Your Modern Accountant

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Cash flow management should be an integral part of your business’s risk assessment and action planning. #1 Reduction In The Overall Business Costs If you are a small business owner, reducing your business expenses was probably one of the first things you might have done it at the start of COVID. ... #2 Revisit Your Variable Costs When reducing the overall business cost, it is recommended that you reduce variable costs first, as it is a quicker way to immediately reduce your cash outflows. #3 Revisit Capital Investment Plans When you face a liquidity crisis, you should assess which investments you should hold and which investments you should postpone until the COVID situation improves. You should consider the cash flow factor before making any decisions about your investment plans. #4 Focus On Inventory Management You don’t need to block extra costs in holding high stock levels. If the prices of supplies go down, it is beneficial that you increase your stock level, provided your warehousing cost and liquidity situation may not deteriorate. #5 Offering Discounts To The Existing Customers When everyone is in a dire financial situation, you need to rely on the existing customers by offering them discounts and other promotional offers instead of selling your product to new customers on credit. This will reduce the risk of having poor cash flows. #6 Cash Flow Projection It is highly recommended to prepare a cash flow projection for the coming year. You can prepare a spreadsheet or use accounting software to plug in expected monthly cash inflows and outflows based on the historic data. #7 Speed Up Cash Inflows Getting money into your business faster can save you costs on your line of credit. You need to send invoices faster, have customers pay electronically, and charge slow payers’ interest. #8 Check On Your Business’s Profitability Finally, you need to check the profitability of your business. You need to make sure that your business is earning a reasonable amount of profit. Need help? Contact us: [email protected] Reference:https://cutt.ly/HkDLhes #YourModernAccountant #AccountingToronto #AccountingVancouver #taxesCanada #taxfilingCanada

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In Canada, marital status has a significant impact on personal tax filing. Married couples can maximize their tax returns by filing their taxes jointly. If you receive tax credits and benefits from the CRA that you are not entitled to, due to incorrect marital status, the CRA may ask you to repay them with penalties and interest charges thereon. If you are married, you must include your spouse in your tax return, as certain tax benefits are associated with family income. Your... tax preparation software may have the option to prepare a ‘coupled return’. All you need to do is to fill in your spouse related information and the software will automatically maximize the tax benefits for the couple as a whole while generating two separate returns. If your spouse claims credits, such as the CCB, or GST/HST, or if they owe any payments, you must report that as well. The spouse with the higher income should always maximize deductions to reduce paying taxes to the CRA at a higher rate. Your family income is combined to calculate the GST/HST tax credit and Canada Child Benefits. Eligibility for deductions and benefits will change with the change of marital status. You can also reduce your tax liability to a joint return through certain transfers. If your spouse attended college and does not require the full tuition credit to reduce his/her taxes due, you can claim part of your spousal tuition expenses on your return. If you make contributions to your spouse’s RRSP, it can be deducted from your taxable income. This is advantageous if you have a higher net income, which is taxed at a higher rate than your spouse. However, contributions you make to a spouse’s RRSP lower your own deduction limit. The total amount you can deduct for the contributions you make to your or your spouse’s RRSP cannot be more than your own deduction limit. If you are unable to contribute to your RRSP due to your age, you can still contribute to your spouse till the time your spouse turns 71. Need help? Contact us: [email protected] Reference: https://cutt.ly/GkRW971 #YourModernAccountant #AccountingToronto #AccountingVancouver #taxesCanada #taxfilingCanada

There are a number of good reasons why you should move your business to corporation status: Limited Liability One of the main advantages is that you can protect your personal assets against business losses. As a separate legal entity, a corporation is responsible for its own debts, and your personal assets are not required to pay your business debts. ... Easy Access To Capital Banks and other financial institutions rely more on incorporated businesses than on individuals for loan disbursements. It is easier for companies to raise capital from banks, as they are considered less risky due to their business continuity model. Business Credibility The benefit of incorporation is not limited to having access to business finance but it goes beyond finances. Many stakeholders often perceive businesses to be more stable than unincorporated businesses. Incorporating may help a new business establish credibility with potential customers, employees, vendors, and partners. Perpetual Succession Corporations are the most sustainable form of business, and the legal structure of the corporation is more durable than sole proprietorship and partnership businesses. A corporation can continue its business operations for an indefinite period, regardless of what happens to its directors or shareholders. A corporation does not cease its business operations because a director leaves the company. A corporation is always based on the concept of business continuity and the perpetual succession will further strengthen the continuity of business operations. Tax Advantages Corporations often get tax credits by filing annual corporate tax returns with the CRA. Tax rates are much lower on the income of a corporation than on the income of an individual. It is always better to incorporate a business in Canada. Since incorporated businesses generate employment opportunities and contribute to the national economy, the CRA has many federal and provincial tax credits for corporations. Need help? Contact us: [email protected] Reference: https://cutt.ly/qkxhcp0 #YourModernAccountant #AccountingToronto #AccountingVancouver #taxesCanada #taxfilingCanada

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Students who are enrolled full-time in eligible programs are eligible for a non-refundable tuition tax credit to reduce their income taxes payable. If a child has no tax to pay or their taxes payable are reduced to nothing without claiming the full amount of the tax credit, they may transfer up to $5,000.00 to a parent. The child may also choose to carry forward unused fees to a future year. The treatment of the Tuition Tax Credit is important to consider during the separati...on process, particularly in cases where expenses for post-secondary education are being discussed. Reference: https://cutt.ly/1g8K2Aj

While home prices are, of course, top of mind for any prospective property buyer, property taxes are not to be overlooked. And according to a new report from Zoocasa, Toronto’s are currently the lowest in the province. As it stands, the city’s property tax rate is 0.599704%, hovering below Markham’s 0.628191%. Meanwhile, the province’s highest property tax rates will currently be found in Windsor, with a rate of 1.775679%, and following that city, Thunder Bay’s rates are at... 1.562626%. It’s important to note that this does not mean that every homeowner in Windsor is paying more in property taxes than a homeowner in Toronto, explains the report. There are a number of factors at play. Essentially, property tax can be calculated by multiplying a home’s most recent value assessment by the residential rate set by the home’s local municipality. In Ontario, these calculations are based on a home’s value, the Education Tax Rate, and the Residential Tax Rate. Reference: https://cutt.ly/ng0reK1 See more

Canada Remembrance Day will keep reminding us that we are blessed to have such brave and patriotic heroes in our nation. Warm wishes on this day.

Canada’s tax authority is reportedly asking a federal court to force cryptocurrency exchange Coinsquare to hand over information and certain documents on all of its users since the beginning of 2013. The Canadian crypto exchange has over 200,000 users. The tax agency claimed in a September filing that all the requested information is needed to ensure that customers of the crypto exchange complied with Canadian tax laws. The Canadian tax agency established a dedicated crypto u...nit in 2018 to conduct crypto-related audits. The regulator told Journal de Montréal last year that cryptocurrencies were increasingly being used to facilitate offshore tax evasion in the 54 criminal investigations it was conducting at the time. Reference: https://cutt.ly/agCAABK Photo: https://cutt.ly/KgCAHHg