As an employer, you must make deductions on amount you pay to your employees. After you’ve made these deductions, you have to remit them, plus your share, to Canada Revenue Agency (CRA). You must file those deductions either electronically via online banking, at the bank or mail using the form PD7A.

Where Do You Start?

If this is your first employee, then you must sign up for a payroll account with CRA. If you already have a business number then your payroll account number is your nine-digit business number followed by RP0001 (RP designates this as a payroll account). You have to register for a payroll account before the first remittance due date. Your first remittance due date is the 15th day of the month following the month in which you began withholding deductions from your employee’s pay. If you didn’t open an account before hiring employees, you still need to calculate deductions and remit them by the due date.  If you fail to deduct or you remit late, you may be assessed a penalty.

The easiest way to open a payroll account is to call CRA at 1-800-959-5525. Have your business number, company information and your information handy when you call.

Paying Employees

For every new employee you hire, you are supposed to get them to fill out a TD1Personal Tax Credits Return. The TD1 is used to determine the amount of tax to be deducted from an employee’s employment income. The TD1 also gets the employee’s personal information, such as Social Insurance Number, birthdate, etc.

There are two forms, one for Federal and the other for the Province/Territory where employed. You do not have to send this TD1 to CRA, though you should keep a copy in the employee’s file. The employee only needs to fill out a TD1 again, if there is a change to their entitlements to their personal tax credits amounts.

If your employee has more than one employer or payer at the same time and has already claimed personal tax credit amounts on another TD1 form, he or she cannot claim them again. If his or her total income from all sources will be more than the personal tax credits claimed on another TD1 form, he or she must check the box on the back of the TD1 form ‘More than one employer or payer at the same time’, enter “0″ on line 13 on the front page and should not complete lines 2 to 12.

Now you have to decide how often you will pay your employee(s). The standard pay periods are bi-weekly (every 2 weeks) and semi-monthly (twice per month either the 1^st & 15^th or 15^th & End-of-month). You need to check your provinces employment standards as to how often you pay employees. In British Columbia, you must pay employees twice per month, a pay period cannot be longer than 16 days, and employees must be paid within 8 days after the pay period ends. If you wish to pay an advance to an employee during the month, you are required to make deductions from that advance.

The best pay period, in my opinion, is every two weeks for hourly employees as then you can cut off on a Saturday and then pay the following week (usually Friday). Semi-monthly pay periods work best for salaried employees

Making Deductions

The deductions you must make from an employees pay are Canada Pension Plan (CPP), Employment Insurance (EI), and income tax. CPP is currently 4.95% of wages after a $3500 exemption and up to a maximum $2356.20. The employer portion is the same as the employees $2356.20. Employment Insurance is 1.88% to a maximum of $891.12. The employer portion is 1.4 times the employee portion to $1247.57 maximum. Income tax will be based on the employee’s basic personal exemptions, CPP & EI, and other factors.

You must give the employee a pay slip, which states:

• Hours worked and the rate/hour; unless salaried
• Deductions taken off and the amount; CPP, EI, Income Tax
• Taxable benefits added to income
• Year-to-date amounts

Do not put the employees Social Insurance Number on the cheque or paystub.

Making Your Remittance

Generally, you’re remittance is due by the 15^th of the month following their withholding. Some larger employers must make remittances more often, but you, more than likely, fit into the 15^th category.

CRA prefers if you file your payroll remittance electronically, and will probably make it mandatory in a few years. If you file via online banking, you have to set-up CRA as a payee and then you would follow the directions as per your bank to submit and pay. If you are sending a cheque or paying at the bank you need a PD7A, fill out the form with the total CPP, EI & Income tax deducted, the total remittance, the gross payroll (before deductions), number of employees and the period (Month/Year).

Example:

Mary, located in British Columbia, has one employee paying her $1,250 twice a month. The amounts are: CPP $54.66, EI $23.50 & Tax $136.16 for a total of $214.32 and a net of $1035.68. Here’s Mary’s remittance the following month:

Gross Payroll             $2,500.00       ($1,250 x 2)

CPP                                   218.64      ($54.66 x 2 (2 payrolls) = $109.32 x 2 (employer portion)

EI                                       112.80      ($23.50 x 2.4 (employer portion) = $56.40 x 2 (2 payrolls)

TAX                                   272.32      ($136.16 x 2 payrolls)

Total Remittance       $    603.76

Mary must make this remittance every month as long as the employee is working for her.

