The Holidays are Coming, Prepare Your Marketing

By Randall Orser | Small Business

As the holidays are quickly approaching, you shouldn’t be doing business as usual. Want to finish the year with stronger-than-expect earnings? Then the following tips will help.

Holiday Makeover for Your Website

Your website is important, so don’t be a Scrooge about it. Are your customers families? You can rewrite your headlines to draw attention to products that are great presents for teachers, bus drivers, and coaches. Are your customers into eco-friendly products/services? Think about a ‘green gift ideas’ link on your home page. Better yet, do you have pictures of your clients enjoying using your products/services? Maybe during prior holidays? Use those along with a testimonial; a video is even better. These could be a way to generate more sales.

Use a Limited Time Offer

Is there something in your business that you could offer during the holidays? A nursery, could sell specialty greens or decorative wreaths. If you sell food and beverage items, you could sell holiday-themed kitchenware. Are you in a service business, you could host a holiday-themed even with food and music – you could tie it to a local charity and donate a portion of the proceeds. Your goal is to increase sales in a celebratory way.

Put a Bow on it

Your holiday shoppers are busy, so why not help relief their stress by offering gift-wrap services. You could include a variety of paper choices, gift bag, gift receipt, and gift card. The bonus is you may be able to make some profit on this service.

Avert Shipping Snafus

The busiest time of the year is traditionally mid-December, so it’s best to avert any shipping catastrophes. With this time comes much more mail and that means sorting and transit times take longer, or worse more lost packages. You could encourage your customers to order soon, and hopefully more, by using early bird promotions such as discounts, buy-one-get-one deals, or free shipping. By doing this, you can decrease shipments you send out during the holiday rush.

Clearly State an “Order By” Deadline

You should setup an order deadline date for those last-minute shoppers in order for them to get their orders in time. Make sure this shows up on a prominent place on your website. What shipping options are you offering? If only ground, then you may want to add an express shipping option to pick up more last-minute orders.

Get into the Spirit of the Season

Surprise your customers with a gift in their order, think of something thoughtful and useful. A tote bag, bottle openers, letter openers, are low-cost promotional items that can be used regularly. Appreciative customers may become repeat customers as well as recommend your business to family and friends. Think about branding that item as well, it’s a good economical advertising tool, too!

Reward Social Media Shares

People today want to share their life with others and social media allows them to do that. Of course, when we get a gift we want everyone to know about it. When a customer shares your product on social media and tags your business, enter them into a sweepstakes. Your lucky customer wins a prize, and you get an increase in brand impressions.

During the holidays, there are many ways to energize your online business. You can do that with a festive website makeover, have a limited time offering, giving your distressed customers gift-wrap options, use early bird options to get your customers to order sooner and more, clearly state your “order by” deadline, use branded gifts to surprise your customers, and reward social media shares. Have a merrier bottom line by using holiday marketing.

Is it Time to Register for GST/HST?

By Randall Orser | Sales Taxes

This is one question I get asked a lot by new businesses as to whether or not they should register for the GST/HST. I usually say ‘Yes’ so you get used to charging it and your customers get used to paying it. We’ll talk about what is the GST/HST and when do I register for it. If you’re incorporated then it’s a definite ‘yes’ to registering as you’ve went to the bother of incorporating, you may as well collect GST/HST.

What is GST/HST?

GST stands for Goods and Services Tax and HST stands for Harmonized Sales Tax. The HST is where a province has merged its provincial sales tax (PST) with the GST. In Ontario, that province merged it’s 8% PST with the GST and made an HST of 13% (the provincial portion was lowered by 2% points). Note, the GST and HST are the same tax, just different percentages, and you remit them at the same time on the same form.

The GST is a tax that applies to the supply of most property and services in Canada. Generally, the HST applies to the same base of property and services as the GST. In some participating provinces, there are point-of-sale rebates equivalent to the provincial part of the HST on certain items.

