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Why small business owners should have a business bank account

Are you still using your personal checking account to manage your business finances? Regardless of whether you own a home-based business or are building a multi-million dollar enterprise, there are several benefits to differentiating between your personal and business finances. In this article, we will discuss the following: The numerous reasons you should have a business bank account and how to open up a business bank account.

The reasons you should have a business account

Having a business account will ensure that you keep your business funds separate from your personal funds.

Here are some of the worthwhile reasons:

1. Having a business bank account gives your new business credibility and professionalism. This is particularly important if you have customers that pay with cheques. It definitely looks more professional when you ask your clients to write a cheque to  “XYZ Enterprise” as opposed to  “Bob Smith.” It also looks more business-like and credible when you use separate business cheques and a separate business credit card to pay suppliers and other companies for their services.

2. Having a business bank account is advantageous for tax purposes. Maintaining a separate business bank account will help you keep track of all your business-related transactions and will make it easier to pay your taxes when tax season rolls around. It will also provide you with a clear trail of your business revenue and expenses in case the CRA decides to audit you.

3. Although having a separate business bank account is advisable for businesses that are sole proprietorships or partnerships, it is especially recommended for corporations (more about these business structures later in this article).  A corporation refers to a business that is a separate and distinct entity from its owners and as such the personal assets of the owners are sheltered from potential liability.  However,  sometimes courts will hold the corporation’s owners, members, and shareholders personally liable for business debts. When this occurs, it’s called “piercing the corporate veil.” For instance, if the corporation has been utilized as an instrument of fraud and improper conduct, or was incorporated for no valid business purposes, then the court may deem the shareholders personally liable. One of the criteria which may be used to decide whether the court should “pierce the corporate veil” is the degree of separation between the financial activities of the business and those of the owners of the business. As such, it is vital that an incorporated company have a separate business bank account.

4. The most obvious reason to have a business bank account is that you will be able to keep track of your cash flow and to see if your business is profiting.  A business checking account ensures that all your business transactions are separate from your personal financial transactions. This helps you monitor your business’s profitability.  If you were to combine your personal financial transactions with your business financial transactions into one account, you might have a difficulty determining your profit margin because to determine your profitability, you must remember which expenses were personal and omit them.

How to open up a business bank account

There are three main steps to opening a business bank account: 1. choose a business structure, 2. decide on who will be the primary business representatives and 3. provide the bank with several critical documents.

1. Choose a business structure

Prior to setting up a business account, it is imperative to decide which type of business structure you will be running. Is it a sole proprietorship? partnership? or corporation?

In a nutshell, here are the differences between the three business structures:

  1. A sole-proprietorship refers to a business in which you are the sole owner and fully responsible for all debts and responsibilities related to your business. One of the advantages of this business structure is that all profits go directly to you. However, one of the disadvantages is that you are subject to unlimited liability which means that a creditor can make claims against your personal assets to pay off your business debts.
  2. A partnership refers to a business in which you and another individual or multiple individuals have a legal relationship to operate a business as co-owners. In a partnership, you and your business partner(s) combine your financial resources into the business. You and your partner(s) share the management, profits, and assets of the business as outlined by the legal agreement you have formulated. One of the benefits of this business structure is that there is a tax advantage. For instance, if income from the partnership is low or loses money, you and your partner(s) include your shares of the partnership in your individual tax returns. One of the disadvantages is that there is no legal difference between you and your business so similar to owning a sole-proprietorship,  you have unlimited liability.
  3. A corporation refers to a business entity that is separate from its owners. The majority of corporations have shareholders, and the shares are held only by a few individuals, or they may be available for sale to the public (publicly held). One advantage of this business structure is that as a shareholder of a corporation, you will not be personally liable for the debts, obligations or acts of the corporation.  One of the disadvantages of owning a corporation is that it is more expensive and time-consuming to set up than other business forms. We advise that you seek legal advice if you plan on incorporating.

If you’d like to read some of the advantages and disadvantages of having a sole-praetorship, partnership, and corporation, check out this article from Canada Business Network.

2.  Decide who will be your primary business representatives

Next, after you decide on a business structure, determine who will be the primary representative for your business. In other words, who will have the authority to sign on contracts, cheques as well as perform certain functions such as withdrawals, transfers, and payments on behalf of the company?

3.   Provide the bank with several critical documents

Typically, banks require that all owners and signing officers provide two pieces of approved personal identification.

Also, depending on your business’ legal structure, you will be required to provide additional documents to the business bank specialist. For instance, for each of the following business structures, you will need to provide the following documents:

Sole Proprietorship

– Certificate of Registration of Business Name

Partnership

– Certificate of Registration of Partnership. Partnership Agreement (if available)

Corporation

– Articles of Incorporation. Certificate of Registration of Business Name (if available).

-Most current filing with your incorporating jurisdiction listing your directors

-Trade Name Registration (if applicable)

An important note:  Please contact the bank that will be managing your business bank account to determine if you require additional documentation and what their exact procedures are for opening a business account.


