All Posts by Randall Orser

Follow

About the Author

Bookkeeper Extraordinaire Number Crunchers® Financial Services Learn how to just say stuff it to this bookkeeping thing with our 'Just Say: "Stuff It" To Bookkeeping program.

How to File a Formal Dispute with Canada Revenue Agency (CRA)

By Randall Orser | Small Business

Enteryour text here...

You’ve just gotten back your tax notice of assessment, and notice that it’s different. Perhaps you missed something when you filed your taxes, or maybe, CRA has made an error when processing your tax return. If you disagree with an assessment, determination, or decision, you have the right to register a formal dispute.

What happens if I do not agree with the Notice I received from the CRA about my income tax or I have more information to provide?

If you have received a Notice of Assessment, Notice of Reassessment, Notice of Determination, or Notice of Redetermination and you do not think that it is correct or you have additional information for CRA to consider, please review the following Questions to determine the best course of action for you to take.

Question:
Do you want to provide the Canada Revenue Agency (CRA) with missing information for a tax return you have filed with us previously?

Action:
If so, rather than filing an objection, generally you can ask for a change to a personal tax return (T1) for a tax year ending in any of the 10 previous calendar years. For example, a request made in 2016 must relate to the 2006 or a later tax year to be considered. You will find the steps to follow and processing timeframes by visiting www.cra.gc.ca/changereturn.

You can also ask for a change to a corporate tax return (T2). You will find the steps to follow by visiting Requesting a reassessment of your T2 return.

The Voluntary Disclosures Program gives you a second chance to change a tax return you previously filed or to file a return that you should have filed. You can apply to the CRA to ask for relief of prosecution and penalties. www.cra.gc.ca/voluntarydisclosures/

Question:
Did the CRA send you an income tax assessment notice for a tax year that you had not previously filed a tax return and did you want to provide the CRA with information that may change that assessment?

Action:
If so, rather than filing an objection, you can still send your tax return to CRA. Information on how to send us your return can be found here by visiting Send us your return.

Question:
Did you submit your receipts and records to CRA and you did not receive the outcome you expected or the issue was not resolved to your satisfaction? This means, that you provided the requested information to CRA and you received your Notice of Assessment, Notice of Reassessment, Notice of Determination, or Notice of Redetermination and you think they have misinterpreted the facts or applied the law incorrectly.

Action:
You may have the right to object and submit an objection. Information about filing an objection can be found below.

Please note that if you received a request to provide information during an audit or were otherwise contacted by CRA with a request to provide additional information and you did not respond to those requests and you chose instead to provide this information as part of an objection, your information may be referred back to the original area for a second review.

Can I file an income tax objection?

You or your authorized representative can file an income tax objection if you have received any of the following:

  • Notice of Assessment;
  • Notice of Reassessment;
  • Notice of Determination; or
  • Notice of Redetermination.

You cannot file an objection to dispute the following: a Statement of Account, or a proposal letter from an auditor.

You are required to clearly explain why you disagree with the assessment or determination and also include all of the relevant facts and reasons.

The time limits for filing an objection are as follows:

If you are an individual:

  • the time limit for filing an objection is whichever of the following two dates is later:
    • one year after the date of the filing deadline for the return (April 30 or June 15), or
    • the day that is 90 days after the day of sending the Notice of Assessment (the date of the notice or notification).

If you are a business or for assessments of taxes in respect of over-contributions to a registered retirement savings plan (RRSP) or tax-free savings account (TFSA):

  • the time limit to file an objection is within 90 days of the day we sent the Notice of Assessment or Reassessment (the date of the notice or notification).

What if my objection is past the time limit?

If you did not file your objection on time because you attempted to have your change made by contacting the originating CRA office or because of circumstances beyond your control, you can apply for a time extension to file an objection. You can apply by writing to the Chief of Appeals at your Appeals Intake Centre (see Appendix B of pamphlet P148), or by using the My Account or My Business Account online services. You have to explain why you did not file your objection on time along with the facts and reasons of your objection.

The application for a time extension to file an objection must be made within one year after the expiration of the time limit to file an objection.

How do I file an income tax objection?

Here is what you provide when you file an income tax objection:

  • clear details of the issue(s) you are disputing, for example: I received a reassessment and my expenses were reduced because my receipts were disallowed. I believe that my receipts qualify as proof of my expenses because (insert reasons), and
  • any documentation to support your claim.