Payroll is a serious business and the monies deducted are considered in trust for the employee, so you must make sure that you remit them on time and every time. You will be held personally liable for any amounts you do not pay the CRA, even if you are an incorporated company. I find it best to use software or CRA’s online payroll calculator, that way you ensure you’re making the correct deductions.

The post How Does Payroll Work? appeared first on Number Crunchers.

Luck, pluck and determination along the way may not be enough. Capital is also important and if you do not have enough money on hand, your days as an entrepreneur may be short-lived. Here’s how cash can help your small business out, money that can carry you through those tough financial times.

Do This Now

Before you hang out your “open for business” sign, you must assess how much money you have on hand. These days, few businesses can get started without sufficient capital in place.

The amount of money you will need can vary depending on your overhead, but plan to set aside anywhere from a few months to a year’s worth of funds to cover your expenses. A cash cushion will enable you to concentrate on running your business without worrying about its often erratic cash flow.

Ask For Support

If your cash cushion is limited, you may want to approach family members and friends for support. Know that the people that are close to you are the ones that know you most, therefore your personal character will determine whether you receive money from them or not.

You may have to sell your family on what you are planning to do. This can be more difficult to carry out if your idea is a rough concept without a clearly delineated path that shows how you will earn money. Write out a business plan to show how your business will work and what money you expect to make during the first year. A business plan may be just as much an eye opener for you as it can be for your familial lenders.

Trim Your Overhead

Have you been living a lavish lifestyle? Perhaps not, but there may be ways for you to cut your personal or nonbusiness expenditures to help fund your enterprise. That cutting may come easier if you are busy working long hours anyway.

Areas to cut out include your cable connection, a second car, eating out and even funding your retirement account. Sure, you need to plan for the future, but putting your future plans on hold until after your business is strong may be a sensible approach here.

Seek Out Investors

Some business ideas are so unusual that neither your family nor your bank will be interested in supporting you. Then again, there are investors who might be willing to provide seed money if your idea has the potential for making them money.

Investors are a skeptical lot, individuals that have heard, seen and experienced a number of different business opportunities. They are not entirely risk adverse either; no investor will back a shoddy business idea and you cannot expect that your pitch will automatically be accepted.

When approaching investors, expect to provide a bulletproof business plan. Then, expect to defend your plan against questions you might not have seen coming. If you are approved for seed money, you may have to cede a share in the business to get it started. That is the price you may have to pay for relying upon outside funding.

Business Money Matters

Are you afraid to launch your business now? A little fear can be a good thing, especially if it causes you to examine areas you did not look at previously. Business money matters are no laughing matter, and without proper planning the joke just might be on you.

The post Cash Tips For Small Business Owners appeared first on Number Crunchers.

Everything about running a business together cuts both ways – it could strengthen your relationship or strain it to breaking point. It depends on the way the two partners are made up.

Think of how a couple that builds something together could end up feeling great about their partnership. Both success and shared hardship could conceivably bring the couple closer together. Shared hardship of the financial kind, though, tends to break many couples apart – even when they aren’t additionally stressed by a business. It depends on how one thinks.

Working couples often have a tough time scheduling any time together at all. This isn’t a problem for couples that build a business together, though. They are their own bosses and they have tremendous flexibility in scheduling their day. The downside is that to some couples, constantly being with each other can be stressful. Flexibility can also be a bad thing for couples who haven’t figured out how to live together.

While working together as partners in business can strengthen a relationship wonderfully, it can only work when the partners don’t struggle for power. It’s very common in husband-wife business teams for one half of the partnership to constantly want to be the boss. A constant power struggle can send both a marriage and a business downhill quickly.

A successful marriage/business partnership could work if you work at it

Define your roles – Businesses do much better when the parties involved create very clear responsibility profiles. When the partners in a business don’t step on each other’s toes, there are usually fewer reasons to fight. Well-defined roles and responsibilities are especially important when married partners try to run a business together.