If you require additional consultation or want to learn more about our professional accounting services, please do not hesitate to contact S & P Accounting Services.

Polina Presman, CPA, CA

T- 416-371-6017
F- 416-667-0404

Shani Marzin, CPA, CA

T- 416-731-9031
F- 416-667-0404

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer: We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

Five steps to creating a successful monthly budget

What is a monthly budget?

A monthly budget is a tool that helps you manage your money. It allows you determine how much money you are earning, spending and saving. Devising a budget can help you balance your income with your regular expenses and guide your spending habits to help you attain your monetary objectives.

Creating a budget can initially be overwhelming and a difficult feat, yet as you read through the following five steps, you’ll see that it’s feasible and definitely worth the effort.

What are the steps to creating a monthly budget?

Overall, the steps for creating a monthly budget are as follows: 1. Track your spending to determine where your money is going, 2. Divide your expenses into various categories, 3. Record your daily expenses, 4. Assess where you can cut your expenses and 5. Define your financial goals, make a plan and stick to it.

1. Track your spending to determine where your money is going. For a month or two jot down every single cent you spend, yes even that $3.75 caffe latte you sip at your daughter’s ballet practice and the chow mein meal you devour after dancing the night away with your girlfriends.  

At the end of the month add the total expenditures and subtract this total from your net earnings to see whether or not you’ve spent more than you’ve earned. This calculator will show you how seemingly inconsequential purchases can add up over time.  For instance, if you spend $2.50 on a daily coffee, it will cost you more than $900 per year.   On the flip side, if you make small changes to your spending habits, such as reduce the amount of coffee you buy, this minor change can have a positive effect on your budget and your ability to save.

2. Examine what you spend money on during the 1 to 2 month period and divide your expenses into various categories. You could divide your expenses into broad categories such as housing, car, food, and then set up sub-categories within them. For instance, under the category housing, you could further divide it into mortgage payments, rent, utilities, and repairs.

3. Consistently keep a tab of your daily expenses. Write down all your purchases on a Post-it Note and keep it conveniently in your wallet. Then when you get home, transfer your purchases to an excel spreadsheet or a budget app. Here is an excellent budget calculator worth checking out.

4. Assess where you can cut your expenses. This is where the real fun begins. It’s now time to examine each category (see step 2) and determine where you can trim your expenses. You may be surprised by the seemingly minor purchases that are eating away at your credit card, such as the extra $50 you rack up at the grocery store simply because you are purchasing food when you are hungry or not adhering to a grocery list.  Carefully review your spending habits and devise a list of items to par.

The accompanying activity might help you figure out which spending to cut from your budget. Divide your expenses into two classes: “needs” (e.g., groceries and utilities) and “wants” (e.g., tickets to a show). Assess your needs and wants. A need is something that is important, required or fundamental. For instance, a roof over your head, heat for your home, nourishment, clothing or medicine. On the contrary, a want is something that you’d like, however, don’t really require. Dinners at restaurants, coffee from Second Cup, tickets to a concert, a gym membership or designer clothes and shoes are examples of wants. Needs and wants aren’t the same for everybody. One individual’s want might be someone else’s need. Let me explain. If for instance, you live in a metropolitan area near a bus route, a car may be more of a want rather than a need. On the other hand, if you live in the suburbs, and don’t easily have access to public transportation or can’t walk or cycle to work, a car may be a need.

Some suggestions on how to cut your expenses include: borrowing books from your local library instead of buying them on Amazon; borrowing movies from the library instead of going to the movie theatre; running or walking outside instead of purchasing a gym membership;  getting rid of one car and relying on public transportation; using the washer and dryer during off-peak hours; and shopping at discount food stores or using the app Flipp, which could help you price match and save on weekly food essentials. These changes no matter how small may save you hundreds or even thousands of dollars each year.

5. Define your financial goals, make a plan and stick to it. Creating a budget won’t magically transform your spending behaviour.  You will need to consistently monitor your spending and define your goals and priorities and stick to them. Monitoring your spending could be done by consistently writing down your weekly budget and reviewing it to see if you are spending less than you earn.  Whereas defining your goals involves sitting down and reflecting on where you want to be financially in a year, three years or five years from now. One important goal you should consider is to increase the amount of money you deposit into your savings account each year.  Yet, this goal should be a priority only after you have paid off your debts because it won’t make sense to put money away while you are paying interest on your debts. Other goals that are worth attaining include setting up an emergency fund, paying off your mortgage in x amount of years or saving money for your children’s post-secondary school education. 

What are some tips that could help you to adhere to your budget?