For an example of an income tax objection letter, see Appendix A of pamphlet P148 Resolving your dispute: Objection and appeal rights under the Income Tax Act.

You will find the steps to follow to file an objection and processing timeframes below. It is important to always provide all relevant information to CRA to allow for a complete consideration of the issue, at the assessing, audit, and objection stages.

You or your authorized representative can file an objection in one of the following ways:

In all cases, you should clearly explain why you disagree and include all relevant facts, reasons, and supporting documents.

Filing an objection to a notice of assessment or (re)assessment is your right, and you should take advantage of such if you feel the assessment is incorrect. Make sure you have all the documents you need to support your appeal, and that you have explained all the circumstances that apply to said appeal. In the end, CRA is reasonable and usually an appeal does get you some satisfaction, and at least a better understanding of why your claim was originally denied.

Kill Your Dream Faster with These Five Mistakes

By Randall Orser | Small Business

How many dreams die because of a mistake? As an entrepreneur, you’re going to make mistakes, maybe learn from them, however, you don’t have to be learning from mistakes. Yes, you remember better from mistakes, but you can learn better without having to throw away months of hard work.

Forgetting Profit

Emotional rewards abound from starting a business. Being the boss of the whole thing is a great freedom, and isn’t that why you started in the first place. As Harry Truman said, ‘The buck stops here’, and that’s a great feeling. Your emotional rewards are definitely important, however, don’t get stuck on those alone as you can’t survive on joy and contentment.

Not taking into account profit of your business, can kill your dreams faster than anything. Wanting more out of your business than profit is great, and that emotional connection is needed. That said, you’ll doom the business if it’s not making money (profit). You need a business plan that helps you make money, so you can run your business, and sell your product or service.

Doing it all Yourself

A business is a many armed beast, you can’t do it all, and can’t be everywhere. Let’s face it, we all have our weaknesses, and need to think where we fall down. Are you good at marketing? What about the numbers side of things? Figure out your weaknesses find people to work them, do what you can’t and be where you’re unable. Delegation is a big key to running a successful business, otherwise you’ll kill it.

Is your venture meant to expand? Not all are, depending on your offering, or your desires. In such a case, doing it all may be okay, if you’re going to stay small.

Misjudging Demand

As an entrepreneur, you probably understand if no one buys, you don’t make money, but that’s as far as your understanding may go. Many businesses get caught up on one person buying, which proves that someone wants it, but a successful company is not made on one client.

As an entrepreneur, misjudging the number of prospective clients is the biggest mistake you can make. That’s more than just miscalculating future revenue; it’s misunderstanding your businesses viability. Once you have your product or service idea, think about your ideal client who’d buy it before even producing said product or service. You don’t want to waste time or resources because you had to change direction halfway. Think about pre-selling or crowdfunding as a way to get interest, and have some startup money.

No Unique Selling Proposition

A great product is pointless, and not a determining factor in your businesses success. Competition is fierce nowadays, and doing the same thing as you, so to get your market’s attention you need a Unique Selling Proposition (UPS), which shows how your product or service is unique from everyone else’s. You need on for each product or service you sell. Apple and Samsung are good examples. Their smartphones have comparable performance, but different in the apps available, how their app stores are setup, to how they work with other devices. Apple’s real difference is their ecosystem, which most others don’t have.

The days of jumping into an industry, and putting out your product or service are gone. You need something to urge customers to leave their existing supplier and come over to you. You can’t compete if you don’t have something unique to offer. That could be something as simple as a pickup service or drop off service.

Your Accounting Sucks

Everything has a cost. Especially when it comes to finding a business location, as you may have to focus on one area over another, or be home-based at the start. Money & time are one of the more literal and direct costs of your business. Under-funding is one of the biggest startup killers. Remember, if you don’t have money you can’t work your business.

You need room to breathe, whether it’s your plan, or your estimates. More than likely, it’ll take longer than expected, and cost more than you thought. Keep yourself safe by overestimating (being conservative).

Entrepreneurship is risky, even if it’s done perfectly. You may be strong in your way, but some errors will kill your business. You don’t need to see your business crash and burn to learn from those mistakes. Do your due diligence before you start, and you’ll succeed.

