AB Business Services Ltd.

EMPLOYEE VS CONTRACTOR EMPLOYEES The relationship is an employer-employee relationship in which the employee is a subordinate ... Provide an adequate employment contract stating the terms, pay, policy, reviews etc. The employer then controls schedules, tasks, workplace etc. The employer must pay and remit CPP, EI and Income tax (CPP employee portion, EI employee portion and Income tax come off the employee’s pay cheque, however there is an employer portion of CPP and EI that the employer must pay) typically would run this through a payroll system Employer would provide equipment etc. Employer must abide by employment laws (breaks, scheduling, holiday pay etc.) Employer and/or employee must provide adequate notice when terminating employment Must provide/file ROEs and T4s CONTRACTORS The relationship is a business-business, contractor works independently Provide an adequate contract stating the terms, duration, pay etc. of their work The contractor controls schedules, tasks, workplace etc. No withholding tax responsibilities (CPP, EI, Income tax) Contractors would provide invoices to payer for work done and payer would pay that amount however is agreed upon Some contractors may charge GST/HST, in which the payer could claim ITCS Contractors typically are responsible for own equipment & operating expenses Contractor and/or payer can terminate the contract at any point without notice In some cases, can provide/file a T4A The most important piece of hiring a contractor or employee is establishing the boundaries of the relationship. Maintain consistency and know your obligations to avoid any rulings from CRA.

TIPS TO MAKE SMALL BUSINESS BOOKKEEPING A LITTLE LESS STRESSFUL Are you one of those small business owners who just love poring over spreadsheets? Probably not! Your business’s books are a scorecard of how well you’re doingbut if you’re not a numbers person, doing your bookkeeping may sound as appealing as a root canal. Still other business owners mean to go over their business finances but get caught up in the day-to-day and never get around to it. No matter how you fee...Continue reading

SOME OF THE BIGGEST CHALLENGES FACING SMALL BUSINESS Starting a business is a big achievement but maintaining it is the larger challenge. There are many challenges every business faces such as hiring the right people, building a brand, developing a customer base and so on. Some issues are strictly small business issues, issues that the large companies grew out of long ago. Some of the biggest challenges for small businesses are: Being dependent on a single client ...Continue reading

SEVEN ESSENTIAL QUALITIES TO LOOK FOR IN A GOOD BOOKKEEPER Excellent communication skills Possessing good communication skills doesn’t just mean speaking clearly. It’s about being able to explain complex ideas in easy-to-understand ways, proactively following up on tasks, asking important questions about your business, and really listening to what you have to say. If your bookkeeper regularly uses accounting and bookkeeping jargon, the conversations you have can feel restric...Continue reading

Free accounting software. Serving Calgary and surrounding communities for all of your accounting needs with monthly and hourly rates available. We can work from your location or remotely from our office. Call or email for a quote today. Andrea 403.999.0548 or [email protected]

SEVEN HABITS OF A SUCCESSFUL BUSINESS OWNER I’ve owned my business for more than twenty years and I’d like to think I’ve learned a thing or two about what it takes to survive and perhaps even thrive as a business owner. I still have lots left to learn and even struggle with doing some of things I have learned, even though I know better, but I’ve also acquired a few traits and developed a few habits that I believe serve me well....Continue reading

Meals and Entertainment When Does it Become An Expense Meals and entertainment can be a great deduction for many businesses. But what is considered a valid meals and entertainment expense? And to what extent can you claim this deduction? See below!... Generally, the meals and entertainment expense are food, beverage and entertainment expenses incurred by the business. To qualify, these outings must be with a customer, vendor or employee; or travelling for business. These outings should be well documented, with details of who you were with and what business was conducted. Some examples of possible allowable meals and entertainment expenses: -Meals eaten with customers, vendors and/or employees -Tickets for events (theatre, concerts, athletic etc.) -Private boxes at sports facilities -Room rentals for entertainment (hospitality suites etc.) -Cruises -Entertaining guests at clubs However, the rule is to claim 50% of these costs or 50% of what is reasonable in the circumstances. This also applies to the GST/HST associated. Taxes and gratuities are included in expenses. Disallowed meals and entertainment expenses are recreation and club dues (ie golf club memberships), season tickets for sporting events and meals claimed while outside sales territory or on vacation. There are exceptions to the 50% claim rules, the following are examples of meals and entertainment that could be claimed at the full amount and full GST/HST: -Your business sells food, beverages and entertainment to customers for compensation -You bill your client or customer for the meal and entertainment costs -The expense for an office party or event where all employees (Limit of six of these events a year) -You incur meals and entertainment expenses for a fund-raising event of a registered charity Other exceptions: -Long-haul truck drivers can claim 80% of food and beverages consumed while travelling -Self-employed foot and bicycle couriers can claim 100% of extra food and beverages consumed in an 8-hour workday cause of the nature of their work. The daily flat rate that can be claimed is $17.50. The most important part of meals and entertainment expenses, no matter the circumstances and extent of deduction, is to keep detailed and valid records of what the expenses were for because CRA may request them in an audit. Visit us a AB Business Services and we will assist you with navigating your meals and entertainment expenses and all of your accounting needs.

The Tax Deadline has been extended due to the COVID-19 Crisis. -For individuals, that means the filing date has been pushed back to June 1. The original filing date was April 30. -For trusts with a taxation year ending on Dec. 31, 2019, the due date for filing returns has been moved back to May 1. -For business owners, the CRA said they will also be allowed to defer their income tax payments until after Aug. 31 without any interest or penalties. The agency will also not contact any small- to medium-sized businesses for post-assessment GST/HST or income tax audits for the next four weeks. -What’s more, the government will allow people to defer their income tax payments until after Aug. 31, 2020 and before September 2020, with no interest or penalties.