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Employers – Don’t Make These Five Hiring Mistakes

By Randall Orser | Small Business

Hiring staff is probably one of the most talked about things a business person does. It’s not easy and it can be somewhat forgiving. When you’re hiring someone, you have to consider their skill level as well as their personality, and how are you going to incorporate them into your business (on-boarding). We’re looking at the five common hiring mistakes many new employers make.

Narrowing Your Search Too Much

You probably have the image of the ‘perfect’ candidate, however, you’re doing yourself a big disservice as most applicants won’t be that ‘perfect’ fit. Don’t fall into the trap of hiring the same individual every time you need to hire someone. Businesses that are diverse are much more successful. As they say, ‘hire for attitude, not aptitude.’

Going with First Impressions

While first impressions are crucial, they should not be the only basis on which you hire. Too many employers base their hiring decision on whether or not they are impressed at the first meeting, rather than the skills and mindset of the candidate. The most challenging aspects of the hiring process is not knowing if the candidate will perform to your company’s standards once they are hired.

Not Knowing What You Need

You should know what your business needs when it comes to hiring; more than just filling the positions for which you’re hiring. You must be clear on what the job entails in regard to the duties and responsibilities. The worst thing you can do is misled the candidate as you risk a bad hire. You should have a detailed job description, so the candidate knows exactly what they will be doing when hired.

Unclear Hiring Policies

Things change a lot in the world of business, and we’re okay with that. However, for hiring you need to be clear on your hiring policies no matter how many times it’s changed. With unclear hiring policies come mishaps, including confused hiring managers, and perhaps legal trouble. As an employer you need to have a handbook that covers your rules and regulations of your business.

Not Showcasing Your Company Culture

Your potential hires want to know what your business has to offer them. As they’re away from their family for half the day, they want to know what your work environment is like. They want to know about benefits, salary, flexibility, and perks. The last thing a potential hire wants to do is take a financial gamble with your company. By being clear with your hiring intentions, you avoid this mistake.

The perfect employee doesn’t really exist; however, you can get close. The above tips will aid in your hiring process and increase your chances of a good hire.

Are You an Apprentice?

By Randall Orser | Small Business

Have you recently become an apprentice for one of the trades or other? If so, you may be able to get some tax incentives. You can get a credit for the tools you have to buy, as well as the tuition and books you need to do the schooling for your trade.

Tradesperson’s Tools deduction

If you have purchased eligible tools to earn employment income as a tradesperson or apprentice, you may be able to deduct their cost, including any goods and services tax (GST), provincial sales tax (PST) or harmonized sales tax (HST) you paid.

An eligible tool is a tool (including associated equipment such as a toolbox) that:

  • you bought to use in your job as a tradesperson and was not used for any purpose before you bought it;
  • your employer certified as being necessary for you to provide as a condition of, and for use in, your job as a tradesperson; and
  • is not an electronic communication device (like a cell phone) or electronic data processing equipment (unless the device or equipment can be used only for the purpose of measuring, locating, or calculating).

Maximum deduction for eligible tools is the lesser of:

a) $500; and

b) the amount, if any, determined by the formula

A − $1,161 where

A = the lesser of:

1. the total cost of eligible tools that you bought in 2016; and

2. your income from employment as a tradesperson for the year

  • plus, the amount you received in 2016 under the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant programs;
  • minus the amount of any Apprenticeship Incentive Grant and Apprenticeship Completion Grant overpayments that you had to repay in 2016.

You are an eligible apprentice mechanic if you:

  • are registered in a program established under the laws of Canada or of a province or territory that leads to a designation under those laws as a mechanic licensed to repair self-propelled motorized vehicles (such as automobiles, aircraft, boats, or snowmobiles); and
  • are employed as an apprentice mechanic.

Eligible Apprentice Mechanic

As an eligible apprentice mechanic, you must first calculate the tradesperson's tools deduction (above), if any, that you qualify for.

You are an eligible apprentice mechanic if you:

  • are registered in a program established under the laws of Canada or of a province or territory that leads to a designation under those laws as a mechanic licensed to repair self-propelled motorized vehicles (such as automobiles, aircraft, boats, or snowmobiles); and
  • are employed as an apprentice mechanic.