Home Accessibility Expenses 

By Randall Orser | Small Business

For the 2016 tax year, the government added Home Accessibility Expenses. This a non-refundable tax credit for those expenses you incurred to make your home more accessible for yourself, or a spouse, a parent, or a child that you care for. Whomever the expenses are incurred for, they must either qualify for the Disability Tax Credit, or be over 65 years of age. This being a non-refundable tax credit, it must be used in the year the expenses are incurred, and cannot be carried forward.

Are you eligible?

You can claim an amount for the eligible expenses for a qualifying renovation of an eligible dwelling, if:

  • you are a qualifying individual; or
  • an eligible individual making a claim for a qualifying individual.

A qualifying individual is:

  • an individual who is eligible for the disability tax credit for the year; or
  • an individual who is 65 years of age or older at the end of a year.

An eligible individual is:

  1. a spouse or common-law partner of a qualifying individual; or
  2. for a qualifying individual who is 65 years of age or older, an individual who has claimed the amount for an eligible dependent (line 305), caregiver amount (line 315) or amount for infirm dependents age 18 or older (line 306) for the qualifying individual, or could have claimed such an amount if:
    • the qualifying individual had no income;
    • for the eligible dependent amount, the individual was not married or in a common-law partnership; and
    • for the amount for an infirm dependent age 18 or older, the qualifying individual was dependent on the individual because of mental or physical infirmity.

OR

  1. If (2) does not apply, an individual who is entitled to claim the disability amount for the qualifying individual or would be entitled if no amount was claimed for the year by the qualifying individual or the qualifying individual's spouse or common-law partner.

Do you have an eligible dwelling?

An eligible dwelling is a housing unit (or a share of the capital stock of a co-operative housing corporation that was acquired for the sole purpose of acquiring the right to inhabit the housing unit owned by the corporation) located in Canada and meets at least one of the following conditions:

  • it is owned (either jointly or otherwise) by the qualifying individual and it is ordinarily inhabited (or is expected to be ordinarily inhabited) in the year by the qualifying individual, or
  • it is owned (either jointly or otherwise) by the eligible individual and is ordinarily inhabited (or is expected to be ordinarily inhabited) in the year by the eligible individual and the qualifying individual, and the qualifying individual does not throughout the year own (either jointly or otherwise) and ordinarily inhabit another housing unit in Canada.

Generally, the land on which the housing unit stands, up to ½ hectare (1.24 acres), will be considered part of the eligible dwelling.

A qualifying individual may have only one eligible dwelling at any time, but may have more than one eligible dwelling in a year (for example, in a situation where an individual move in the year). When a qualifying individual has more than one eligible dwelling in a year, the total eligible expenses for all such eligible dwellings of the qualifying individual cannot be more than $10,000.

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.

Work performed by a family member

Expenses are not eligible if the goods or services are provided by a person related to the qualifying individual or the eligible individual, unless that person is registered for goods and services tax/harmonized sales tax (GST/HST) under the Excise Tax Act. If your family member is registered for GST/HST and if all other conditions are met, the expenses will be eligible.

Work performed by professionals

Generally, paid work done by professionals such as electricians, plumbers, carpenters and architects for eligible expenses qualifies. If you're planning on hiring a contractor to do construction, renovation, or repair work on your home, the Get it in writing! website has information that will help you.

Ineligible expenses

The following expenses will not be eligible:

  • amounts paid to acquire a property that can be used independently of the qualifying renovation;
  • the cost of annual, recurring, or routine repair or maintenance;
  • amounts paid for household appliances;
  • amounts paid for electronic home-entertainment devices;
  • the cost of housekeeping, security monitoring, gardening, outdoor maintenance, or similar services;
  • financing costs for the qualifying renovation; and
  • the cost of renovation incurred mainly to increase or maintain the value of the dwelling.

Other factors to consider

Medical expense tax credit (METC)

You may have an eligible expense that also qualifies as a medical expense. If so, you can claim the expense as a medical expense and a home accessibility expense.

Condominium and co-operative housing corporations

For condominium or co-operative housing corporations, your share of the cost of eligible expenses for common areas qualifies.

Other government grants or credits

The expenses are not reduced by assistance from the federal or a provincial government, including a grant, forgivable loan, or tax credit.

Vendor rebates or incentives

Eligible expenses are generally not reduced by reasonable rebates or incentives offered by the vendor or manufacturer of goods or the provider of the service.

Business and/or rental use of part of an eligible dwelling

If you earn business or rental income from part of an eligible dwelling, you can only claim the amount for eligible expenses incurred for the personal-use areas of your dwelling.