Define a work-life balance – The kind of time you devote to your business needs to be a joint decision. If one part of the partnership strongly believes that it makes no sense to work after 6 PM and the other believes that neatly laid out time is no way to make a success of the startup, there isn’t much chance that it could work without a fight.

Don’t forget that you’re a team – While it may seem like going in as a married couple guarantees that you get to work as a team, it doesn’t usually turn out to be a simple deal. Being in business together somehow makes people want to outdo one another. Couple-businesses get to be successful only if they grasp the idea that it always has to be them against the world and not against each other.

Many marriage problems are nebulous in nature. It can be hard to decide who is right or wrong. Joint business decisions, though, are not nebulous things. They involve numbers and clearly defined results. Running a business together can help couples sort the equation out.

The post You Could Make Your Marriage Even Stronger (Or Not) By Starting A Business Together appeared first on Number Crunchers.

What should you do first?

You should contact the Canada Revenue Agency (CRA) as soon as possible after their death, and provide them with the date of death. I would call 1-800-959-8281 and inform CRA of the passing, they are very understanding and will help you through the process.

There may have to be adjustments to certain benefit payments you were receiving, such as the GST/HST credit. You actually may receive more GST/HST credit due to the fact that it will now be based solely on your income. Or, if you weren’t getting the GST/HST credit due your spouses’ income, you may now qualify for it. That also goes for the Child Tax Benefit and the Working Income Tax Benefit. In the end, the payments will be recalculated based on his or her net income alone and will only include a claim for him or herself and any children, if applicable.

If your spouse was making installment payments, no further payments have to be made after his or her death. The only installments that have to be paid are those that were due before the date of death, but not paid.

What happens to RRSPs, property, etc.?

Capital Property

When your spouse dies, CRA considers that all capital property was disposed of right before death. This is called a deemed disposition. When capital property is sold there could be either a capital gain or loss depending on whether it was sold for more than it was worth.

If the property was jointly owned by you and your spouse then the property just falls to you and there is no taxable gain or loss until you sell the capital property. If your spouse solely owned it, then there will be a capital gain/loss that the estate must claim on the final return.

A capital loss can be used against current year capital gains or carried back three years, or on the return before the year of death or the final return, can be used to reduce other income.

RRSPs

RRSPs are considered cashed the day the annuitant dies. Now, as the spouse and beneficiary, CRA doesn’t consider the deceased annuitant to have received the funds as long as you are the sole beneficiary and by December 31^st of the year following the year of death, the amounts are transferred into your own RRSP or set up as a RRIF (Registered Retirement Income Fund for those over 71).

You will still get a T4RSP with Box 18 filled out and then will get a RRSP contribution slip from whomever you invested the RRSP funds with. You claim the amount as income in the year the RRSP funds are transferred from your spouse’s RRSP to yours and then get a contribution receipt for the same amount; in the end it’s a wash.

Death Benefits

In general terms, a “death benefit” is the gross amount received by a taxpayer in a taxation year less an amount of up to $10,000 and is included in the recipient’s income. The following payments are considered to be the gross amount of a death benefit:

• Payments in recognition of the employee’s service even though the payments continue for a long time on a periodic basis, or for the lifetime of the recipient, if they were made under an employer’s fund or plan that is distinctly separate from certain plans such as a superannuation or pension fund or plan, a salary deferral arrangement, or a retirement compensation arrangement; and
• Payments in recognition of service of an employee who dies prior to retirement that represent a settlement of his or her accumulated sick leave credits to which the employee was entitled under the terms of the office or employment.

The following payments are not considered death benefits:

• A payment received out of a superannuation or pension fund or plan, and in general, payments received out of a salary deferral arrangement, or a retirement compensation arrangement upon or after the death of an officer or employee;
• Where an employee dies prior to retirement, a payment in respect of accumulated vacation leave;
• A death benefit paid under the Canada or Quebec Pension Plan;
• A payment representing deferred employment income that would have been taxable in the employee’s hands if the employee had not died; and
• A payment representing overtimes pay that would have been taxable to the employee if the employee had received the amount before death.

Most death benefits will be included in the income of the deceased or the recipient of the benefit, such as you, the spouse.