An eligible tool is a tool (including associated equipment such as a toolbox) that:

  • you bought to use in your job as an eligible apprentice mechanic and was not used for any purpose before you bought it;
  • your employer certified as being necessary for you to provide as a condition of, and for use in, your job as an eligible apprentice mechanic; and
  • is not an electronic communication device (like a cell phone) or electronic data processing equipment (unless the device or equipment can be used only for the purpose of measuring, locating, or calculating).

Tuition Tax Credit and licensing examination fees

If you have eligible tuition fees, as well as certain licencing examination fees, you may be able to claim them on your income tax and benefits return.

Examination fees paid to an educational institution, professional association, provincial ministry or other similar institution, to take an occupational, tradeor professional examination that is required to obtain a professional status recognized by federal or provincial statute, or to be licensed or certified as a tradesperson, to allow you to practice the profession or trade in Canada, may be eligible for the tuition tax credit. You should be provided with a receipt to substantiate your eligible exam fees. To view the information that should be contained in the receipt go to example of a receipt for licensing examination fee.

If you have more than one tax certificate, you can claim all amounts that are more than $100.

You cannot claim the tuition amount on your tax certificate if any of the following applies to you:

  • the fees were paid or reimbursed by your employer, or an employer of one of your parents, where the amount is not included in your or your parent's income;
  • the fees were paid by a federal, provincial, or territorial job training program, where the amount is not included in your income;
  • the fees were paid (or eligible to be paid) under a federal program to help athletes, where the payment or reimbursement has not been included in your income.

Education amount

You will have received a tax certificate from your educational institution indicating the number of months you were enrolled full-time (Box C) or part-time (Box B).

Full-time – Box C

For tax years prior to 2017, multiply $400 by the number of months indicated in Box C.

You can also claim the full-time amount if one of the following applies to you:

  • you were enrolled as a full‑time student;
  • you were enrolled part-time and you can claim the disability amount; or
  • you were enrolled part-time and you had a mental or physical impairment certified in a letter by a medical doctor, optometrist, audiologist, occupational therapist, psychologist, physiotherapist, or speech-language pathologist but you do not qualify for the disability amount.

Part-time – Box B

For tax years prior to 2017, multiply $120 times the number of months indicated in Box B.

You cannot claim the education amount if you:

  • received a grant, reimbursement, benefit, allowance or were reimbursed for the cost of your courses by your employer or another person with who you deal at arm's length;or
  • received a benefit as part of a program (such as free meals and lodging from a nursing school).

Textbook amount

You can claim only one textbook amount for each month that you qualify for the full-time or the part-time education amounts.

You can claim the textbook amount only if you can claim the education amount.

The amount is:

  • $65 times the amount in Box C of the certificate you received from your school; or
  • $20 times the amount in Box B of the certificate you received from your school.

This credit may disappear after 2017 tax year.

As an apprentice you have some great deductions you can claim against your income, and you should definitely take advantage of them come tax time. Just remember to keep receipts, and you have to have your employer sign a T2200 Declaration of Conditions of Employment.

Make Outsourcing Work for your Business

By Randall Orser | Small Business

How are you going to handle expansion? You need to make some decisions in your business on this front. You could hire staff and the associated risk with that plus the issue of turnover, but this is can be costly and a presumption that the growth will continue to cover your costs. Of course, you could curtail your marketing and keep your business at a constant level you can handle.

However, there is another choice that you can make that not only allows for your expansive without too much of that financial risk as the above alternatives have. Outsourcing is a way to use outside agencies to help you spread the workload. Outsourcing can be a very economical way of propelling your business forward. You do need to do outsourcing the right way if you want to reap the benefits.

Outsource the Right Functions

What is a good fit for outsourcing? Not everything is for sure. The favourable activities are those that focus on everyday administration or other routine work, rather than your core business. A good example, and one I highly recommend, is your bookkeeping and accounting, that’s a perfect choice. By outsourcing this you can draw on their experience without sacrificing control over what makes your business unique.