For expenses incurred and/or goods acquired for common areas or that benefit the housing unit as a whole (such as a ramp or hand rails), you must divide the expense between personal use and income-earning use.

Completing your tax return

To claim home accessibility expenses complete Schedule 12, Home accessibility expenses, and report the amount from line 4 of Schedule 12 on line 398 of Schedule 1, Federal Tax.

A maximum of $10,000 per year in eligible expenses can be claimed for a qualifying individual. When there is more than one qualifying individual for an eligible dwelling, the total eligible expenses cannot be more than $10,000 for the dwelling. The claim can be split between the qualifying individual and the eligible individual(s) for the qualifying individual. If the claimants cannot agree to what portion each can claim, the Canada Revenue Agency (CRA) will determine the portions.

Supporting documents

Eligible expenses must be supported by acceptable documentation, such as agreements, invoices, and receipts. They must clearly identify the type and quantity of goods bought or services provided, including, but not limited to, the following information, as applicable:

  • information that clearly identifies the vendor/contractor, their business address, and, if applicable, the GST/HST registration number;
  • a description of the goods and the date when the goods were bought;
  • the date when the goods were delivered (keep your delivery slip as proof) and/or when the work or services were performed;
  • a description of the work done, including the address where it was done;
  • the amount of the invoice;
  • proof of payment. Receipts or invoices must show that bills were paid in full or be accompanied by other proof of payment, such as a credit card slip or cancelled cheque; and
  • a statement from a co-operative housing corporation or condominium corporation (or, for civil law, a syndicate of co-owners) signed by an authorized individual identifying:
    • the amounts incurred for the renovation or the alteration work;
    • as a condominium owner, your part of these expenses if the work is done on common areas;
    • information that clearly identifies the vendor/contractor, their business address and, if applicable, their GST/HST registration number; and
    • a description of the work or services done and the dates when the work or services were done.

The Home Accessibility Expenses credit can give you a bit of tax relief if you’ve had to make your home more accessible for yourself or a dependent. Even if you’ve gotten federal or provincial assistance, you can still claim the expenses for this credit.

Seven Things to Stop Doing Now to be More Productive

By Randall Orser | Small Business

I’m sure you have begun to realize just how much you are standing in your own way of being successful. Do you want to be successful? Then you need to just get out of your own way. It won’t be easy; however, you need to if you want your startup to last more than a year. Here are seven things to stop doing now to be more productive.

Not Preparing Enough

Flying by the seat of your pants definitely doesn’t work when it comes to your business. Your business will flourish because of a skill set that includes skill, smarts, luck, and preparation. You’ll be in trouble if you try to skip out one of them. You can develop your skill and smarts, though luck is beyond your control. You won’t falter if you are prepared, so preparation is key.

Preparation is about being informed, having a plan for various actions (positive and negative). You’re much better to plan for the uncertain, not need them, than to need a plan and not have one.

Procrastination

There are many joyful things in running your business, however, don’t overlook the boring bits. You don’t want to leave those boring bits to last, or for another day, just to get to the fun. You’ll just have to do them anyway, and may have to rush to get them done. Get those things done as soon as possible, as Nike says, ‘Just Do It’.

Are You Ready?

Even if you’re not, don’t worry about it. You’re never really ready for a lot of stuff, such as parenting, school, or running a business. Your business is a test you’ve probably never had prior experience. You may have had a business before, however, each new business has a different set of circumstances. You’re much better to centre on what needs to get done, rather than how unready you may be.

Being a Perfectionist

Striving for perfection is all well and good; however, if you resolve only for perfection then that’s when it all goes bad. Remember there’s no such thing as perfect. You may have times where the stars align, and it just feels right, but something will go astray. Don’t wait for things to be completely faultless. Figure out what needs to get done, and get on with it with what you have. As Dan Kennedy (marketing guru) says, ‘Good is good enough’.

Thinking Things Will Work Out on Their Own

If you think you’re going to succeed by doing nothing most of the time, then think again. You need to work for your business, nothing will just jump into your hands. You are owed nothing, and there’s plenty of people out their hustling day and night to get ahead. A successful startup is achieved by those who put feet to pavement, and get things done.

Constantly Comparing Yourself to Others

Always be looking at your competition as you can get a good idea of how you compare to where you are and where you should be. You can take it too far by dwelling on victories you should have achieved; that’s just privilege. Your competition took a different path than yours, got there through hard work, and you must do the same. Focus ahead, not behind or to the side.