Business

For a sole proprietorship, the business is considered closed as of the date of death, the final return will have to be filed, and the business number must be closed. Many people think that the business can continue as the husband and wife worked the business, however, unless the business was set up as a partnership with the spouses as owners, then the business cannot continue. If the business owned any assets, those are considered to be disposed of and capital gains/losses may come into play.

A partnership will continue based on the partnership agreement that was written, and even spouses should have a partnership agreement. A new partner can be brought into the partnership without having to apply for a new business number. If you as the existing partner no longer wish to continue the business then you can close the business or sell it.

For a corporation, when a shareholder passes the corporation continues on as normal. The structure of the corporation will determine the outcome of the corporation’s existence. As the sole surviving shareholder, you may have to consider what to do with the corporation, such as sell.

Death is a life-changing event and can take quite a toll on the surviving spouse. The best thing to do is look at your options and find the help you need to work out your tax situation.

The post My spouse just passed away, what affect is that tax wise? appeared first on Number Crunchers.

Very Organized

You will notice that time becomes very valuable when you start your own business. Lost time will always invariably lead to lost money. Only the most organized individuals are able to use their time productively. Being highly organized will mean that products are shipped on time, and that every element within your business receives the time and attention it requires. Work and business projects will quickly pile up into an insurmountable mound of unfinished tasks if you are not a highly organized disciplined person.

Discipline

You will need a massive amount of discipline if you wish to be successful as a self-employed person. You will need to be able to resist the charms of others who may wish to take advantage of you. You also need to be able to resist any temptation that will damage your productivity. Distractions hide around every corner, from the exploits of your friends online to family issues. You need the discipline to be able to ignore any distractions and get on with working on your business.

People who have been to university are often able to resist such distractions and temptations because they have had years of experience whilst working on their qualifications. People who go to university have to dedicate a massive amount of time to their studies, and if they did not have enough discipline to be able to ignore distractions, they would have failed their degree.

Tenacity

People who flip-flop from one decision to another are often very bad at running a business. Some of the most successful business persons have done so through tenacity alone. They have had an idea and stuck with it until it was completed. Edison failed over 1000 times in his creation of the light bulb, and documented over 3000 theories on how to make one. He succeeded though hard work and tenacity.

Time management

Using time productively is very important, as is the ability to judge how long a project will take. Time management is not a quality that will invariably lead to success, but it will certainly make succeeding a little easier. There are lots of problems that may appear thanks to poor time management. Some businesses such as within the construction industry rely heavily on correct time management. For others, good time management will be more of a perk than a necessity.

Ruthless

The non-stop pursuit of business goals is one key to success. However, it often takes a fair amount of tact and sophistication in order to do it without upsetting other people. Nevertheless, the indomitable spirit of a ruthless person is often the driving force behind their success.

Risk aversion

Risk is part and parcel of any modern business, and all businesses must take risks. You must try to manage any risk and avoid it at all possibilities. If you have to take a risk, then you need to set up contingency plans for if things do not go your way. On the other hand, if you take numerous risks in business, or plough in without proper forethought, you are going to have to rely on luck, which will eventually run out.

The post The personality traits you need to start a new business appeared first on Number Crunchers.

Audacious—and yet, the Bitcoin concept has received a strong vote of confidence from venture capitalist Fred Wilson, who has made a substantial investment in the startup exchange Coinbase. Investments like this from big names encourage the same from smaller players, which has led to exponentially rising prices. As in all things, rising demand and dwindling supply leads to scarcity, which creates self-sustaining uptrends. This isn’t to say that Bitcoin’s price will continue to rise indefinitely. Scarcity and demand alone are not enough to secure a new concept’s success.

That doesn’t mean, however, that the creators of Bitcoin haven’t stacked the deck in their favor. Unlike government currencies, which are mass-produced as needed, Bitcoin’s scarcity is hard-coded in its digital DNA. According to the plan, Bitcoin technology will generate new coins periodically, but the total amount they produce will drop by half every four years. By 2140, there will be 21 million coins in circulation.

Oddly, there is no organization governing this process. The code—written as a collaborative, open source effort by several developers—calls for servers, known as “Bitcoin miners,” to regulate the currency automatically. When one person sends Bitcoins to someone else via their computer or mobile device, these servers update a central ledger. This ledger—protected by several layers of redundancy—is responsible for keeping track of all coins in circulation. The ledger is also what puts new coins into circulation every four years.