However, outsourcing any customer-facing activities carries appreciable risks. Your reputation is vital to your continuing success, notably in this age of social media, and you need to retain tight control on your dealings with the public. You’re much better to keep these activities in-house and assign it to a trusted staff member. Or, if you do outsource, maintain control over what is posted.

Prioritize Value Over Cost

Outsourcing can save you money, but don’t forget it’s also about growing your business in an economical way. Find the right service provider who’ll bring the right results, and don’t be afraid to pay a little more, rather than just concentrating on price.

Constantly Monitor Value

Your outsourced value may not stay the same over periods of time. You actually may grow so much that you end up bringing it back in-house as this makes the most sense at the time. Market conditions may also change to the point where your current outsourcing provider is no longer the best in terms of price or quality. Outsourcing’s main point is the freedom it does give you. If making changes will help your business grow, don’t be afraid to do so.

Patience

You need to give it time to develop the right outsourcing relationship. You need to both learn each other’s strengths and weaknesses, and effortless communications can take time to create. You need to be monitoring the results continuously and carefully, and change providers when necessary, however, cutting and changing too often means your outsourcing relationship doesn’t get the chance to settle and show its value.

Delegation and Accountability

Remember, the outsource company is not an employee, and there’s no loyalty to you or the company and they won’t work beyond their assignment. You need to determine the terms and scope of services they will provide, as well as set out the results you wish to receive. You also need to setup an effective means of communication. Who is the responsible contact on each side of the relationship? You need to make this clear from the start, as miscommunication is almost inevitable if no one is clear on who is answerable to whom.

Don’t Overlook Legalities

As the importance of the function you’re outsourcing grows, the more you need to have a contract, and you should have one for any relationship. If the results end up being not what you expected, you need a clear way out without excessive cost or difficulty. Further, you need to protect yourself from an outsource partner who just up and leaves you high and dry. You can definitely lessen these risks by having a little legal backup with a well-written contract, even the best relationships have their issues.

Outsourcing can be an attractive way to accelerate growth without committing long-term resources or risking financial stability. Even so outsourcing needs to be approached carefully to get the most out of it. Solid groundwork and awareness of the potential concerns will ensure your decision to outsource is profitable.

Get Your Receipts Together Now for Taxes

By Randall Orser | Business Income Taxes

Many shoppers in Canada quickly decline the offer of a receipt when a store clerk asks them. You won’t ever catch a small business owner doing this. It’s not that they like drowning in thousands of little slips of paper; instead, they just know that without every receipt they can get their hands on, their tax return could get out of hand. What businesses need, then, is a way of cataloging and organizing receipts to present to the Canada Revenue Agency (CRA).

The CRA has very strict rules about businesses providing proof of their expenses. They also offer lenient treatment in these matters sometimes. For instance, CRA may let businesses get away by merely showing detailed accounting and other records as proof that they have spent the money they claim and may only look at certain items. In an audit, the auditor usually has a dollar figure he wants to look at and skips over anything under that amount. Sometimes, the CRA will accept these defenses for a lack of receipts. At other times, they will have none of it. It is safest to keep receipts for everything. Two items where this is never the case is automobile and meals.

There are two parts to providing the CRA with the proof required – getting all the receipts from all the vendors you deal with and then organizing them to present to the CRA as proof. Getting the receipts is easy enough – you only have to resolve to ask for them. Organizing receipts in a manageable and presentable way, though, is the other. These tips below help you keep your records well-sorted.

To organize receipts in proper form, you need to first know what each receipt is for. When you have a load of receipts at the end of the year, it can be hard to know which proves what. Each time you get a receipt, then, you need to make notes on it for what it is for. You may not be able to use the receipt otherwise.

It can be difficult to keep hundreds of little slips of paper organized for years. The CRA can come back long after a tax year is done and ask for additional proof for something. This is what receipt scanners are there for. The CRA accepts scans in place of original receipts. Make sure that you keep a couple of backups of your scans, though. If you don’t, you could be sunk if you lose your hard drive for some reason. Taking pictures on your smartphone camera could be a great alternative, too. There are dozens of apps that help you organize your receipts.