Superfluous Purchasing

Your business runs on money, and it the basis for you being able to do the things needed. Whatever you spend money on, it needs to be about improving the company. Buying things that aren’t necessary is a waste of money, and you’ve just lost focus on what’s important. Is buying that new swanky computer really worth it? If it doesn’t improve productivity, then don’t. You need to look at every purchase before signing off on it.

You need to have the wherewithal to run your business so it can be dependable and tough. Your business won’t last with wasteful purchases, or you take months to complete anything as it needs to be perfect. You can become a successful entrepreneur, you may just need to change yourself.

Child Care Expenses

By Randall Orser | Personal Income Tax

You decided to have kids, and while your taxes weren’t in the thought process at the time, you may as well benefit tax wise from them now.

What are child care expenses?

Child care expenses are amounts you or another person paid to have someone look after an eligible child so that you or the other person could:

  • earn income from employment;
  • carry on a business either alone or as an active partner;
  • attend school under the conditions identified under Educational program; or
  • carry on research or similar work, for which you or the other person received a grant.

The child must have lived with you or the other person when the expense was incurred for the expense to qualify. Usually, you can only deduct payments for services provided in Canada by a Canadian resident.

Who can claim child care expenses?

If you are the only person supporting the eligible child, you can claim child care expenses you incurred while the eligible child was living with you. Fill out parts A and B, and, if it applies, Part D of Form T778, Child Care Expenses Deduction.

There may have been another person who lived with you at any time in 2016 and at any time during the first 60 days of 2017 who was: the eligible child's parent; your spouse or common-law partner, if you are the father or the mother of the eligible child; or an individual claiming an amount for the eligible child on line 305, 306, 315, or 367 of their Schedule 1, Federal Tax.

In this situation, the person with the lower net income (including zero income) must fill out parts A and B and claim the child care expenses unless one of the situations in Part C or D applies.

If any of the situations in Part C or Part D apply, the child care expenses can be claimed by the person with the higher net income, or in part by both the person with the higher net income and the person with the lower net income. In this situation, the person with the higher net income must calculate the claim first. However, you must each fill out a separate Form T778, and fill out parts A and B, and, if it applies, parts C and D.

If both of you have equal net incomes, you have to agree on which one of you will claim the child care expenses.

If you got married or became a common-law partner in 2016, you and your spouse or common-law partner have to consider your net incomes for the whole year. Include child care expenses you both paid for the whole year.

For whom can you claim child care expenses?

Child care expenses can only be claimed for an eligible child.

An eligible child is: your or your spouse's or common-law partner's child; or a child who was dependent on you or your spouse or common-law partner, and whose net income in 2016 was $11,474 or less.

The child must have been under 16 years of age at some time in the year. However, the age limit does not apply if the child was mentally or physically infirm and dependent on you or your spouse or common-law partner.

What payments can you claim?

You can claim child care expenses that were incurred for services provided in 2016. These include payments made to:

  • caregivers providing child care services;
  • day nursery schools and daycare centres;
  • educational institutions, for the part of the fees that relate to child care services;
  • day camps and day sports schools where the primary goal of the camp is to care for children (an institution offering a sports study program is not a sports school); or
  • boarding schools, overnight sports schools, or camps where lodging is involved (read the note in Part A of Form T778, Child Care Expenses Deduction).

The above is not an exhaustive list of deductible child care expenses. For example, advertising expenses and placement agency fees incurred to locate a child care provider and mandatory registration fees may also qualify as child care expenses.

When the child care services are provided by an individual, the individual cannot be:

  • the eligible child's father or mother;
  • another person;
  • a person for whom you or another person claimed an amount on line 305, 306, 315, or 367 of Schedule 1, Federal Tax; or
  • a person under 18 years of age who is related to you.

A person is related to you if he or she is connected to you by a blood relationship, marriage or common-law partnership, or adoption. For example, your brother, sister, brother-in-law, sister-in-law, and your or your spouse's or common-law partner's child are related to you. However, your niece, nephew, aunt, and uncle are not.

What payments you cannot claim?

You cannot claim payments for:

  • medical or hospital care, clothing, or transportation costs;
  • fees that relate to education costs at an educational institution, such as tuition fees of a regular program or a sports study program; and
  • fees for leisure or recreational activities, such as tennis lessons or the annual registration for Scouts.