  1. Minimize your spending behaviour as much as possible to what is in your budget. try to stick to buying products and services that are needs rather than wants.
  2. Record your receipts and bills in your budget app or excel spreadsheet.
  3. List your income and expenses and compare the two at the end of the month to see if you are spending more than you earn.
  4. Evaluate your monthly budget to see if you are your spending greatly differs from your budget. If this is the case, you may need to reevaluate the figures to make it more sensible and realistic.
  5. When contrasting your budget with your actual spending, ask yourself the following:
    1. Are there huge or little differences between your actual spending and budget?
    2. Which categories have the biggest differences?
    3. Are differences due to an atypical circumstance (e.g., repairing the washer) or is this prone to happen every month?
    4. Are you able to save enough money to achieve your financial objectives or pay off your debts?
    5. Continue to reflect on your spending behaviour and to ask yourself these above questions every month.
    6. You are going in the right direction if your spending differs a bit from your budget.

Are you looking for more info on how to make smarter financial choices?

A great resource to check out is MyMoneyCoach.ca.

MyMoneyCoach.ca is a free public service provided by the Credit Counselling Society (CCS). The Credit Counselling Society is a non-profit, government registered, charitable organization dedicated to helping individuals and families find solutions to their debt and money problems. CCS provides consumers with confidential and free counselling services, credit education, and debt management programs.

Source: https://www.canada.ca/en/financial-consumer-agency/services/make-budget.html


About S & P Accounting Services

S & P Accounting Services is a professional accounting firm situated in North York, Ontario. We are chartered accountants with extensive experience with audit, review, tax and bookkeeping. We strive to operate in accordance with our principles of quality, professionalism, and integrity and are dedicated to excellent service.  We aim to ensure that our clients receive the highest quality of financial, tax and accounting services and advice. We happily serve clients in Toronto, North York, Mississauga, Vaughan, Richmond Hill and in other cities in the GTA.

If you have any questions or inquiries about our accounting services, please contact S & P Accounting Services.

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer: We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

How to budget wisely – top five tips from an accounting firm

S & P Accounting Services is an accounting firm situated in the Greater Toronto Area. A common question that our clients ask us is how could I budget wisely?

Overall, the top five tips that we recommend to our clients are:

1. Spend less than you earn. 

This is easier said than done, yet if you follow through with this, you could be well on your way to paying off debts, saving for your retirement, getting your hands on that next generation Macbook or buying that beautiful home you dreamed of.

2. Create a monthly budget and adhere to it.

In order to know how much money is coming in and out each month, it is essential to devise a budget. There are different smartphone apps that make it easy to track your expenditure such as, Mint.com, YNAB, or Freshbooks. Conversely, you could simply create a monthly budget on excel spreadsheet for free.

Creating a monthly budget could definitely be an eye opener for you.  It will allow you to see how much money you are spending on those sushi outings with friends or daily Starbucks fixes and may propel you to want to change your spending habits.

3. Pay with cash instead of credit cards.

A good way to reduce your spending is to pay your daily expenses with real cash instead of credit cards. Cash offers a real tangible experience. When you run out of cash in your wallet, you no longer have any more money to spend. “You see this and process it.” On the contrary, with credit cards, “it seems like it would be easier for someone to purchase more because a card, while tangible, does not represent actual money. It’s just a piece of plastic, and a shopper does not see the result of their expenditure for almost a month.”1


One well-documented study conducted by Dun & Bradstreet found that people spend 12-18% more when purchasing with credit cards instead of cash. McDonald’s reports that when customers purchase with credit cards, the average ticket is $7 as opposed to $4.50 with cash. Therefore, we advise that it is best to keep cash rather than credit cards in your wallet.2

4. Stick to your grocery list and brown bag your lunch.

Having a grocery list will save you money and time. Have you ever rushed to the grocery store two days in a row simply because you forgot that one important staple on your first trip to the grocery store?  Or have you ever gone to the grocery store wandering aimlessly through the aisles, with little knowledge of what you have in your pantry and fridge and ended up buying multiples of the same product?

Having a grocery list will remind you what you need to buy and will ensure that you are purchasing food you know you will eat. Unfortunately, people throw away too much money on food because they purchase it and never eat it, or it gets moldy or rotten. Purchasing food that you intend to consume because it’s on your grocery list will help minimize wasted food.

A good way to create a grocery list is to first create your meal plan for the week.  After completing your meal plan, write down the necessary ingredients on your grocery list. Make sure to take note of what you already have in your fridge and pantry in order to avoid buying duplicate items.

One meal planning app worth checking is Today’s Parent Mealtime. It could help you create a weekly meal plan from thousands of family-friendly recipes and then create a grocery list that you could email to family members so that you are all on board with what’s needed.

We also recommend that you brown bag your lunch. This will save you hundreds or even thousands of dollars per year and as an added bonus it is usually healthier to eat a homemade meal.