Plugged into the Bitcoin miners are exchanges that operate somewhat like stock brokerages. They allow investors, speculators and consumers to buy, sell and trade coins in real time, 24 hours a day. One implication of this process is that participants are exchanging their local currency for Bitcoins, which makes Bitcoin a form of digital international currency.

Still, as revolutionary as the technology is, all is not rosy. As so often happens in the realm of Internet innovation, the tech’s creators have charged ahead before society has had a chance to chime in. Waiting in the wings are the world’s governments, who can—and maybe will—illegalize Bitcoin and any derivatives of the technology at any time. In the United States, for instance, only Congress has the authority to mint money. No matter how you slice it, Bitcoin is presenting itself as money.

If governments don’t try to ban Bitcoin outright, they can still shackle it with that old standby, regulation. Says Bart Chilton, a commissioner at the Commodity Futures Trading Commission: “Here’s what I know for sure: we could regulate it if we wanted.” Regulation wouldn’t necessarily mean the end of Bitcoin, however, and may actually indicate acceptance from the powers-that-be. Opponents to regulation point to the open source nature of the currency as reason enough to think twice. Regulation would no doubt require that the technology be dismantled and rebuilt on a closed-source platform, making the technology more akin to existing services such as PayPal and by extension, less appealing to investors.

At the end of the day, after all, it’s the investors that drive a new venture, and the investors are already a bit wary. To wit: Bitcoin’s volatility. Investors have seen the value of the Bitcoin fluctuate from single digits to triple and back with no end in sight. Like any other exchange, Bitcoin is sensitive to market sentiment and news, as well as buying and selling pressure.

More than anything in the initial phase of Bitcoin, it’s the news that’s driving price. Speculators note strong swings any time a Bitcoin exchange is hacked—which happens more than you might think. Both Bitfloor and even the popular exchange Mt. Gox have suffered attacks. In the case of Bitfloor, the attack was fatal: the hackers made off with $250,000. Mt. Gox’s hacker, on the other hand, broke into a Mt. Gox client’s wallet and sold the coins they found within for next to nothing, driving the price of the Bitcoin down to practically nothing.

As if this weren’t enough to motivate Mr. Chilton to take another look at regulation, it isn’t just the exchanges that are vulnerable. True to form, the hackers have already created a trojan that can break into any Bitcoin user’s wallet. The ever-charming Info-stealer, Coinbit, as it has been named, sifts through a user’s files searching for “wallet.dat.” Once found, it uses its Internet troll magic to connect to a Bitcoin miner and transfer all of the coins to its master. Mac users aren’t safe either: the aptly named DevilRobber trojan gets up to much the same mischief. Bitcoin’s creators emphasize that individual users can encrypt their wallets with a minimum of effort and that, like most viruses, Infostealer and others will prey upon uninformed users.

Despite the doom, gloom, and naysayers, Bitcoin delivers what it promises. The tech offers a platform that allows users to transfer unlimited amounts of money to one another with no fees. Moreover, consumers can send money to each other anonymously. Certainly there’s a non-shady use for this. Somewhere. Perhaps more importantly, the sky’s the limit for Bitcoin. The inherent scarcity and mounting confidence from big-name investors could mean ever-climbing prices. On the other hand, Bitcoin could be the next cyberspace bubble. Only time will tell.

The post Bitcoin: Bubble or Boom? appeared first on Number Crunchers.

A Little History

WorkSafeBC (the Workers’ Compensation Board) is an independent provincial statutory agency governed by a Board of Directors. It is funded by insurance premiums paid by registered employers and by investment returns. In administering the Workers Compensation Act, WorkSafeBC remains separate and distinct from government; however, it is accountable to the public through government in its role of protecting and maintaining the overall well being of the workers’ compensation system.

WorkSafeBC was born out of a compromise between B.C.’s workers and employers in 1917 where workers gave up the right to sue their employers or fellow workers for injuries on the job in return for a no-fault insurance program fully paid for by employers. WorkSafeBC is committed to a safe and healthy workplace, and to providing return-to-work rehabilitation and legislated compensation benefits to workers injured as a result of their employment.

Do I Have To Register?