You cannot claim expenses for which you or another person received, or is entitled to receive, a reimbursement of the child care expenses or any other form of assistance not included in income. This includes, for example, the hiring credit for small business and small business job credit received under the Employment Insurance Act. If your employer paid the child care expenses on your behalf, you can claim the part of the expenses included in your income for the year.

Completing your tax return

Use Form T778, Child Care Expenses Deduction, to calculate your allowable amount of child care expenses. Enter on line 214 of your return the amount that you can claim.

The individual or organization who received the payments must give you a receipt showing information about the services provided. When the child care services are provided by an individual, you will need the social insurance number of the individual. The receipt can be in your name or that of your spouse or common-law partner.

You cannot carry forward unclaimed expenses to another year.

How to get being an Entrepreneur Right

By Randall Orser | Small Business

You’re ready to rock the business world with your entrepreneurial spirit, but ‘Houston, we have a problem.’ As you rush from idea to action, things go astray. Too many entrepreneurs are concerned with what they want, and end up overlooking what they need to do. As an entrepreneur, it’s not just about coming up with great ideas, it’s acting on them properly. Here are some points about where the entrepreneur goes wrong and ruins the dream.

That Work/Life Balance Thingy

Think of your startup like a new baby, it’ll take up most of your time. It’ll be an exacting creature that both wants and needs your attention at every moment. It’s something that’ll occupy your mindscape, even when not working on it, and take away your weekends. You’re going to be tempted to put off your social and personal life, and focus on your business.

The minute you put off rest and your social life, the burnout starts taking over, and you fail. Can you create a balance between your work and life? Of course. You’ll always feel on or the other is deprived, however, that’s the cost of being a juggler.

Continuously Revamp on Your Idea

You’ve got your great idea, and are ready to roll; however, it doesn’t stop now. You, like many entrepreneurs, will launch and then completely concentrate on running the business, leaving the core idea untouched. You need to have focus when you launch your idea, however, leaving the idea in its original configuration could be a mistake.

You think of your idea and your new business like your baby, and like a baby it needs to grow, develop along with the needs of the market. Ideas flow like water, and you shouldn’t be afraid of running out of them; the more experience you get and have in your industry, the more they flow.

As Cold as Ice

As an entrepreneur, there are times where you need to take a step back from a distance, and look at the situation in a detached manner. You need to be as cold as ice sometimes, especially when it comes to your numbers and the money. Your feelings shouldn’t blind you to the proper decision; however, keep your coldness in check.

The main ingredient of a good startup is passion. With the odds so stacked against you, you need that fire in your soul in order to keep going even when it feels like you’re losing. Cultivate your passion you have for your startup; just know when to curb that enthusiasm.

Build the Momentum

Think of your new business as a rock rolling downhill gathering motion, so don’t let it falter. As soon as you hesitate, or lose focus, your momentum slows, as your startup is pretty much stagnant. In larger companies, that stagnation could be a fiscal quarter that sucked. For your startup, it may be as short as a week.

Building your startups momentum does require focus and good management. Don’t get stuck on one task, use delegation as much as possible. Do your best not to focus on anything that doesn’t improve the business or have a direct benefit.

Ambition is Lacking in This One

Many people face a lack of ambition, and that’s a big problem. You’ll never stand up to the big challenges and take the risks on big opportunities, unless you feel like you’re building up to something bigger. You need to have a greater goal to what you’re doing.

For you, that may be as simple as getting your name out there, and your brand a household name. Others, may need to protect their family’s financial future. You need to go down deep inside, and consider why you’re doing this.

You have your dream, and it can be a reality, though it’s not easy, however, not entirely impossible. You need the right mindset and an approach to do it successfully. Do it right from the start, and you’ll manage the transition well.

As a Student, Do I Have to File a Tax Return? 

By Randall Orser | Personal Income Tax

You’ve ventured out into the world of post-secondary education, and have a lot going on. Taxes are not something you’re thinking about, and besides, you don’t have any income, or other reason to file a return. Or do you?

Most income you receive is taxable and you have to include it on your return. However, you do not have to include your GST/HST credit, Canada child tax benefit payments, or related provincial or territorial program payments, lottery winnings, or most gifts and inheritances.

The most common forms of income are: employment income (T4 or T4A); income not showing up on a T4 (tips, gratuities); scholarships, fellowships, bursaries, study grants, and artists’ project grants (awards); net research grants; apprenticeship incentive or completion grants; RESP withdrawals; interest and other investment income.