5. Don’t buy on impulse.

Consumer psychologist, Ian Zimmerman, Ph.D., points out that “impulse buying is related to anxiety and unhappiness…The impulse buyer may feel unhappy and may think that being seen with an expensive new purchase will bring respect and happiness. This perceived road to happiness motivates the impulse buyer to go shopping…likes [a] product, and experiences pleasure at the thought of being able to purchase it immediately and go home with it.”3

Therefore, when you are down in the ruts, don’t use shopping as a therapy to give you a quick pick me upper. Instead try to find different avenues to deal with frustrations, boredom, and fatigue such as meditation, exercising, writing, drawing which are all practically free. One technique that could help you avoid impulse shopping is doing deep breathing exercises. You are window shopping with no intention of buying anything and you see those new Nike shoes and want them like now…”Take a breath and try this instead: Tell yourself you can buy it, but not until next month. By then, you’ll either have enough saved up or you’ll decide you don’t like it that much after all. Even better, if you wait it may be on sale! Problem solved.”4

In the same vein, when you go grocery shopping, stick to the items on your grocery list and never shop hungry.

Related: What motivates impulse buying

In conclusion, in order to budget wisely and help achieve your financial goals, it is well worth it to follow these five tips: 1. spend less than you earn, 2. create a monthly budget and adhere to it, 3. pay with cash instead of credit cards, 4. stick to your grocery list and brown bag your lunch, and 5. don’t buy on impulse.

Sources:

https://www.nerdwallet.com/blog/credit-cards/credit-cards-make-you-spend-more/

http://www.businessinsider.com/studies-help-explain-why-credit-cards-make-us-spend-more-2014-7

https://www.psychologytoday.com/blog/sold/201207/what-motivates-impulse-buying

https://www.everydollar.com/blog/8-steps-to-help-you-stick-to-your-budget

 


About S & P Accounting Services

S & P Accounting Services is a professional accounting firm situated in North York, Ontario. We are chartered accountants with extensive experience with audit, review, tax and bookkeeping. We strive to operate in accordance with our principles of quality, professionalism, and integrity and are dedicated to excellent service.  We aim to ensure that our clients receive the highest quality of financial, tax and accounting services and advice. We happily serve clients in Toronto, North York, Mississauga, Vaughan, Richmond Hill and in other cities in the GTA.

If you have any questions or inquiries about our accounting services, please contact S & P Accounting Services.

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer: We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

Here are some FAQs about income tax returns

Here are answers to some commonly asked questions about income tax returns

1. What income do I need to report on my income tax return?

All income is taxable. You’ll need to report all income on your tax return (also known as Income Tax and Benefit Return) and calculate how much tax you owe.

Income that you must report to the CRA (Canada Revenue Agency) includes:

  • Part-time and self-generated income
  • Employment income earned both inside and outside of Canada
  • Income from rental property or renting out a section of your house
  • Investments (e.g. interest, dividends, capital gains)
  • Being self-employed (e.g. a home business)
  • Your pension
  • Income from more than one job

2. Do I qualify for tax credits and benefits?

You may qualify for the following:

  • Ontario Children’s Activity Tax Credit
  • Ontario Political Contribution Tax Credit
  • Healthy Homes Renovation Tax Credit
  • Ontario Trillium Benefit
  • Ontario Senior Homeowners’ Property Tax Grant
  • medical expenses, caregiver amounts, disability amounts, etc.

All you need to do is file a tax return and fill in three forms ON 479, ON-BEN and ON 428.

If you are submitting a paper tax return form, complete and mail the forms below when you mail your tax return.

Yet, if you are submitting your tax return online, the majority of accounting and tax return software will automatically ask you questions related to tax credits and benefits.

3. What if I have no income from last year, do I still file a tax return?

It’s important to file your taxes even if you have no earnings.

Even if you don’t have an income from the previous year, it’s beneficial to file your taxes because you may be eligible for various government benefits such as, the Ontario Trillium Benefit, the Ontario Child Benefit and Healthy Smiles Ontario.

However, please note two cases which it is mandatory to file an income tax return even though you have no earnings from the previous year: 1. if you owe taxes to the government and 2. if the CRA sent you a request in the mail to file your taxes.

4. Will I receive a refund?

The CRA will process your tax return and mail you a notice of assessment. If you qualify for a refund, you’ll get money back.

How much money you receive is contingent on a number of factors: your location, age, the size of your family, how much money you make and your expenses. Not everyone qualifies for a refund.

If you owe the CRA money, you will receive a letter in the mail stating that you need to pay by April 30. You can pay online, at your bank, or by mail with a cheque or money order.

5. From where do I get a tax return form?

To get a tax return form, you can either:

  • Download one from the CRA website
  • Visit your local post office or postal outlet
  • Visit a Service Canada office
  • Call 1-800-959-8281

The tax return forms are available at the above locations between February and early May.

6. Can I get help completing my tax return?

You may be eligible to get help from a free tax preparation clinic if you have a modest income and a simple tax situation. These tax clinics are offered through the Community Volunteer Income Tax.

Remember to bring your tax information slips and receipts such as old age security (OAS), employment insurance (EI) and Canada pension plan (CPP) tax slips. Volunteers will need them to prepare your income tax.

If you do not qualify for free tax services, you can get help from an accountant or a tax preparation company.

Our professional chartered accountants are committed to assisting you with your tax return and are highly qualified at finding the best tax credits and deductions that will maximize your refund from the government. Here is some more information about our professional accounting services. If you have any questions about tax returns or any accounting related inquiries, please contact S & P Accounting Services.