It is hard to overestimate how confusing hundreds of receipts can be when you need to find a specific one for a specific expense. If you have the misfortune to be in a tax audit, you can find that merely having an organized set of receipts is not enough. The CRA auditor may ask for additional corroboration – in the form of a business calendar. If you are deducting travel expenses, for instance, the auditor may want to look at your business calendar to see if you actually have travel plans jotted down in there. Maintaining a detailed Outlook calendar could be a great idea.

Final tips

It is important to keep all your bank and credit card statements. These aren’t good enough to take the place of actual receipts, though. These statements typically use short descriptions for each expense. An expense line may say that you’ve spent $700 at Amazon – it won’t say that you bought business software with that money. As far as the CRA is concerned, you could have bought $700 worth of Silly String cans. You need to keep your receipts as well as your credit card statements.

Finally, whatever happens, always pay with checks or plastic. Cash expenses do come with receipts; they don’t have additional corroboration in the form of bank or credit card statements, though. As far as the CRA is concerned, there is no such thing as too much proof.

You’re much better off trying to ensure you have all your receipts for your business expense, and for those personal expenses you can deduct such as donations and medical expenses, now rather than waiting until April (June for small business); in which case, you may end up filing late.

The CRA is happy to give you thousands of dollars off your tax bill. The only thing they ask in return is solid corroboration for each expense you deduct. Collecting and organizing receipts, though, proves to be a tall order for many small businesses. These tips that follow show you where many businesses make mistakes and what you can do to keep your tax return safe. Or better yet, hire Number Crunchers® and get this headache off your shoulders.

Spark the Fire of Your Curiosity

By Randall Orser | Small Business

At a small businesses core is its owners’ curiosity. Finding new solutions to an existing problem, or simply find how something works, or why is something the way it is, and this ambition is what takes your business to greater heights. Do you have to be born with curiosity? Probably doesn’t hurt, however, you can spark your curiosity with the following four ideas.

Ask Questions

The heart of any curious person burns with questions. Look at a toddler, constantly asking ‘why?’. They want to know all the who, what, where, why, and how of things. You don’t want to be as annoying as the toddler in your questioning, however, if you want to spark curiosity you need to ask questions. Don’t stop once you get an answer. Now’s the time to figure out why it’s the way it is, and if there are other, maybe better, options. Analyze all that relates to that question.

Best of all, it’s free. While you’re trying to ascertain why certain best practices are the way they are, you get a better understanding, however, you may just bring about some insights. That insight could direct you towards other avenues that other business people didn’t see.

Expand Your Horizons

Many people often limit themselves because of their background. This influences what they think about as well as what paths they see as favourable. Some businesses will hire people from assorted backgrounds in order to get the greatest value off brainstorming sessions. You can get massive value when you have people of differing lines of thinking.

You can do this for yourself by broadening your mental horizons. One great way to do this is to travel, as experience different cultures pushes your mind to think differently. Do something different every day. Break the patterns your brain falls into.

Always be Learning

It’s great that your curious about stuff. It’s even fine that you want to know about things you don’t know but other people are doing, is good, although it’s not very efficient. Your curiosity should lead to many new things as possible, and the best way to do that is always be learning.

Whatever industry you’re in, read as much as you can about it. Go after those things that interest you to their logical conclusion. That thing doesn’t even have to be related to your work. Browsing the shelves of your local library can light your way to interesting topics. Always be learning gives you more chances for your curiosity and genius to spark.

Reassess Your Plans and Strategies

Many small business owners lose their curiosity because they adhere to their plans too strictly. This isn’t necessarily a bad thing. Your plans keep you grounded and focused, however, like many things you can take it much too far.

Why are your plans the way they are? Those plans were created using knowledge you had at the time. More than likely that knowledge has grown and changed since then. Reassessing your plans can spark something in your mind because you know more. Not only are you keeping your curiosity alive, but you get stronger plans overall.

