Nyman Solutions Professional Corporation

Some great information on the wage subsidy that the federal government is rolling out. If your revenue has decline by more than 30% from the comparable month last year, you may be eligible for a 75% subsidy of wages up to $847/week/employee. This would include the owner-manager wages. The application process is still a bit of an unknown, but more info will be coming out soon. PS...although I find these two guys extremely knowledgeable and take tax courses with them every year, tax accountants and lawyers are not entirely fun to watch. This may double as an insomnia aid for you. https://vimeo.com/403150687

Edit: A good news update! CRA has issued clarification that most dividends from CCPCs (small corporations) do count towards income for calculating eligibility for CERB. If you have dividends from your own corporation that are in Box 10 on your T5, you can count those towards the $5000 limit. For those of you who are like me and have small corporations without employees and take a split between wages and dividends or take dividends only, there is some not so great news coming out on the COVID relief. Dividends do not count as eligible income in determining what is available to you for relief. Please let me know if you have questions. https://www.advotaxlaw.ca//salaried-sally-proprietor-peter

For those with employees, here is further information of the wage subsidies available for the next couple months. https://covidcontinuity.com//understanding-wage-subsidy-p/

How much do you charge for doing taxes for a small corporation? It’s my most asked question, and I know it’s frustrating for people when the answer is it depends. But there’s a huge range of small corporations, and an even bigger range of how people keep their records. I do have a standard rate for companies that come to me with their bookkeeping basically done and bank accounts reconciled, but then there are companies who come to me like the one pictured below. There is... no shame in sending your books to an accountant this way, but there is a premium that is going to be added to your bill for the time it takes to turn this into financial information that makes sense. I’ve said before, an entrepreneur needs to spend their time on the tasks that are most valuable for them, and bookkeeping isn’t always one of those tasks. Sometimes, the cost of having someone like me straighten it up is less than what it costs you to do it yourself, and that makes it a smart choice. However, there are simple things that can be done to decrease your cost of bookkeeping, and I’m more than happy to give you some tips and best practices if you need them!

An update on measures being taken for income supplements by the government, including for small businesses and self-employed. https://pm.gc.ca//prime-minister-announces-more-support-wo

COVID-19 preparedness is an important part of limiting the spread of the disease. My office is not a high-traffic area, but if your preference is to limit exposure where possible, there are electronic options for exchanging tax documents in order to complete your return. Please do feel free to call or email me to discuss the options.

Reading about accounting and taxes is probably not high on anyone’s list of things they want to do, but if there is anything you would like me to do a post about or have questions about, drop it in the comments here and I would be happy to oblige!

Each year, CRA has pet projects that they run with. Last year was the time for reviewing vehicle expenses claimed in corporations. I had three clients selected for review for 2016 and 2017, and thanks to good record keeping practices, none of them had any changes put through on review. Keeping receipts (and a mileage log in the case of vehicle expenses) is a must. Had my clients been unable to prove their expenses with proper backup, they could have owed thousands back to CRA! I can’t stress enough how important the backup is for expenses, whether you have a corporation or are claiming them on your personal return.

Let’s talk about business use of a personal vehicle...because it’s just so much fun! Corporations and sole proprietorships have different rules when it comes to claiming expenses for mileage on a personally owned vehicle. If you are incorporated, it’s a simple matter of keeping a mileage log (date, where to, description of business purpose, number of km). The expense is calculated by using allowance rates per kilometre as set by the government. As a proprietor, the rules are... different. Don’t ask me why...I’m just here to help you comply with them! You must claim the business % of actual expenses on the vehicle. That means you have to calculate business mileage as a percent of total mileage and apply that ratio to all actual expenses. You must keep all fuel and repair receipts, insurance, registration, etc, plus the same mileage log and a starting and ending odometer reading for the year. Don’t despair though. At least for mileage logs, there’s an app for that! There are apps that will automatically track your trips after which you can classify them as business or personal. Usually, the free versions either limit the number of trips it will track or you have to manually record them. The ones that will use the gps to automatically track them have an annual subscription, but I find it’s well worth the price. Two that I have used are MileIQ and Everlance. Everlance is more expensive, but has the added advantage of also tracking expenses, and has awesome visuals of trips. I took a boat trip the year I used this app, and it showed the entire route the boat took and how close we got to actually heading out to the Pacific. As always, if you have questions please don’t hesitate to contact me!

I am not a fan of sending out Christmas cards and company swag. Cards get tossed aside, a spending money on those items means increased overhead. Let’s face it...for any business, overhead gets passed on to customers in billings and fees in one way or another. In the six years that I have been in business on my own, I have not increased my standard rates at all, despite inflationary pressures, etc. I’ve been able to do this in large part because my overhead is limited and I h...ave very little excess in my practice. However... I definitely do want my clients and associates to know how much I appreciate your business and referrals. My success is yours as much as my own. I wish every one of you the happiest of holiday seasons and a joyful, prosperous year in 2020!

Why do I need to keep receipts? My credit card statement should be good enough! Well, to be blunt and in a rare answer that is cut and dry, no. Bank and credit card statements are not good enough evidence of your expenses for CRA to accept them. If you go to Esso and fill your tank for $50, how is CRA to know you didn’t put through a receipt for $50 in lottery tickets? A trip to a golf course clubhouse for a lovely dinner with a client is 50% deductible, but green fees are... not. That Costco charge could have been to buy a canoe. Without actual receipts, you cannot prove that the purchase was what you said it was. Additionally, receipts contain other information that statements don’t, such as the GST amount and GST number of the vendor. Without those, you can’t claim back your ITCs. Can I take your word for it and do your books from your statements? Sure, it’s possible. But in an audit I will not be able to support your position without the actual receipts to back it up, and all those expenses will be disallowed. It’s a big risk that I don’t want to take with your taxes! On a related side note...thermal paper is horrible. Don’t highlight or use tape on your receipts, leave them in a hot window, or touch them with greasy hands. The print will disappear. Apps can be excellent tools for receipt management, and I’m happy to point you in the right direction if you need some help with setting up your record keeping system.