Here is an infographic which provides answers to some commonly asked questions about income tax returns. 

Income tax return FAQs

Income tax return infographic

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer: We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

Can I get a tax deduction for eating gluten-free food?

If you suffer from celiac disease, you may be eligible to get a tax deduction for eating gluten-free food. Here is advice from a Toronto Chartered Accountant.

According to the Canadian Celiac Association, it is estimated that 1 in 133 persons in Canada are affected by celiac disease (gluten intolerance). Currently, there is no known cure for this disease, yet it can usually be effectively treated and controlled with “strict adherence to a gluten-free diet for life”. This requires knowledgeable dietetic counseling and frequent ‘updates’ as commercial food contents change.

Gluten-free products could be quite expensive and the Canada Revenue Agency (CRA) is aware of this. If you suffer from celiac disease, you may be eligible to claim the incremental costs related to purchasing gluten-free food as a medical expense.

What is the incremental cost? And how is it calculated?
The incremental cost is defined as the difference in the cost between gluten-free products compared to the cost of similar products containing gluten. It is simply calculated by subtracting the cost of a product with gluten from the cost of a gluten-free product.

For instance, if a gluten-free loaf of bread costs $5.50 and a loaf of whole wheat bread costs $3, you could write off $2.50 as a medical expense on your income tax return.

What if several people are sharing gluten-free products with me, yet I am the only one who has celiac disease?
According to the CRA, “if several people eat the product, only the costs related to the part of the product that is eaten by the person with celiac disease may be claimed as a medical expense.” For example, if you split your loaf of gluten-free bread with a friend or your spouse, you may only claim half of the expense or $1.

What documents do I require to support the claim?
The CRA states, “Do not send any supporting documents. Keep them in case we ask to see them later.”

You will need to keep all of the following:

  1. A letter from a medical practitioner that certifies that you have celiac disease and cannot eat gluten.
  2. Receipts for each gluten-free food product to backup all your claims.
  3. A summary of each food product that was bought during the 12-month period for which the expenses are being claimed.

What is an example of ‘a summary of each food product’?

Food product: Bread
Number of products bought (for the 12-month period): 52
Average cost of product with gluten: $3.49
Average cost of gluten-free product: $6.99
Incremental cost: $6.99 – $3.49 = 3. 50
Amount to claim: $3.50 x 52 = $182.00

This table is based on a sample provided by the CRA website.

Here is a celiac disease medical expense worksheet. It is intended to help you document your gluten-free purchases. It is beneficial to print several of these sheets off and keep a file with this worksheet and your receipts together. This worksheet was taken from the Canadian Celiac Association.
In summary:

  1. The incremental cost of gluten-free products is an eligible medical expense.
  2. Eligible products are generally marketed specifically to the gluten free diet.
  3. Other products can also be eligible if they are used by the person with celiac. disease to make gluten-free products for their own use. These include, but is not limited to, rice flour and gluten-free spices.
  4. The gluten free tax deduction is only eligible with a medical note with a diagnosis of celiac disease.
  5. A summary of each purchase of gluten free products must be kept on file.
  6. A receipt for each purchase must be kept on file as well.

Related: Eligible medical expenses you can claim on your tax return


About S & P Accounting Services

S & P Accounting Services is a professional accounting firm situated in North York, Ontario. We are chartered accountants with extensive experience with audit, review, tax and bookkeeping. We strive to operate in accordance with our principles of quality, professionalism, and integrity and are dedicated to excellent service.  We aim to ensure that our clients receive the highest quality of financial, tax and accounting services and advice. We happily serve clients in Toronto, North York, Mississauga, Vaughan, Richmond Hill and in other cities in the GTA.

If you have any questions or inquiries about our accounting services, please contact S & P Accounting Services.

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer: We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

 

Unsure if you should hire an accountant early on in your business?

Hiring an accountant early on could be advantageous for a number of reasons.

In this article, I discuss why this is the case, as well as eight tips that could help you start your business off on the right foot.