Most businesses in B.C. are required to register with WorkSafeBC. Generally, you must register if you:

• Employ and pay workers on a regular, casual, or contract basis
• Hire someone to work in or around your home for a certain period of time
• Come from another province or country to work in B.C.
• Work in the commercial fishing industry
• Work in the trucking industry and operate trucks in B.C.

Individuals and firms are not required to register if they are:

• Partners or proprietors if the business is unincorporated (even if the proprietor’s operation includes his or her spouse)
• Independent operators who are neither employers nor workers

Incorporated Companies

Incorporated companies differ from unincorporated companies because the shareholders, directors, officers of the corporation and principals (officers who also own shares in the corporation) who have any degree of activity in the operation are considered to be workers, and as such, are entitled to compensation. They cannot purchase Personal Optional Protection, WorkSafeBC’s optional insurance plan. Therefore, principals of corporations must register their companies and declare the number of principals/active shareholders and their total earnings (this now includes dividends).

The only exception to mandatory registration for an incorporated company is when the corporation is deemed a “personal service corporation”. This is when no other help is employed and, but for the incorporation, the principal clearly falls into the worker category. The exception also applies to situations in which there is a degree of common ownership between two companies and the sole function of the principal firm is to provide labour to another firm’s operations (e.g. administration or management function).

Personal Optional Protection (POP) coverage

Individuals or firms not required to register may opt for voluntary coverage. Partners, proprietors, or independent operators who are not automatically covered under the Workers Compensation Act may apply for Personal Optional Protection, optional insurance that will cover lost salary and medical expenses in cases of work-related injury or disease. Proprietors can also apply for POP coverage on behalf of their spouses.

What if I do not register?

It is against the law to avoid registering when you are required to do so. If you are required to register and do not, and one of your workers is injured, you could be fined and charged the total compensation costs of the injury plus retroactive insurance premiums.

The post When Do I Register for Workers’ Compensation? appeared first on Number Crunchers.

At this point, unless you can run your financial transactions with gold, you are forced to use currency that is issued by a government. All the money in each country is issued by and backed by the government in that country. In other words, it is centralized. Gold, on the other hand, simply has universal value and acceptance. It isn’t centralized. If you were to dig around in your backyard and find a little gold ore, that would be just as valid (when refined) as the gold you bought at a jewelry store.

Bitcoin hopes to imitate this effect that gold has. If you want Bitcoin money, you install a program on your computer that very slowly generates virtual Bitcoin value to place in your Bitcoin wallet. Your virtual Bitcoins are considered to hold value just because they exist – just the way gold just exists and is considered valuable just for being what it is. Legal tender is simply printed by governments, too – with nothing much to back it up with.

The difference between Bitcoins and gold, of course, is that gold is a real material that has worldwide acceptance while Bitcoins are simply computer-generated Monopoly money that need universal acceptance that they don’t yet have. If Bitcoins do capture the imagination of the world at large, they could become as valuable as gold one day.

If you went prospecting for gold and found a handful, you could use it anywhere for real goods and services. The bits of gold that you gave merchants would not have a serial number on them to make your transaction traceable. Bitcoins have no serial numbers, either. To privacy advocates everywhere (and to terrorists and drug dealers), this is a very attractive feature.

Where did the whole Bitcoin idea come from?

The idea came from a software developer who goes by the pseudonym Satoshi Nakamoto in 2008. It was his idea to create a peer-to-peer financial system that ran parallel to the real financial system.

The peer-to-peer idea is simple enough to understand. If you desire a copy of Avatar and you don’t want to pay for it, you usually go look to directly download a copy from someone on BitTorrent. The BitTorrent client program on your computer (something like uTorrent) finds someone in the world who has a copy of the movie you want and facilitates a direct transfer from his or her computer to your computer. There is no charge or brokerage to pay anyone.

If you want to transfer $100 to your brother’s bank account in England, though, you would have to pay a bank or other financial organization a hefty 5% to 10% transfer commission. The Bitcoin system doesn’t want to have people pay third parties to transfer their own money. They want people to directly transfer money to one another using BitTorrent like software.

How do you get Bitcoins of your own?