There are other reasons to file a tax return, you may have a refund, you or your spouse may want to get the GST/HST credits, you or your spouse may qualify for child tax benefits, and more.

Tuition/Education Credits

You still need to file a tax return as you have to claim your tuition, education, and textbook amounts first on your own return, even if someone else paid your fees. The amount you must use on your own tax return is equal to the amount of credit required to reduce the taxes you owe. The calculation for this amount is included on Schedule 11.

Even if you have no tax to pay and you are transferring part of your tuition, education, and textbook amounts, file your return and a completed Schedule 11 so we can update our records with your unused tuition, education, and textbook amounts available to carry forward to other years.

If you are transferring an amount to a designated individual, only transfer the amount this person can use. This way, you can carry forward as much as possible to use in a future year.

You may transfer a maximum of $5,000, minus the amount you used to reduce your tax owing as calculated on Schedule 11. You can transfer all or some to your spouse or common-law partner (who would claim it on line 360 of his or her Schedule 2) or to your or your spouse's or common-law partner's parent or grandparent (who would claim it on line 324 of his or her Schedule 1).

Depending on their province or territory of residence, your spouse or common-law partner may have to complete Schedule (S2) to calculate their provincial or territorial transfer amounts.

Which tax package should you use?

Generally, you have to use the package for the province or territory where you resided on December 31. If you were living in a province or territory other than the one you usually reside in, use the package for your usual province or territory of residence. For example, if you usually reside in Ontario, but you were going to school in Alberta, you would use the package for Ontario.

If you resided in Quebec on December 31, use the package for residents of Quebec to calculate your federal tax only. You will also need to file a provincial income tax return for Quebec.

As you can see there are many reasons to file a tax return, even if you have no, or little, income. There are many credits you will get as a result of filing a tax return, and you don’t want to miss out on free money, now do we.

Seven Tips to Save on Your Taxes for Authors

By Randall Orser | Business Income Taxes

Way before tax times approaches, you should be gathering up your business-related expenses. What qualifies as a business-related expense? Here’s some great ones for authors.

Home is where the writing is

Where do you write? Most authors write at home, and have a space reserved for that purpose. Whether you rent or own, if you use a part of your home exclusively and regularly for the business of writing then you may be able to write off expenses that relate to the space.

Round up your gas, hydroelectricity, house insurance, maintenance (house cleaning, landscaping, etc.), mortgage interest, property taxes and city utilities, strata fees, rent. It’s best to review these with your tax advisor, and that you get the right percentage of use. Remember you need to measure the square footage of the room, and determine your home’s total square footage.

Pens and Paper Aplenty

All those office store receipts add up after a while, and you may as well use them. Your office equipment and materials that include desks, cabinets, chairs, lighting, computer and software, printers, ink, paper, pens, and other supplies.

Ding-a-ling May Be Deductible

Your cell phone or landline may be considered a business expense. You should show that the phone is used normally for business. Canada Revenue Agency seems to allow 100% of cell phone bills to be written off (at least your portion, if it’s a family plan). If your business conducts interviews, you can keep a log of the date, length, ad purpose of such calls. Of course, in today’s smartphone era, you probably use the cell to email clients, take notes, draft story outlines, or do research. Your tax advisor can help you figure out the correct deduction amounts for your phone usage, devices, service and repair charges.

Surfing Could Mean Savings

Every household pretty much has the internet these days, and you’re more than likely using it for your business. You’re probably using it for email, website, video conferencing clients, existing and new ones, doing research and fact-checking. These days it’s social media and promoting your business. Many people get their inspiration from the internet. Ideally, if you want to write off your internet service, it should be in the businesses name; you’ll pay more for it, however, CRA likes to see this.

Subscribe Your Way to Savings

Do you belong to professional organizations? How about magazines and other publications, even websites you subscribe to on a monthly basis? Associations would include ones to power up your writing, or learn more on a certain subject you’re writing about, online access to the AP Stylebook, newspapers, and more.

Fly the Friendly Skies to a Tax Write-off

Travel writers aren’t the only ones who can claim travel as a deduction. Any travel that you do may qualify for a deduction, if it gets you somewhere that’s business related. That professional conference, or event you covered, or client you met would all qualify for the travel deduction; remember parking and tolls. As for a car, if it’s a rental car then you just write off that as a travel expense. If it’s your personal car, then you must keep your mileage and all your receipts; unless you’re a corporation, then you can pay yourself per kilometer.