Although the consumer pays the tax, businesses are generally responsible for collecting and remitting it to the government (Quebec administers its GST/HST). Businesses that are required to have a GST/HST registration number are called registrants. Registrants collect the GST/HST on most of their sales and pay the GST/HST on most purchases they make to operate their business. They can claim an input tax credit, to recover the GST/HST paid or payable on the purchases they use in their commercial activities.

When do I register for GST/HST?

Generally, you don’t have to register if you’re worldwide sales are less than $30,000, unless you want to be able claim for any GST/HST you paid out to suppliers. You should be looking at the past 4 quarters of sales and if at any time it’s coming close to $30,000 then you should register. For example, if you find that your sales are at $30,000 by the end of June, then you need to register; however, if it’s December 28th, then you probably won’t have to register.

If you’re starting a business and expect to make a lot of supply or equipment purchases then you need to register for GST/HST as soon as your business name is approved and registered, and, definitely, before you buy anything for the business. I have seen so many people get excited about their new enterprise that they go crazy buying stuff and then realize they should register for the GST/HST. Of course, once you’ve bought stuff it’s too late, and CRA won’t backdate your GST/HST registration unless you’ve been invoicing customers (you’ll have to prove that you’ve invoiced customers).

There are situations where you don’t register as you’re selling an exempt product/service, such as insurance or a financial planner. In this case, you can’t register, would not charge GST/HST, and cannot claim any input tax credits either.

Another situation when it’s best to register from the start is when you buy an existing business, or part of a business. When a business sells to another business then the businesses can opt to elect that the GST/HST does not apply to the supply of the business. You would file form GST44 - Election Concerning the Acquisition of a Business or Part of a Business and send that in with your first GST/HST return after acquiring the business. If you’re GST/HST return is filed electronically then just send the GST44 into your tax centre.

If you’re mostly business-to-business sales then definitely register as businesses are used to paying GST/HST, and they know that if you’re not charging GST/HST then you’re making less than $30,000 and that you’re a new business. For business to consumer, it’s a bit more difficult as consumers’ hate paying tax and will sometimes go to great lengths not to pay it. In the end, I still think it’s best to register for GST/HST as your goal is to have a business and this makes you look more professional.

Eight Expenses You Cannot Deduct on Your Taxes

By Randall Orser | Personal Income Tax

Tax time is fast approaching, yeah, I know it’s not even Christmas yet, but the time flies like crazy nowadays. However, you’ve been doing well this year keeping track of your receipts. However, before you get too excited and start adding that stuff up you may want to ensure that what you’ve collected is actually deductible.

Commuting Costs

You’ve got to get to work and back, however, CRA sees this as personal time, and, therefore, mileage is not deductible. We did have a public transit credit for a couple of years, however, the Liberals saw fit to eliminate this in 2017; apparently on the rich used it. If you’re a small business, and you’re home-based, any mileage you travel to a client or customer site, then you can claim that mileage or the cost of the automobile receipts.

Home Insurance

The insurance you get to protect your home from fire, water, wind and other damage, including theft, is not considered deductible. However, if you have a small business you can claim a certain amount based on the home office deduction percentage you claim.

Charities That Don’t Qualify

We all like to help others from time to time, and giving to a charity is a great way to help others and make the world a better place. In order for you to be able to use a charitable receipt as a deduction, it must be registered with Canada Revenue Agency (CRA). At the time you donate, the charity should be able to tell you their status, as well a registration number should show up on the receipt (9 digits followed by RR, for example: 123456789RR0001.

Funds that you give to family or friends, even for a financial hardship, do not qualify for a charitable deduction.

Taxes

The taxes you pay to the federal government for income taxes do not qualify for a deduction, as much as we’d love to be able to do that. Some taxes, such as property taxes, provincial sales taxes, business license fees, can be deducted from business income.

Plastic Surgery

If you decide to have plastic surgery, or any other cosmetic surgery procedure, this would not qualify as a tax deductible medical expense. Any cosmetic surgery procedure must be considered medically necessary and prescribed by a doctor.