  1. When you decide to start your own business, an accountant could provide you with sound financial and strategic advice. An accountant can suggest how you can apply for a loan, as well as how you can get tax refunds and credits, business grants and financing. For more information about credits, benefits, and incentives, check this useful resource page from Canada.ca, as well as this page by the Ministry of Finance.
  2. When starting a business you have to decide which type of business structure is most suitable for your business needs. The four different business structures are: sole proprietorship, partnership, corporation and co-operative. The structure that is most appropriate for your business is dependent upon a number of factors which include: the type and size of the business, the risks involved, the number of people employed, the geography covered, as well at the tax situation of the business owner. An accountant could help explain which business structure is most appropriate for your needs. For information about the advantages and disadvantages of each business structure, read this article by Canada Business Network.
  3. Also, prior to starting your business, you need to register your business with several different levels of government. One question you might ask is, do you register your business on a provincial or federal level? This is a good question to ask a chartered accountant. This useful page by Canada Business Network provides an overview of the key registration requirements that may apply to your business.
  4. There are specific rules and regulations that every business must follow and there are different regulations and standards for every industry. For instance, daycares have different regulations, permits and licensing requirements than importing companies and these regulations can change over time. Therefore, it’s important to stay up-to-date with the latest regulations.  A professional accountant could direct you to the most relevant and current resources that will help you determine which regulations and standards apply to your industry. For more information about regulations, licensing and permits, read this article by Canada Business Network.
  5. When starting a business, are you required to register with a GST/HST account? When do you file for your GST and when do you pay? A chartered accountant will also advise you on these matters, as well as the advantages of registering with a GST/HST account. For more information about how to register for a GST/HST account, check Canada.ca.
  6. When starting a business, it is highly recommended that you open a business bank account that is separate from your personal account. A good accountant will explain the requirements of opening a business bank account and why it is critical to keep the business account separate from your personal one. For instance, having a business account not intertwined with your personal account could help you keep track of how profitable your business is and help you make financially sound decisions based on your business income and expenses. Muddling up your personal and business expenses could also make it more difficult to file your taxes.
  7. Bookkeeping and accounting are a significant part of any running business. At the start up phase of the business, you need to know which documents you should collect and how to establish a good filing system for all your receipts and invoices.  Whether or not you decide to conduct the bookkeeping yourself or prefer to hire a bookkeeper, it may be advantageous to ask a professional accountant about how to bookkeep. This article by Canada Business Network outlines the benefits of keeping organized records and the types of records to keep.
  8. Lastly, there are numerous accounting software systems such as QuickBooks, Peachtree and Xero, which could assist new business owners to keep track and monitor the key metrics of their business such as sales and expenses. An experienced accountant could suggest which accounting software is most recommended and user-friendly. This article by Business News Daily discusses the best accounting software for 2017.

In summary, there are many different factors and steps involved in starting up a business. Hiring a good accountant or at least seeking advice from an accountant is critical even in the beginning phases of a business. 

We are a full-service accounting firm handling taxation, bookkeeping, payroll, and accounting. We happily serve clients in North York, Toronto, Vaughan, Mississauga, Richmond Hill and other cities situated in the GTA. If you require consultation or a have any accounting inquiries, please do not hesitate to contact us.

Polina Presman, CPA, CA

T- 416-371-6017
F- 416-667-0404

Shani Marzin, CPA, CA

T- 416-731-9031
F- 416-667-0404

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

 

Disclaimer:

We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

Are you looking for a tax accountant in Toronto to help you with your tax return?

You may be eligible for free tax services

If you are looking for a tax accountant in the Toronto or North York area, yet have a simple tax situation and modest income, you may be eligible for free tax services.

In fact, there are many community organizations throughout Canada that have volunteers completing tax returns for eligible individuals. These tax clinics are made feasible through the Community Volunteer Income Tax Program (CVITP).

You might qualify for theses services if you have a modest income and a simple tax situation.

1. What is a modest income?

Modest income means that your family income is less than the amount shown in the chart below. Verify with the community organization in your vicinity to see if you are eligible as some organizations have different eligibility requirements. 

Family size Total family income
One person $30,000
One person with one dependant $35,000 (add $2,500 for each additional dependant)
Couple $40,000 (add $2,500 for each dependant)

2. Do you have a simple tax situation?

In general, your tax situation is simple if you have no income or if your income comes from these sources:

  • employment
  • pension
  • benefits such as CPP, disability, CCB, EI, social assistance
  • RRSP
  • support payments
  • scholarships, fellowships, bursaries or grants
  • interest (under $1,000)

Your tax situation is not simple if you:

  • are self-employed or have employment expenses
  • have business or rental income and expenses
  • have capital gains or losses
  • file for bankruptcy
  • are completing a tax return for a deceased person

In such circumstances, you may wish to seek advice and assistance from a tax accountant.

3. When are these free tax services offered?

Volunteer tax preparation clinics are generally offered each year between February and April but many are operating all year at various locations across Canada.

4. Where are the tax preparation clinics located?

Here is a list of free tax preparation clinics in:

5. What to bring to the tax preparation clinic?

 In order for volunteers to complete your income tax and benefit return for you, make sure to bring your:

  • Tax information slips
  • Receipts
  • Social Insurance Number
  • Identification

Volunteers need the above items to prepare your income tax and benefit return.

7. How do you get your slips?

You can visit Service Canada‘s secure site to get access to your current year and prior year old age security (OAS), employment insurance (EI) and Canada pension plan (CPP) tax slips electronically. 

For more information, see Information slips – T4 and other slips.

8. What if I require assistance with my taxes and don’t qualify for assistance from one of the free tax clinics?

If you require assistance with your taxes and are not eligible for assistance from one of the free tax clinics, you may contact S & P Accounting Services. We are a full-service accounting firm handling taxation, bookkeeping, payroll and accounting. We happily serve clients in North York, Toronto, Vaughan, Mississauga, Richmond Hill and other cities situated in the GTA. If you require consultation or a have any accounting inquiries, please do not hesitate to contact us.