To always be learning may not always be fun. However, knowing things is both fun and productive. This can lead business owners to concentrate only on things they know as it’s usually a positive experience. You must embrace the unknown in order for your curiosity spark to remain alive.

Will You Owe Tax at Tax Time?

By Randall Orser | Personal Income Tax

Whether or not you end up owing tax depends on many factors. If you’re employed, and don’t have income other than from your employment, then you probably won’t end up owing anything. On the other hand, if you’re self-employed, more than likely you’ll end up owing something at tax time.

Employed Person

While being an employee and getting a T4 slip at the end up of the year, you may not think you’ll end up owing on your taxes, but that may just not be the case. Do you have other income such as investments (dividends or capital gains), or withdrawals from an RRSP? Maybe you have a rental property?

Any income you earn outside of your job will cause you to owe money at tax time. How much you’ll owe will depend on what your employment income was. You have to be careful and monitor your other income during the year, so, if you do owe tax come April it’s not a complete surprise and you’ve saved up for it. Or, you’ve made instalment payments to your income tax account with CRA and you don’t have to worry about a payment in April as it’s already paid for.

Your other income may actually put you into another tax bracket, so be careful when withdrawing RRSPs and such. For 2017, the federal tax brackets are:

  • 15% up to $45,916
  • 20.5% on $45,917 to $91,831
  • 26% on $91,832 to $142,353
  • 29% on $142,354 to $202,800
  • 33% above $202,800

Where is your employment income now? And, what will your additional income be? Where does it fit into the above scale? Your tax rate will change depending on the level of income.

If you have a total income of $107,000 then you’re in the middle tax bracket of 26%. You don’t pay 26% on the full $107,000 you pay approximately: $6887(15%) on the first $45,916, $9413 (20.5%) on the next $45,915, and $3,944 (26%) on the rest for a total of $20,244.

Your employment income may have only been $85,000 and federal tax on that would be about $14,899. In this case you pay about $5,345 on the additional income of $22,000.

As you can see having that additional income can me quite a bit more tax when it pushes you into a higher tax bracket. You may be wondering how to alleviate this tax, and the best way is RRSPs. Take your profits from the other incomes and put that into RRSPs, at least you can reduce the tax you owe.

Self-employed Person

As a self-employed person, you pay income tax based on your net income (revenue less expenses), so your tax owing can vary quite a bit from year-to-year depending on how your business is doing. Any year you have a loss, it will be first applied against any other income you have, and the balance will be carried forward to the next year; you can also carry a loss back if the prior year was profitable.

Where your income fits in the above brackets is how you will be taxed. The more you make, the more you end up paying in taxes. You can alleviate tax owing by doing RRSPs, and other deductions such as spousal (if you spouse’s net income is low); tuition credits for yourself, spouse or children; child care expenses; and more.

Ideally, the goal with a business is to get the income as low as possible for tax purposes. Though, be warned, this could bite you later when trying to get personal loans or mortgages as your income may be too low for the banks.

The following, as per Canada Revenue Agency, may be considered when determining operating expenses:

The above are based on what CRA has classified as expenses per the T2125 Statement of Business or Professional Income, which you file with your personal taxes each year. The links are to CRA’s definition of that expense. You can deduct other expenses as will fit into your business, however, CRA may not allow it for tax purposes. For example, speeding tickets, parking fines are not allowed as a deduction for tax purposes, though in your books you can write those off as they are considered a part of doing business.

Note: the above calculations are for federal tax, every province and territory also levies an income tax. Those rates can be found here.

Whether or not you owe tax at tax time will depend on many factors, most notably what are your total income from all sources for the calendar year. It may be a good idea come December to figure out what your total income is, estimate your taxes owing, and make an instalment payment to cover the taxes rather than owe at amount at tax time.

Your Marketing Budget Needs to Include Content Marketing

By Randall Orser | Small Business

Managing a budget is probably the biggest issue that any business faces. Spend too little, and get nowhere. Spend too much and you may go bankrupt before building up a steady income. As a small business, you need to accommodate content marketing into this delicate balance act you call a budget.