Over-the-Counter Medications

Those medications, such as Nyquil, Tylenol, Advil, etc. are not tax deductible; only medications prescribed by a doctor with a valid prescription receipt are deductible from your taxes. This also goes for supplements whether or not prescribed by a homeopathic, or other doctor; and that includes supplements bought from a pharmacy or nutrition store.

Child Support Payments

Payments you make to your spouse for child support are not considered deductible for tax purposes. The though behind this to make child support non-deductible and non-taxable was that there should be no direct tax advantages for supporting one’s own children whether living together or apart.

Penalties and Interest

There are times when things just get beyond us and we end up incurring penalties and interest when it comes to filing our taxes. Depending on how far behind you did get, these penalties and interest could get quite high. However, you can still not deduct these from your taxes.

What expenses are a tax deduction? And, what are just money well spent? That can be a confusing question. Using the tips above, should help you avoid creating a red flag that will get the attention of CRA, and then having it disallowed and penalties and interest added.

Are Your Employee CPP/EI Deductions Correct?

By Randall Orser | Payroll

As we’re coming to the end of the year, it’s a good time to check if you’re correctly calculating and deducting for Canada Pension Plan and Employment Insurance. You may think the software, or even Canada Revenue Agency’s Payroll Deductions Online Calculator (PDOC) are doing the correct job, however, that’s not always the case. In most cases, there’s not much of a different, but in some cases, it can be substantial.

Pensionable and insurable earnings review (PIER)

Each year, CRA checks the calculations you made on the T4 slips that you filed with your T4 Summary. CRA does this to make sure the pensionable and insurable earnings you reported agree with the deductions you withheld and remitted.This should be something you’re doing before you do your final remittance for the year in January of the following year. If you have someone preparing your T4s using software, they can do this for you before you file your December remittance in January. The software checks the CPP & EI and then adjusts the amounts and puts them to TAX. The reason to do this before the final remittance before the year is so you don’t end up with a credit balance on your payroll deductions account (this tends to trigger CRA into asking questions).

If you’re doing the T4s yourself then there is a way of checking the CPP & EI amounts.

Checking the amount of CPP you deducted

Step 1 – Prorate the maximum CPP contribution for the year by following these steps:

Stage 1: Deduct the year's basic exemption ($3,500 for 2016) from the year's maximum pensionable earnings ($54,900 for 2016).

Stage 2: Multiply the result of Stage 1 by the number of pensionable months.

Stage 3: Divide the result of Stage 2 by 12 (months).

Stage 4: Multiply the result of Stage 3 by the CPP rate that applies for the year (4.95% for 2016).

To find out about the previous and current exemptions, maximums, and rates, see the CPP contribution rates, maximums and exemptions chart.

Step 2 – Calculate the CPP contribution per pay period using the Manual calculation for CPP, and withhold the amount calculated until one of the following happens:

* the maximum prorated contribution for the year is reached; or

* the last pay period for which deductions are required is completed.

Step 3 – The correct amount of CPP contributions will be the result of Step 1 or Step 2, whichever is the lowest.

Example

Brent turns 18 on June 15, 2016. He receives $1,000 every two weeks ($26,000 a year). This amount is less than the maximum pensionable earnings ($54,900 for 2016) that require CPP contributions.

Prorated maximum contribution for 2016:

($54,900 – 3,500) × 6/12 × 4.95% = $1,272.15
(6/12 represents the number of pensionable months divided by 12).

Brent’s maximum CPP contribution for 2016 is $1,272.15.

Pay period calculation:

January to June 2016

No CPP contributions

July to December 2016

* Pay period: biweekly* Earnings: $1,000

* Brent’s first pay in July is July 3, for the period June 20 to July 3.

Using the calculation in the basic exemption chart, Brent’s CPP contributions for each pay are calculated as follows:

Step 1: Brent’s pensionable earnings = $1,000.00

Step 2: Basic exemption for the period from the basic exemption chart = $134.61

Step 3: Pensionable earnings minus basic exemption = $865.39

Step 4: CPP contribution rate for 2016 = 4.95%

Step 5: CPP contribution per pay period = $42.84

You will have to start deducting $42.84 from each of Brent’s pays, beginning with the one dated July 3 (the month after Brent turns 18). His actual contributions for the year will be $42.84 × 13 (biweekly pay periods) = $556.92.