You know the Nina Simone song, "Feeling Good"? It's a new dawn It's a new day It's a new life...... Well, I'm not a new Dawn entirely, but I've made some changes recently, starting with my personal and business name. Welcome to Nyman Solutions Professional Corporation, formerly Dawn Gottenberg Professional Corporation! I hope to continue to provide my clients with high quality services, and I will strive to improve and learn more to help meet the requirements for new entrepreneurs and growing businesses in what can sometimes be a complicated maze of taxes and accounting needs.

"All I have is employment income, and my employer takes the taxes off, so why do I owe money?" This is a pretty common question, and doesn't have an overly satisfying answer. If literally all you have is employment income with one employer, the amount you owe or get back should be fairly minimal, unless you've requested additional tax taken off each cheque. Payroll deductions are calculated based on tables that the government provides. These days, this is done mostly by so...Continue reading

Screenshot of the latest scam going around, courtesy of Alan Salmon. CRA does not send etransfers for refunds. This is how scammers get your bank login info. Please never never accept an etransfer like this. Also a reminder, CRA does not phone and threaten that if you don’t pay a balance within an hour you will be arrested. They don’t take gift cards as payment for balances owing, either.

Shopping for services like mine can be a challenge. There are a variety of options, from do-it-yourself to high end concierge style, and knowing who to pick or even what you need can be daunting. Further complicating things is the fact that accountant can be used as a job descriptor by anyone who chooses to call themselves such, unlike doctor or lawyer which can only be used by qualifying persons. Taxes and basic financial statements do not require a CPA to prepare them...Continue reading

A short lesson on assets as liabilities, brought to you by spilled coffee: An asset is an item the has a useful life of longer than a year. A liability is, in an accounting nutshell, a debt or money you owe. People often use liability to mean something that’s holding them back, or is detrimental, but debt can be useful, and even beneficial. When you buy a house, an asset, and utilize a mortgage, a liability, you have used a debt to obtain a benefit. Over time, the asset v...alue will likely increase (think long-term though, like more than 10 years), while your debt decreases. The difference between what you OWN and what you OWE is your equity. However, purchasing assets comes with a lot of analysis outside of just looking at the asset itself. A home comes with additional expenses beyond the mortgage...property taxes, utilities, home maintenance, equipment for maintaining the yard, etc. If you look at more complex assets and investments, those costs can be very significant. An oil refinery, for example, would require extensive projections on costs, both financial and non-financial (such as environmental impacts), and a company looking at building one would also need to factor in their own expertise. If I were to build one, the costs would be massive since I’m not qualified or competent to run one. But a corporation like Petro-Can, well...that’s a different analysis. When the costs of owning an asset exceed any benefit from it, you tip the scales to the side where the asset ownership just isn’t worth it. And what brought about this ramble? This morning as I was opening my mail, sorting bills out from other items, scanning and saving them to my cloud, I spilled my coffee...a highly valued item that took a lot of energy to analyze the purchase of since it meant going out in -17C to get it. As I leaped to clean it before it destroyed anything important like my laptop, I thought well that nearly became a huge liability. Happy Saturday, and welcome to the start of tax season!

CPP went through a massive shift in the 90s, when it became apparent that it was not as secure as a pension fund needed to be. Since then, changes have been made to ensure that pension contributions are invested appropriately, and it is not underfunded. You contribute to CPP through deductions on your employment earnings which are matched by the employer, or self-employment earnings which require you to pay both the employee and employer shares. Initially, the idea of a pub...lic pension was set up as part of a three legged stool approach to retirement, the other two legs being personal savings and employer pensions. These days, with fewer people saving up and fewer companies offering pension plans, many people are relying solely on CPP to fund their retirement, and at a maximum of about $12k per year, it’s just not sufficient. The government is in the process of increasing CPP contribution rates to try to close the gap generated by changes in our economic trends. There are income supplements, such as OAS and the Alberta Seniors Benefit for low income seniors. These are social programs that are often getting confused as pensions with people who don’t qualify for them feeling as though they are losing money that was deducted from them for CPP. Social programs are funded by the government via tax revenues, not deductions for employment earnings. Like any social program, there are criteria that need to be met in order to qualify for payment. If your income is under $75,910, you are fully eligible for OAS, but it gets clawed back between $75,910 and $122,843 at which point you are ineligible for OAS. The Alberta Seniors benefit is dependent on where the senior lives, if they are single or married, and what their income is from other sources. A single senior who owns a home will not qualify for any of their income exceeds about $21,000. Canadian taxes and pensions can be confusing and frustrating, compounded by the stress of retirement finances in general. I am not a financial planner, but I can certainly assist in navigating the twists of understanding different options and incomes, and the tax implications of them, as well as work with your financial planner as part of your retirement planning team.

If you have had fertility treatments in the last ten years but did not claim them as a medical expense because you weren’t specifically infertile, you have the chance to retroactively claim them. https://www.cbc.ca//budget-fertility-tax-deduction-1.40370