Polina Presman, CPA, CA

T- 416-371-6017
F- 416-667-0404

Shani Marzin, CPA, CA

T- 416-731-9031
F- 416-667-0404

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Disclaimer:

We strive to ensure all information on our site is accurate and up to date. However, the contents of the site are naturally subject to change from time to time. That means, we can’t always guarantee the accuracy of all information on the site. YOU ARE RESPONSIBLE FOR CHECKING THE ACCURACY OF RELEVANT FACTS AND OPINIONS GIVEN ON THE SITE BEFORE ENTERING INTO ANY COMMITMENT BASED UPON THEM.

This post was written by Biz Source, a content creation company and is for illustration purposes only. For professional advice, please contact S & P Accounting Services.

 

 

Eight CRA fraud prevention tips from an accountant in Toronto

Advice from a Toronto accountant about how to protect yourself against CRA fraud

Over the past few months there has been a rise in Canadian residents falling victim of Canada Revenue Agency (CRA) scams.  A man in Peterborough was defrauded out of $2,400. Residents in south-central Ontario and Chilliwack, British Columbia have also fallen prey to this scam.

Although, in a previous post, I’ve provided advice about how to protect yourself against tax evasion scams, I think its worth mentioning the importance of protecting yourself against such frauds, especially given the rise of these unfortunate defrauding cases.

In this article, I share with you eight CRA fraud prevention tips that will hopefully help you avoid falling victim of a CRA scam.

Typically, victims of the scams receive a phone call from someone pretending to be a representative of Canada Revenue Agency. The fake CRA representative tells the victims that they owe x amount of dollars or their assets will be seized. Alternatively, theses scams could be communicated by email, text message or on the answering machine.

Here are eight crucial fraud prevention tips from an accountant in the Toronto area

If you receive a call from someone saying that they are from the CRA use these guidelines to help verify if the call is legitimate:

  1. The scammers can be extremely assertive and aggressive. Remember the the CRA will never use coercive language or  be aggressive or try to intimidate you.
  2. The scammers may threaten to arrest you or send you to the police. Remember the CRA will never threaten you to arrest you or take you to the police.
  3. If someone calls you saying that they are from the CRA and asking for personal information and/or asks you to give them money. Do not take immediate action. Hang up and verify the information by calling the CRA through the official phone number.
  4. The CRA will never ask you for credit card information or for prepayments by prepaid credit cards or your personal information by email or text message. So if you receive mail, an email or a text message requesting personal information, know that these are fraudulent and never respond to them. Hang up.
  5. Before you take any action or share any personal or financial information, hang up and call a trusted family member, friend, your bank or your chartered accountant to get a second opinion on the call.
  6. Ask yourself:
    1. Is it really safe to transfer money to someone I do not know?
    2. Is there a legitimate reason that the CRA may be calling? Do I have a tax balance outstanding?
    3. Is the requester asking for information I would not include with my tax return? Is the requester asking for information I know the CRA already has on file for me?
    4. Am I confident I know who is asking for the information?
  7. Ask the caller for their ID and verify the callers ID by calling the CRA directly.
  8. Check that status of your account by either logging in to MyAccount or calling CRA directly.

Is the message that you receive from CRA legitimate? when in doubt, ask your Chartered Accountant

If you are unsure if the phone call, email or text message is legitimate or a fraudulent message, ask your Chartered Accountant. Your Chartered Accountant should know how the CRA communicates with taxpayers and your Chartered Accountant should be able to distinguish between fraudulent communication and legitimate communication from the CRA.

If you feel that you’ve been a victim of fraud or have received deceptive telemarketing, you should call 1-888-495-8501 or visit CRA fraud website. Follow these steps if you’ve been defrauded.

If you require consultation or a have any accounting inquires, please do not hesitate to contact us.  S&P Accounting Services has experienced Chartered Accountants and we serve clients in in Toronto and other cities in the GTA which include, North York, Thornhill, Richmond Hill and Vaughan.

Polina Presman, CPA, CA

T- 416-371-6017
F- 416-667-0404

Shani Marzin, CPA, CA

T- 416-731-9031
F- 416-667-0404

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

Professional accounting services in North York and Toronto

What kind of professional accounting services do we provide?

We provide a full range of professional accounting services which include, accounting, tax returns, bookkeeping, and payroll.  We serve individuals and business clients in the Greater Toronto Area, which includes Toronto, Vaughan, North York, Richmond Hill, Mississauga, and Thornhill.

Why choose our professional accounting services?

Our professional accounting services offer many benefits to our clients:

  • You will have the opportunity to work with chartered accountants who are experts in their field.
  • You will be able to leverage on our extensive experience with audit, review, tax and bookkeeping.
  • We will help you understand how to be more successful. For instance, we will help you understand how your finances work to your benefit and how to grow your wealth in the smartest way possible. Financial literacy is key to becoming a successful business owner.
  • We will simplify your accounting and business needs. For instance, one major advantage of our payroll services is our ability to create a variety of reports that simplify accounting procedures and help your company ensure they are in compliance with legal and tax filing requirements.
  • Our professional accounting services help ensure that your accounting is accurate, complete and filed on time – this way you could focus on what’s important, helping your business succeed.