This does not exceed the prorated maximum contribution of $1,272.15; therefore, the correct amount of CPP has been deducted.

When you fill out Brent’s T4 slip at the end of the year, report $26,000 in box 14, $556.92 in box 16, and $13,000 in box 26. Fill in the rest of his T4 slip in the usual way.

Checking the Amount of EI You Deducted

Checking EI is much easier than CPP as there is no yearly exemptions, though there is a yearly maximum income amount (2017 = $51,300 and $836.19 in total EI). Basically, you take the employee’s income for the year times it by the current EI rate (1.63% to maximum of $836.19) and that’s what should’ve been deducted from the employee.

Example

Bob earned $47,000 in the year, so his total EI contributions should be $766.10. If that matches what you have in your records then you’re good to go, if it’s under you’ll have to take more off of Bob’s next cheque. If it’s more, then just adjust his EI to match that amount and add the difference to his TAX amount. If it’s just a couple of pennies, don’t worry about it.

The annual maximum insurable earnings ($51,300 for 2017) apply to each job the employee holds with different employers (different business numbers). If an employee leaves one employer during the year to start work with another employer, the new employer also has to deduct EI premiums without taking into account what the previous employer paid. This is the case even if the employee has paid the maximum premium amount during the previous employment.

Crucial Factors Your Online Business Needs

By Randall Orser | Small Business

Are you thinking about launching an online business? You see there’s potential for an e-commerce store, and believe you can make this business a success. Before you leap into this e-commerce business, it’s essential you come up with a business plan. Check out the critical business plan elements below to ensure you’re acquainted with your new venture.

Target Marketing

Your goal should be to build a long-term business, and to do that you need to understand the market you’re targeting. A marketing analysis overview built into your business plan will cultivate market opportunities or challenges. A farmer’s not going to sow seeds without know the soils condition, you shouldn’t build an online business without understanding the sector you wish to build in.

Marketing Plan

Having a marketing plan is crucial to your success. Posting haphazardly to social media and hoping something appeals to your potential customers is just pointless. You need to create a monthly and yearly marketing plan so you can see where the opportunities for long-term success are. Having a detailed marketing plan allows you to ramp up your seasonal growth initiatives in advance rather than being caught off guard due to poor planning.

Product Plan

Your business strategy must include a product plan. Do you know what your company’s monetization strategy is? You need to determine the long-term implications of your company’s products. Would your business’ viability be drastically impacted if market trends change? Is your product offering a one-time only sale, or can it be offered on a subscription basis? Developing a thorough product plan is a must or else your business ends up being a one-hit wonder with no repeat customers.

Financial Plan

This is an important aspect of your business as you want to avoid the dips in business revenues. By planning for future expenses such as taxes and inventory upgrades, you reduce the stresses of running your online venture. You need to develop a yearly plan to keep an eye on business growth, and having a five-year and ten-year plan can help you do that over the long-term.

Exit Strategy

It may seem like an odd thing to be doing at the beginning of your business, however, having an exit strategy is smart business. Are you going to run your business after you retire? Are you anticipating on selling your business to an interest investor or business partner? Knowing how you’ll exit your business is just as important as understanding why you started it in the first place.

Building an online business, or any business for that matter, that succeeds for many years is not easy. You need to be smart in planning your company’s development similarly as a brick-and-mortar business owner would plan its future. Are you going to integrate the above tips into your company’s business plans?

Have You Made Your Tax Instalments This Year?

By Randall Orser | Sales Taxes

You may be a self-employed person, and if you end up owing more than $3,000 in income taxes, then you will have to make instalments the next year. Other than the self-employed person who has no tax taken off their income during the year, there are reasons why you may owe tax come April 30th. This can happen if you earn income from rentals, investments, certain pension payments, or income from more than one job. If you have more than one job, you are only allowed to claim your exemptions on one job; the other jobs you should claim zero (0).