Content Promotes Engagement

It’s pretty hard to talk back to a sale, however, interacting with a great article is much easier. Today’s internet is all about creating a community, and if your site is all about prices and sales, that doesn’t really encourage engagement or return business.

That’s not all though. Your content can help with interaction with industry leaders as it gives you something to talk about with them. By doing this, you increase your network and boost your reputation, following which makes your content marketing more powerful.

Affordability Compared to Other Forms of Marketing

Content marketing is much less expensive than say print or television marketing, and that’s good news for the small business. Even if you’re not making the content in-house, you’ll still save a lot as most of your expenses will be social media marketing costs. If you have an established page or website, you may not even have to spend that much.

Branding Through Great Content

Astute marketers believe that content marketing is like releasing business cards into the wild. Each video, article, or post that you put out there with your brand has a direct impression on how you and your business are recognized. Your content has to be of a consistent quality, and distributed consistently, for you to improve your brand.

As a small business, you can benefit from this. Getting noticed and respected in your industry is one of the most difficult tasks. Having well-researched and readable content can definitely help you get your foot in the door.

Lead Generation and Sales

The issue with advertising is that today’s modern customer is that they’re extremely aware when you try to just sell to them. Most consumers today just tune out your advertisement, except if they’re ready for your offering. Content marketing approaches the problem on two levels. First, a strong video or article can bring about the likelihood of your advertisement working. Second, it can replace your need for an advertisement by developing leads and sales on its own.

Content Marketing is Huge for Site Traffic

Creating your website is fairly easy. You can pay someone to do it for you (probably the better choice), with you focusing on setting guidelines. The hard part is getting people to your site. Even with great Search Engine Optimization (SEO), you may find it hard to get traffic.

This is where content marketing can help by giving viewers another opportunity to find your site. It’s not just search engine traffic, content allows your users a chance to discover you on YouTube or whatever social media site you share on. Actually, using Facebook Ads to share your content through targeted ads can gain you clicks by virtue of making users feel the content was created for them.

Are you ready to embrace content marketing? Are you wondering how it can improve your standing? There’s only one way to find out and that’s by setting aside some money in your budget for content marketing. You’ll want to get into it soon, before everyone else finds out just how valuable it can be.

Does Canada Revenue Agency Have Your Current Information?

By Randall Orser | Personal Income Tax

Yes, it’s only November, however, it is a good time to think about tax-related issues. One of those is, does Canada Revenue Agency (CRA), have your current information. That could be a new address, marital status, and more. What has happened in your life this year, that the CRA may need to know about.

Move

If you’ve moved in the year, then you should’ve informed CRA as soon as you were at your new address. Even if you signed up for online mail, you should let them know about your new address; you can do this through My Account where you get your online mail.

Why is this important? Keeping your information up to date will ensure that you keep receiving benefit payments to which you may be entitled and important correspondence from the CRA. Otherwise, your payments may stop or you may not receive important correspondence, such as your notice of assessment.

CRA will not forward your new information to other government departments, except Elections Canada if you authorized such on your tax return. Contact other departments or organizations directly to give them your new address.

Marital Status

During the year you may have gotten married, or have lived with someone for 12 consecutive months during some point in the year. In either case, you need to inform CRA as soon as your marital status changes.

This also goes for getting divorced. If your marital status changes during the year and you are entitled to any Canada child benefit (CCTB) payments, GST/HST credit, or working income tax benefit (WITB) advance payments, you must let CRA know by the end of the month after the month of your divorce. In the case of separation, do not tell CRA until you have been separated for more than 90 consecutive days.

If you changed your name, let CRA know as soon as possible. Call them at 1-800-959-8281 to update our records. CRA does not accept changes of name by email or over the Internet.

Birth of a Child

You’ve had a big event this year having a child, and you may be eligible for some tax credits from the government. The first one being the Child Tax Benefit (CTB).

