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At the beginning of every financial year, business owners don’t seem to mind the amount of tax that they pay. While most would be looking for ways to spend not more than what they owe, there are others who work on increasing the possible tax refund that they will get. Tax refund helps you secure your future as well as that of your family for it means nothing less than savings. While paying taxes is part of your duty as a business owner, there are ways you can do to help reduce your tax liability. How do you do it?
· Tip 1: Be Charitable
Allot a part of the company’s income to donation. Various charitable institutions are exempted from tax collection. Donating to these institution allows you to have a substantial amount of on-refundable tax credit. Community groups, religious organizations, non-profit hospitals, and colleges are just a few of the institutions you can donate to. When you put money into any of these institutions, you can collect part of the amount, up to at least 75% of your income.
· Tip 2: List Down all your Work Expenses
If you are required to make payouts as part of your employment but are not refunded by your employer, you may be able to use it as part of a tax claim. Cell phone and laptop use for work are usually not reimbursed by the company; thus, making them eligible for tax deductions. All you need to do is make sure that you put on record all of these to be able to make a claim.
· Tip 3: Keep a Record of All your Medical Expenses
Your health plan does not cover several medical expenses. These expenses may be claimable as a non-refundable tax credit. Whether it is the payment, you made to the doctor, attendant care fees and even the ambulance service. All of these can be filed as part of your tax return. Hence, make sure to keep on record all your medical expenses as they could bring about huge savings on your part.
· Tip 4: Work from Home Services are also Included
If you are an owner of a start-up business operating from your home, you can also avail of tax deductions. Most of the expenses that you incur to be able to make income are almost always tax exempted. A portion of the rent, internet expenses, office supplies as well as part of the other maintenance costs are tax refundable.
Keeping a record of all these data and its supporting documents before the filing of tax returns should be a priority. Not only will it help you keep track of your earnings, but it could help you save a lot in the long run too. Don’t wait until the end of the financial year to do it.
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Accounting the flow of money in a business is one of the most critical aspects of its success. It should be of significant concern not only to big corporations but most especially for small-scale enterprises. It is essential to keep track of the bills, overhead expenses as well as receivables because the resources on hand are limited and must be used sparingly.
For a small business owner, it is important to know when resources can be used at a minimum. Whether it is grabbing the opportunity for a tax exemption or minimizing the curbing costs, business owners have to keep a tab of all of it. This is one of the most effective ways to keep track of the percentage of growth and profit margin as well. But how do you get through taking care of all these and running the business as a whole? Here are some tips to help lighten the load:
· Record All your Expenses
It is understandable that your hands can be quite full when it comes to running the business, but keeping a record of all your expenses is a must. It will help you stay right on track regarding expenditures and future planning.
· Keep Track of Changes in Tax Revenue Regulations
A key tip that most business owners should follow is the excellent way to save on business costs is knowing the potential changes in tax revenues and its regulations. Regularly monitor the updates of the government agency that handles this to keep you in the loop of what you are due to pay.
· Remember to Separate Personal Expenses from Business Expenses
Most established businesses already have a clear record of personal expenses ensuring that it does not mix with the record of business expenses. This will ensure that you can see the difference between the two. Also, it is clear which expenditure to cut if ever.
· Outsource Bookkeeping and Other Accounting Services
The best way to keep your business books updated is to have a professional accountant do the work for you. They can ensure that the books are always updated and that the recording is done as systematically as it should be.
At ATS Accounting Inc, we make sure that our team of dedicated individuals offer professional yet affordable rates. If you are looking for a great accounting team, book an appointment with us and expect nothing less than high-quality accounting services today and in the future.
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Do you already have a bookkeeping system in place? If you don’t have one yet, your business accounting could be in big trouble. There is no better way to have a strong bookkeeping and accounting system in place than now. Not only will it make managing the accounts easier, but it will also help you pay your taxes on time and without delay. After all, poor bookkeeping means poor financial management and that’s not how you want to run your business, right?
How do you make sure you are doing your bookkeeping right? Here is a list of mistakes that you could be doing. If the current practice that you haven’t isn’t listed here, you are on the right track.
· First, are you shoebox bookkeeping? You know that you are if you are if you practice putting off all the listing of the finances like how you put all the paperwork in the shoebox. Although referred to as shoebox bookkeeping, this isn’t booking keeping at all.
· Second, are you still using the manual method of accounting? Although the manual process, including the simple use of the spreadsheet, allows you to make a list of the flow of money, it, however, fails to help you identify where the money comes from and goes to. The complicated process of tracking the movement of finances from multiple accounts can be quite tough. It is best to utilize a bookkeeping software that does the job for you.
· Third, not being involved in business processes including the financing could put you in deep trouble. Although it is natural to delegate tasks, it is not always a good practice to ask others to do your financial report and simply have to sign it be involved and learn the process. Even if a professional accountant is doing the work, it is best to learn from what they do to gain a better understanding of what it is you still need to be done.
· Fourth, refusing to reconcile accounts at regular intervals could spell out a financial disaster. Remember that it is best to match the statements in the general ledger to the official business accounts that you have. This may be a simple step, but it allows you to save yourself from bookkeeping mistakes that could cost you your investment.
· Lastly, sticking to the DIY attitude is not going to be helpful at all. Making errors in the accounting system of your company could have huge implication for the success or failure of your business. This may perhaps be considered the most significant mistake a business owner can make.
Save yourself from all the trouble and hire a professional accountant today!
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They say the best kind of savings for the future is when you invest your money into something that will eventually earn you passive income. And for those who mean to retire young to enjoy the benefits of traveling the world, having a property that others pay for to rent is one of the best things life has to offer. The value of the property depends on various factors like its location. The real estate market in Edmonton is at its best, so if you are a landlord, you are in a pretty excellent and financially-stable position.
But every landlord must understand that tax involved in owning a property and having it rented out. The least that you want is to be charged more just because you weren’t paying right or you weren’t paying on time. Penalties and interest can mean losses for you. So before you lose all your passive income to nothing, here are three facts every landlord must-know:
Fact 1: Business Or Rental Income?
Most landlords forget about the difference between these two, but the Canada Revenue Agency defines the difference between the two. When you have your space rented out and only provide water, electricity, parking and laundry facilities, then you simply are a landlord. However, if you begin to offer more services that can be likened to that offered by the hotels, then the nature of your business and property changes altogether. There is no gray area between these two. The government requires you to pay different rates if you consider your business as a business and as a rental for income.
Fact 2: Form T776
This is the form you file to declare the income you get from the rental of your property. It is also referred to as the Statement of Real Estate Earnings Form. There is no one form for all the properties that you have for rent. Instead, you must file a form as such for every property that you have for rent. The form also requires you to solve for the net income as follows: calculate all the expenses incurred in the maintenance of the property including Capital Cost Allowance (CCA) and deduct it from the gross income from all the rent paid.
Fact 3: Deductible Expenses
Not all expenses that you have every month is considered deductible expenses. Instead, you will have to file the deductibles sheet on your property. Here is a quick list of those deductibles that are permitted by the government:
· Maintenance and repairs
· Property taxes
It is essential that you present documents such as receipts upon filing for a claim. These will serve as the proof of such expenses.
How do you get your rental taxes right? Keep these facts in mind. Or better yet, ask help from those who know better. It is always best to consult with an accountant you can trust. After all, these facts are general and that each landlord may have a different situation altogether.