There are two factors to consider when determining if you have to pay tax by instalments: 1) your net tax owing; 2) your province or territory of residence.

You have to pay your income tax by instalments for 2017 if both of the following apply:

  • your net tax owing for 2017 will be above the threshold for your province or territory ($1,800 or $3,000)
  • your net tax owing in either 2016 or 2015 was above the threshold for your province or territory

You do not have to pay your income tax by instalments for 2017 if your net tax owing for 2017 will be $3,000 or less ($1,800 or less for residents of Quebec), even if you received an instalment reminder in 2017.

If you received an instalment reminder that shows an amount to pay, you may have to pay your income tax by instalments.

If your main source of income in 2017 is self-employment income from farming or fishing, you must make an instalment payment if both of the following apply:

  • your net tax owing for 2017 will be above the threshold for your province or territory ($1,800 or $3,000)
  • your net tax owing for 2016 and 2015 was above the threshold for your province or territory ($1,800 or $3,000)

Your province or territory of residence will determine the threshold of net tax owing you will use when determining if you have to pay tax by instalments. If you live in Quebec on December 31 of a year, use a limit of $1,800 of net tax owing. If you live in any other province or territory on December 31 of a year, use a limit of $3,000 of net tax owing.

What is an instalment reminder?

An instalment reminder is sent to help you determine if you have to pay income tax by instalments. The reminder will suggest an amount to pay and list the calculation options.

CRA sends instalment reminders to people who may have to pay tax by instalments:

  • The February reminder is for the March and June payments
  • The August reminder is for the September and December payments

If you only received an August reminder, and the reminder does not mention a March or June 2017 instalment payment, follow the instructions that apply to you:

No-calculation option – Pay the amount shown in box 2 of your reminder for September 15 and December 15.

Prior-year option – Calculate your 2016 net tax owing and add any CPP contributions payable, and any voluntary EI premiums payable. Pay 75% of the total on September 15 and 25% on December 15.

Current-year option – Estimate your current-year 2017 net tax owing and add any CPP contributions payable, and any voluntary EI premiums payable. Pay 75% of the total on September 15 and 25% on December 15.

If you received an instalment reminder and you are required to pay instalments but do not comply, you may have interest and penalty charges.

You can also see your instalment reminders online using My Account.

Instalment interest and penalty charges

You will be charged interest if all of the following conditions apply:

  • CRA sends you an instalment reminder in 2017 that shows an amount to pay
  • you must pay by instalment in 2017
  • you did not make instalment payments, or you made payments that were late or you paid less than what you had to pay

CRA charges instalment interest on all late or insufficient instalment payments. Instalment interest is compounded daily at the prescribed interest rate, which can change every three months.

How does CRA determine the interest?

  1. CRA calculates interest on each instalment payment that you should have paid from the day it was due to your balance due date based on the payment option that results in the least amount of interest.
  2. CRA calculates the interest on each instalment you paid for the year starting from the later of the date the payment was made or January 1 up to the balance due date.

Then, they determine the interest you owe by charging the difference between a. and b., if the difference is more than $25.

Instalment penalty

You may have to pay a penalty if your instalment payments are late or less than the required amount. CRA applies this penalty only if your instalment interest charges for 2017 are more than $1,000.

To calculate the penalty, CRA determines which of the following amounts is higher:

  • $1,000
    or
  • 25% of the instalment interest that you would have had to pay if you had not made instalment payments for 2017

Then, CRA subtracts the higher amount from your actual instalment interest charges for 2017. Finally, CRA divides the difference by two and the result is your penalty.

As you can see, it is definitely worth it to make your instalment payments if you get any kind of instalment reminder from CRA. If it’s your first year being self-employed, and you know you’ll owe more than $3,000 come February, for the following year you’ll want to make those instalment payments in March/June/September/December. In the end, paying by instalments does relieve you of that huge bill come April 30th.