To be eligible for the CCB, you have to meet all of the following conditions:

  • You must live with the child, and the child must be under 18 years of age.
  • You must be primarily responsible for the care and upbringing of the child.
  • You must be a resident of Canada for tax purposes.
  • You or your spouse or common-law partner must be:
    • a Canadian citizen
    • a permanent resident
    • a protected person
    • a temporary resident who has lived in Canada for the previous 18 months, and who has a valid permit in the 19th month
    • an Indian within the meaning of the Indian Act, if you are not a Canadian citizen

 

The Automated Benefits Application is a partnership between the Canada Revenue Agency (CRA) and the Vital Statistics Agency of the participating province. The CRA will use the information from the child's birth registration to determine your eligibility for benefits and credits.

You can use the Automated Benefits Application if all of these situations apply:

  • you are the birth mother of a newborn
  • your child is born in a participating province
  • you did not already apply using My Account or Form RC66, Canada Child Benefits Application

What you need to do

After your baby is born:

  1. Complete your child’s provincial birth registration form.
  2. Give your consent to the Vital Statistics Agency to securely share the information from your birth registration form with the CRA.
  3. Provide your social insurance number (SIN) to avoid delays.
  4. Submit your form.

We recommend that you sign up for direct deposit before your baby is born to get your payments faster.

If you use the Automated Benefits Application, do not apply any other way.

Disability

If during the year you’ve become disabled, there are tax credits you can apply for to reduce your tax burden.

Disability Tax Credit

What is the disability tax credit?

The disability tax credit (DTC) is a non-refundable tax credit that helps persons with disabilities or their supporting persons reduce the amount of income tax they may have to pay. An individual may claim the disability amount once they are eligible for the DTC. This amount includes a supplement for persons under 18 years of age at the end of the year.

The purpose of the DTC is to provide for greater tax equity by allowing some relief for disability costs, since these are unavoidable additional expenses that other taxpayers don’t have to face.

Being eligible for the DTC can open the door to other federal, provincial, or territorial programs such as the registered disability savings plan, the working income tax benefit, and the child disability benefit.

Who is eligible for the DTC?

You are eligible for the DTC only if we approve Form T2201. A medical practitioner has to fill out and certify that you have a severe and prolonged impairment and must describe its effects. Answer a few questions to find out if the person with the disability may be eligible.

If we have already told you that you are eligible, do not send another form unless the previous period of approval has ended or if we tell you that we need one. You must tell us immediately if your medical condition improves.

Disability supports deduction

Individuals who have an impairment in physical or mental functions and have paid for certain medical expenses can claim the disability supports deduction under certain conditions.

Who is eligible?

If you have an impairment in physical or mental functions, you can claim a disability supports deduction if you paid expenses that no one has claimed as medical expenses. You must have paid them so you could:

  • be employed or carry on a business (either alone or as an active partner)
  • do research or similar work for which you received a grant
  • attend a designated educational institution or a secondary school where you were enrolled in an educational program

Only the person with the impairment in physical or mental functions can claim expenses for this deduction.

Home accessibility expenses

If you became disabled and had to make adjustments to your home for your mobility and use of the home, you may be entitled to claim expenses for doing so. What renovations or expenses are eligible and ineligible?

A qualifying renovation is a renovation or alteration that is of an enduring nature and is integral to the eligible dwelling (including the land that forms part of the eligible dwelling). The renovation must:

  • allow the qualifying individual to gain access to, or to be mobile or functional within, the dwelling; or
  • reduce the risk of harm to the qualifying individual within the dwelling or in gaining access to the dwelling.

An item you buy that will not become a permanent part of your dwelling is generally not eligible.

Eligible expenses

These expenses are outlays or expenses made or incurred during the year that are directly attributable to a qualifying renovation of an eligible dwelling. The expenses must be for work performed and/or goods acquired in the tax year.

Work performed by yourself

If you do the work yourself, the eligible expenses include expenses for :

  • building materials;
  • fixtures;
  • equipment rentals;
  • building plans; and
  • permits.

However, the value of your own labour or tools cannot be claimed as eligible expenses. This includes someone who is related to you, unless they have a contracting business and are registered to GST/HST.

If you have had any changes in relation to the above, it’s best to inform the CRA as soon as possible. If you don’t and later changes are made to any credits you were receiving, then CRA will claw back any overpayments, and charge penalties and interest.

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.

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