrase “100% tax deductible” and believed it keep reading. I hate this phrase, amongst many others, because it is misleading and just plain WRONG! This phrase makes most people think that if they spend $1 then they will save $1 in taxes. If you haven’t figured out based on my tone of voice that this is wrong then here it is. THIS IS 100% WRONG AND 100% BS!!!

Time for a word of warning. Paying cash for things is ok and is totally LEGAL. After all cash is legal tender and it is not against the law to use cash. But if you want to claim cash payments made for business purposes as a tax deduction you better (MUST, MUST, ABSOFRIGINLUTELY MUST) have invoices that document the expense. You also MUST have withdraws that correspond directly to the amount of the invoice. You MUST be able to directly correlate invoices and payments. Have I used the word “MUST” too much? I don’t think that I have used it enough, because this is important.

Alright here we go again. ITS STORY TIME! You just have to know that when I start off a blog like that it can’t be good. And you would be correct.

We (I) regularly get phone calls that start off “my refund is less than you said it would be”, or “The CRA says my balance owing is higher than you told me it would be”. This is immediately followed up by “why?”, or, “What did you do wrong?”

It has become time to dispell another myth and explain something that causes a lot of confusion and problems. The issue is tax free allowances. The purpose of a tax free allowance is to allow corporations to reimburse employees for corporate costs that the employee pays, or to give employees money in advance so that they can pay expenses they will be incurring for the corporation.
 

With the New year here I figured it would be good to start with something positive and helpful. As you may have guessed from the title I am going to preach on budgeting. I say preach, because most people don’t want to do it, and don’t want to hear about it.