Six Growth Initiatives to Help Build a Long-term Business Strategy

By Randall Orser | Small Business

Building a profitable business is much more than launching a website and hoping for the best. The smart entrepreneur realizes he needs a plan, and a long-term one at that. Growth initiatives are definitely part of a premiere business strategy. Thinking about challenges and opportunities that could come up allows you to stack the odds of success in your favour. Here are six growth initiatives you should think about adopting in your business plan.

Managing Operating Costs

If you’re not watching your operating costs, they can get quite out of hand and quickly. You’re approving work orders, signing off on supply purchases, and hiring additional staff, which can add up noticeably. You need to have a definite plan together before these operational costs escalate. The profitability of your business greatly depends on you managing your operational costs.

Improving Profitability Ratios

How do you plan on improving profitability over time? Are you expecting reduced supply costs will just generally occur? It is critical that you plan for profitability improvements. Unless you want your revenue-to-expense margins to take a nosedive, you must develop a plan to address ways to increase company profits.

Maintaining Workforce Productivity

Workforce productivity is another key growth initiative that many business owners dread facing. It’s perfectly natural for your employees’ enthusiasm and job performance to slowly wane over time. In order to position your company for success, you need a strategic plan in place to address productivity. You could look at gamification to rewards-based incentive programs to keep your workers engaged and productive.

Inventory Management

To keep your business running smooth, you need an inventory management plan. You could be hurting your business with too much inventory, as well if you have too little; customers may go elsewhere if your inventory is too old, or you don’t have enough to meet demand. You should be prepared for supplier shortages as well as seasonal product demands, so you can ensure your sales don’t take an abrupt dip.

Product Development

To stay ahead of the competition, you need to incorporate product development into your growth initiatives. Realizing that your sales will stagnate if your business never innovates is an essential business truth you need to address. Constructing a product development strategy helps you to remain excited about your business growth opportunities and gives your sales people opportunities to look forward to.

Competitive Businesses

Once your business becomes profitable, you’re going to have competition. You could face local competitors and international knock-offs. Now, you won’t be able to stop the copycats from copying your business, however, you can plan for their arrival. Will you try to buyout your competitors and/or hire their staff? Will you patent your technology? Or trademark certain systems you’ve developed? That old cliché ‘failing to plan is planning to fail’ was never truer than when it comes to your competition. You can deal with potential competitors by having a plan for such a strategy in place.

Putting growth initiatives into your business plans benefits your company’s readiness for success so you’re not blindsided by challenges you should’ve had the smarts to plan for. Your top priority should be to build a company that survives over the long-term. Unless you want a flash-in-the-pan business, you must have a strong growth strategy. Are you ready for the challenges above as you grow your business?

Ensure You Have All Your Medical Receipts

By Randall Orser | Personal Income Tax

It’s the digital age, and the government is somewhat getting behind that by allowing us to electronically file our tax returns. However, with that Efile® comes the problem that Canada Revenue Agency (CRA) doesn’t get all your receipts and/or slips like it used to when we paper filed. The number of ‘reviews’ has increased considerably over the years, and one of the big ones CRA reviews is medical receipts.

CRA can do a pre-assessment review of your medical expenses where they ask for your medical receipts before they actually process your return. This usually happens when you have a large amount for medical expenses; that could be $5000 or up.

Then there’s the post-assessment review where they process your return as filed, however, later in the year when CRA has time, they’ll look at medical expenses. This happens when they either couldn’t get to your return pre-assessment, or the amount wasn’t at their threshold at that time.

Either way, you’ll get a letter from CRA outlining what they’re looking at and what they require. Something like this:

Dear Madam:                                                                                    

Re: Income Tax and Benefit Return for 2016

​Account Number         XXX XXX 264

Reference Number      TB1718 6045 7310

We regularly conduct review programs as an important part of the self-assessment tax system. To determine if we have assessed your return con-ectly, we need more information. Please note, if you claimed a provincial or territorial 11011-reftmdableta x credit that corresponds to the federal tax credit

under review, we will review both credits at the same time.