Your Content Creation and Business Expenses Could be Related

The content you create for clients, could lead to deductions for your business. Are you a movie or theatre reviewer? The cost of those tickets would be a write-off. A graphic designer that creates marketing materials for a beauty brand, anything purchased to better understand the user experience could qualify too. Look at the content you created over the past year, and the products or services you purchased to create that content. Your professional tax advisor should be able to give you great advice on what you can and cannot write-off.

If you want to reduce your taxable income, then look at your home office, cell phone, internet plan, dues and subscriptions, travel and the content you create. For a little bit of record keeping, and advice from a tax advisor, you can keep more money, and give less to the government.

Donations and gifts – CRA

By Randall Orser | Personal Income Tax

If you or your spouse or common-law partner made a gift of money or other property to certain institutions, you may be able to claim a federal and provincial or territorial non-refundable tax credit when you file your return. Generally, you can claim all or part of this amount, up to the limit of 75% of your net income.

What is the eligible amount of my gift?

In most cases, the eligible amount of your gift is the amount shown on your charitable donation receipt.

In most cases, the eligible amount of your gift is the amount shown on your charitable donation receipt.

However, in more technical terms, the eligible amount of the gift is the amount by which the fair market value of the gifted property exceeds the amount of an advantage, if any, received or receivable for the gift.

The advantage is generally the total value of any property, service, compensation, use or any other benefit that you are entitled to as partial consideration for, or in gratitude for, the gift. The advantage may be contingent or receivable in the future, either to you or a person or partnership not dealing at arm's length with you.

Example

You donate $1,000 to the Anytown Ballet Company, which is a registered charity. In gratitude, the company provides you with three tickets to a show that are valued at $150. You are therefore considered to have received an advantage of $150. The eligible amount of the gift is $850 ($1,000 − $150).

The advantage also includes any limited-recourse debt in respect of the gift at the time it was made. For example, there may be a limited recourse debt if the property was acquired as part of a gifting arrangement that is a tax shelter. In this case, the eligible amount of the gift will be reported in box 13 of Form T5003, Statement of Tax Shelter Information. For more information on tax shelters and gifting arrangements, see Guide T4068, Guide for the Partnership Information Return (T5013 Forms).

There are situations in which the eligible amount may be deemed to be nil. For more information, see the sections called "Deemed fair market value" and "Official donation receipts" in Pamphlet P113, Gifts and Income Tax.

Profit from Your Competitor’s Decline 

By Randall Orser | Small Business

Do you feel that your competitors are there to just steal your clients? Change your thinking and use your competitors to your advantage. Blow away your competition in your market by using the following three ways to profit from your competitor’s decline.

What do your potential customers want?

You probably have a good grasp of what your existing customers want, however, it’s important to learn what your future customers want. How do you go about that? Check out the competition’s social media sites, and see what their customers are commenting, and what they favour about the products or services of that competitor. Then implement some of these ideas in your business, at least those that fit into your brand. Of course, don’t contact them directly on the competitor’s sites, however, do invite them to subscribe to your business page or other site, maybe your newsletter.

Can you pick up where the competitor left off?

Look at the negative comments on the competitor’s sites as well. What issues are coming up in those comments? Is there an area of the competitor’s business that people are having a tough time with? Then make sure your business isn’t having the same issues. This gives you a double whammy, being able to fix the competitor’s customers issues, and having your own customers see an improvement even if they didn’t realize it was there. That said, be careful not to scare your current customers away with any change. If you think a change may be an issue with existing customers, use a poll, survey, or just ask them outright to find out how they would feel about said change. If one of those won’t work, then do some exploration of other businesses have done this change with any level of success. Your existing customers are important, and it’s far better to keep them happy than changing something just to get new customers.

What’s Your Angle?

Stand out from your competition by focusing on those things that you do best. Always look at your competitors and what they do best, then figure out a better or different angle to exceed them. For customers looking for something a little different, this would be a good draw for them. In order to stand out from the competition, do what you do best, however, have something the competition doesn’t. You’ll not only gain new customers, but they have grounds to stay loyal.

Business is all about being known for something. The best way to figure out that ‘known’ is to check out the competition. Grow your business and keep your customers happy by using your competitor’s strengths and weaknesses. Start learning to profit from your competitors decline, and you’ll feel less like your competitors are in your way.