How are we committed to proving excellent professional accounting services?

  • We will give you the most current information, so you can make informed decisions for your business
  • We will maintain your books up to date to ensure you have a real-time picture of how your business is doing.
  • We will ensure that you file your taxes on time in order to avoid any late penalty fees.
  • We will respond to any of your questions and/or requests within 24 hours.
  • We will always work to improve, enhance and make your core business more efficient by providing you with innovative, sustainable and creative business solutions that are tax efficient and catered to your specific needs.
  • Our unique approach enables us to find specific tax breaks and deductions for most of our clients.

If you require additional consultation or want to learn more about our professional accounting services, please do not hesitate to contact us.

Polina Presman, CPA, CA

T- 416-371-6017
F- 416-667-0404

Shani Marzin, CPA, CA

T- 416-731-9031
F- 416-667-0404

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

A Chartered Accountant shares important news about tax evasion scams

Important news from a Chartered Accountant: “Canadians be wary of tax evasion scams”

The O.P.P. and Canada Revenue Agency (CRA) are warning Canadians of fraudulent tax evasion emails and phone calls. Some residents of Tiny Township, Tay Township, and Penetanguishene have been victims of these emails and phone scams purporting to be from the CRA.

A young 18-year-old Chilliwack woman, Sasha Tuttle,  has also fallen prey to the CRA scam and lost $2,000 of her savings. Another Chilliwack resident, 86 year old, Norman Schott received the same phone call as Tuttle. The person on the other end of the phone claimed to be the CRA and told the senior that he has a warrant out for his arrest for tax evasion. Schott knew “something fishy going on” and immediately reported the incident to the police.

Ways to protect yourself against tax evasion scams

As a Chartered Accountant, these are some important precautions I share with my clients:

  1. If someone calls you saying that they are from the CRA and asks you for personal or financial information, really question the caller and ask yourself is the requester asking for information I would not provide in my tax return? (such as my passport number, health card, or driver’s licence) Is the requester asking for information I know the CRA already has on file for me? (such as my social insurance number).
  2. When in doubt, hang up and call the CRA through the official phone number to verify if you owe back taxes or are eligible for a refund. You could also check your online CRA Account to make sure that there is no problem with your tax account. Here are some examples of fraudulent scam stories.
  3. The CRA will never ask you for credit card information or for prepayments by prepaid credit cards or your personal information by email or text message. So if you receive mail, an email or a text message requesting personal information, know that these are fraudulent and never respond to them.  
  4. The CRA will never email a link to you and ask you to divulge personal or financial information. However, the one exception is if you call the CRA to request a form or a link for specific information. In this case, a CRA agent will forward the information you are requesting to your email during the telephone call. This is the only circumstance in which the CRA will send an email containing links.
  5. If you are a responsible citizen that pays your taxes on time and correctly, then it would not make sense for the CRA to claim that you committed a tax evasion. If in fact there are tax evasion allegations against you, then CRA will do so formally in writing.  And even in this case call the CRA through the official phone number to verify if you owe back taxes. You should also check your online CRA Account to check the status of your tax account.
  6. CRA will never use coercive or nasty language to threaten you. Cases of fraudulent communication could include using intimidation or coercive language to frighten taxpayers into paying a fictitious debt to the CRA.  The scammers may threaten to arrest you if don’t pay your fine. Yet, in reality, the CRA will never threaten to arrest you.
  7. Fraudulent communication could play out more subtly as well. The scammers could insist that personal information is needed to process a refund or benefit payment. Yet, in reality, the CRA will never request money or demand credit card information over the phone.
  8. The CRA never shares your taxpayer information with another person, unless you have given the appropriate authorization.
  9. The CRA never leaves personal information on your answering machine or requests you to leave a message containing your personal information on an answering machine.
  10. If you feel that you’ve been a victim of fraud or have received deceptive telemarketing, you should call 1-888-495-8501 or visit CRA fraud website. Follow these steps if you’ve been defrauded.

If you are unsure if the phone call, email or text message is legitimate or a fraudulent message, ask your Chartered Accountant. Your Chartered Accountant should know how the CRA communicates with taxpayers and your chartered accountant should be able to distinguish between fraudulent communication and legitimate communication from the CRA.

If you require consultation or a have any accounting inquires, please do not hesitate to contact us. We serve clients in Toronto, North York, Vaughan, Thornhill, Richmond Hill, and all other GTA cities.

Polina Presman, CPA, CA

T- 416-371- 6017
F- 416-667-0404

Shani Marzin, CPA, CA

T- 416-731-9031
F- 416-667-0404

S&P Accounting Services LLP
2727 Steeles Ave. W. Suite 300
North York, ON, M3J 3G9
www.spaccountingservices.ca

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