Medical expenses          Amount being reviewed $x,xxx.00

LINES 330 AND 331 OF SCHEDULE 1

To support your claim for medical expenses for self, spouse or common-law partner, and your dependent children born in 1999 or later, and/or the allowable amount of medical expenses for other dependents, please provide the following information, as applicable:

all receipts, forms, and/or other supporting documents or medical certificates;

Receipts have to include the following information:

the name of the patient;

the type of service provided;

the amount and date of the payment for the services provided;

the name of the person who made the payment;

If submitting a pharmacy statement, it should also contain the name of the

controlled drug, preparation, substance, or the Drug Identification Number (DIN).

NOTE: Cancelled cheques and cheque images are not acceptable receipts.

a detailed statement from the insurance company confirming:

the name of the patient;

the date and the amount of the payment;

the name of the controlled drug, preparation;

the kind of medical, paramedical, and/or dental expenses;

the amount that has been or can be reimbursed.

  • indicate the 12-month period used. If a 12-month period is not indicated, we will use the calendar year.
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Five Ridiculously Simply Ways to Improve Your Christmas Marketing

By Randall Orser | Small Business

You’ve had a great year so far, you’re busy, sales have been solid, and you’re well on your way to a profitable year. You know your company has the holiday spirit and you want to highlight that come November and December; however, where do you start. There’s tons of ways, some won’t even cost you a penny, to tune up your normal marketing efforts to accentuate your businesses lighthearted mood. Which of the following ridiculously simple ways will attract those super shoppers to your business?

Seasonal Pinterest Board

On your board, share images of your holiday decorations, staff members in festive garb, or the latest products you brought in for the Christmas season. Festive quotes are another way to round out your collections, and you now have a holiday board perfectly poised to bring seasonal cheer to your customers. Publish local events, and use relevant keywords to attract local patrons to your Pinterest board and your business.

After Hours Holiday Event

This is a great way to thank your customers and perhaps get new customers. Have your guests register in the weeks leading up to the event by offering a drop box for their business cards or registration forms. You could even make it a by invite only event, or have a pre-party for your best customers. At the event, promote new products you’ll soon be launching or spotlight stock arrivals for spring and summer. Everyone is busy during the holidays, so ensure your event is captivating enough that they’ll make time in their packed schedules.

Local Charity Event

Is there a local charity everyone can get behind? The food bank is a great one, and they’re usually up for being part of your event. Tailor your event to what the charity’s greatest need is, and then adapt the event specially for those needs.

Create a Seasonal Video

A seasonal video is a great way to promote the business and post it to YouTube, Facebook, Twitter, etc. The funnier you make your video the better the chances are for social shares. Maybe find a local Santa and have him talking and laughing with you about the naughty and nice employees in your business.

Video Contest

You may not feel comfortable doing your own video, maybe think about a video contest amongst your customers. The best video can win a gift certificate from your business, maybe a basket of your products, or something else. Your customers will have fun connecting with your company, plus you get a wealth of user-generated content for your website or YouTube channel.

Marketing for the holiday season doesn’t have to be hard as long as you get creative approach. What would resonate with your customers, and still give you a reasonable ROI for your efforts. Think creatively, and you’ll be able to conjure up lots of great ideas to fine-tune your marketing plans for the holiday season.

Should I Invest in my RRSPs now?

By Randall Orser | Personal Income Tax

Now is the perfect time to check where you RRSP contributions have been for the year, and where they’ll be in by the end of February. Do you have the room to put more in? Do you have some extra funds lying around? You may want to put the funds in now, and earn some income on them rather than wait until February; plus, you’re beating the rush and not scrambling to get them in by March 1st.

I’m going to assume you know what is an RRSP, and have hopefully checked what your contribution limit is for the year. Does your work have a pension plan? If so, how much have you contributed so far, as that comes your contribution limit.  If you’ve reached your contribution limit, then what about your spouse? You can always put money into their RRSP, up to their contribution limit (they would need to be the contributor and annuitant).

Planning Opportunities

Contribute early in the year. This helps shelter income for a longer period and increases the compounding of the income in the plan. A monthly plan can also be used to help with cash flow.

Use the spousal plan (including common-law spouse) as much as possible to split the income tax upon withdrawal. Remember not to withdraw from any spousal plan until 3 years after the last contribution was made or it will be added to the income of the contributor. Note that it is the timing of the payment of contributions to a spousal RRSP that governs this recapture rule, not when (or whether) you claimed a deduction.

Make your money work for you. Consider other investments within your RRSP, such as mutual funds. Carefully consider what you invest in to maximize your return. (See schedule on page 3)

Utilize “rollovers” (special RRSP contributions). You may find yourself in a situation where you receive a payment which qualifies for special contribution treatment.

These special situations include:

  • Special payments you receive on leaving employment, either in recognition of long service or as damages for loss of office. Note that years of service after 1995 no longer qualify;
  • Lump-sum payments received from foreign pension plans for services performed outside Canada;
  • Lump-sum payments received from a United States IRA and taxable in Canada;
  • Amounts received from the RRSP or RRIF of a spouse, or in some cases, a parent or grandparent, who has died; and • The “cost amount” of shares you receive, directly or through a trust, in a special lump-sum distribution from a DPSP.

The magic of compound interest! Annual contributions of $13,500 at an average interest rate of 8% per annum made at the beginning of each year accumulate over $15,000 more interest in the first 10 years than contributions made at the end of the year. After 25 years, the difference is over $75,000!

The compounding effect of interest earned on the RRSP is clearly demonstrated above by the difference in interest rates. An investment of $13,500 per year at 6% interest per annum grows to $785,111 at the end of 25 years, while the same amount invested at 8% grows to $1,065,885.


Should You Borrow to Finance an RRSP

Interest on money borrowed to make RRSP contributions is not a deductible expense for tax purposes. If you have a choice between borrowing to make an RRSP contribution or borrowing to make another investment, you should always borrow to make the other investment. The interest paid on the investment loan may well qualify for tax deduction and thus offset the cost of borrowing.

Spousal RRSP

A spousal RRSP is an RRSP which names your spouse rather than yourself as the “annuitant” but you have made the contribution. Any amount, which you could have contributed to your own plan under your current contribution limit, can instead be contributed to your spouse’s plan. Contributions made by you to your spouse’s RRSP can be deducted from your income. Your spouse will be taxed when the funds are withdrawn subject to the 3-year rule described in Planning Opportunities above.

Once a cohabitation relationship achieves the status of a common-law marriage under the 12-month or child rule, that marriage is considered to continue until there is a marital breakdown marked by a separation of at least 90 days.

Common-law spouses are included in the definition of spouse and are, therefore, eligible for the spousal plan, although there are still some questions as to how Canada Customs and Revenue Agency will monitor the common-law relationships.

The special rules on spousal RRSPs are very beneficial. Ideally, you and your spouse should have the same amount in your RRSPs at retirement. However, when using a spousal RRSP, you should note that the contributing spouse would be taxed on any withdrawals within 3 years of the last contribution to any spousal plan.

Are You Leaving Canada?

If you leave Canada for an extended period, you must determine whether you are going to become a non-resident for income tax purposes.

If you have withdrawn funds from an RRSP under the Home Buyers’ Plan (you qualify as “first-time home buyers” could borrow up to $20,000 from an RRSP to purchase a “principal place of residence”), and become a non-resident before acquiring your Canadian home, your withdrawals will be disqualified and added to your income in the year of withdrawal. You may cure the disqualification by refunding the withdrawal and cancelling your participation in the plan.

If you have withdrawn funds from an RRSP under the Home Buyers’ Plan and become a non-resident after acquiring your Canadian home, you must repay the entire withdrawal within 60 days of becoming a non-resident. To the extent that you do not repay the amount within 60 days, the unrepaid balance will be included in your income for the period of the year in which you were still a resident of Canada and taxed accordingly.

Now is a great time to review your RRSP, and what you want to accomplish with it this year. Think about all that money you’re missing out on by not investing now, and waiting until January or February of next year. That’s a missed opportunity, and that’s just sad.

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