If you want to get in on the Bitcoin movement yourself, you just need to go to Bitcoin.org and download your own Bitcoin wallet software. Your computer then joins the Bitcoin worldwide network of computers. Your computer creates Bitcoins by solving difficult algorithms that the main servers send it. The more powerful your computer is, the more quickly it will solve problems and generate coins.

These algorithms, though, are so time-consuming for any home computer to solve that the going tends to be really slow. It can take you a month to generate 25 Bitcoins. The Bitcoin algorithm solving method gets a lot of criticism. To have a powerful network of computers like this wasted on solving useless algorithms that aren’t needed irks many.

Reportedly, the network is more powerful than hundreds of super computers put together. If only all this computing power could be harnessed to solve real scientific problems, critics say.

Most Bitcoin fans try to join Bitcoin pools online – where people pool their computing resources together to generate Bitcoins more quickly. The Bitcoin system is designed so that only 21 million Bitcoins are ever created. As more and more people join the network, the Bitcoin system will slow down to make sure that it never exceeds the 21 million cap on coins produced.

Now for the big question – what you do with these coins once you have them?

Right now, Bitcoins have novelty factor. People who can’t wait to have their computers mine them coins of their own will pay $50 for one virtual coin. There are only a few places around the world that accept Bitcoins for actual merchandise. It depends on the store and how badly the owner personally wants Bitcoins. There are a few businesses – a car dealership in Kansas, an online guitar store, the Bitcoin store, some online games, WordPress, online drug dealers and so on.

If you skip Bitcoin for the competition – Amazon Coins by Amazon – you could get some actual merchandise. Amazon gives away 500 Amazon Coins to every Kindle Fire customer. They can use those coins for Kindle Store purchases.

The post What On Earth Is a Bitcoin and What Can You Buy With One? appeared first on Number Crunchers.

1. Establish your business. One way that small businesses miss out on tax deductions is by not formally setting up the business legally. By registering or incorporating your business you begin to formally separate your business and personal management to enjoy the tax deductions due you. Contact your province’s corporate registry for filing information and work with Canada Revenue Agency (CRA) to secure your business number.

2. Keep thorough records. When you formally established your business, as a corporation you were given a business number by the CRA. You can register for a business number as a proprietorship/partnership if you’re hiring employees, or charging GST/HST. Your business number should be used by you as you open up checking accounts, seek credit and for obtaining your business credit scores. Keeping your personal records separate from your business is important as your business dealings will not be attached to your personal dealings.

3. Enjoy tax deductions. As an individual you enjoy certain tax deductions. Such as medical, charitable donations and certain family discounts. As a business, there are deductions available to you including what you pay for rent, equipment amortization and more. You can also enjoy tax deductions for cost of goods sold, capital expenses, the business use of your car, insurance, interest, taxes and rent.

4. Depreciate with care. There are several ways that you can take advantage of income tax depreciation deductions for your business, especially with the property your business owns. Although land is not depreciated, your building is. Moreover, improvement to it can be deducted. You can turn land into a deductible asset by leasing the property separately instead of buying it. Try accelerating your depreciation deductions by separating your real property from personal property.

5. Advertise with abandon. Clearly, you have an advertising budget in mind. Did you know that your advertising expenses are deductible? That is one reason why businesses large and small advertise heavily: your advertising expenses are directly deductible from your taxable income.

6. Explore your compensation options. Employee costs are tax deductible. While you may think that you cannot afford to pay your key employees more, you may find that you really have no choice. Especially if you want to retain your best workers. The greater expense in increased compensation is tax deductible and can be more than countered by the increased work your most loyal workers will provide.

Your Accountant

Work with your accountant/bookkeeper (their fees are a tax deduction) to find additional tax deductions available to your small business. Federal, provincial, and local incentives vary and may provide additional relief to your small business.

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You can claim payments for childcare expenses made to:

• Eligible 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);
• Boarding schools, overnight sports schools, or camps where lodging is involved;
• Advertising or placement agency fees incurred to locate a childcare provider; or
• Mandatory registration fees.

You cannot claim childcare expenses paid to any of the following:

• The father or mother of the eligible child;
• Your spouse or common-law partner (if different from the biological parent);
• Any person for whom you’re claiming as an eligible dependent, or disabled dependent;
• Any person under 18 who is related to you (brother, sister, another child); though niece or nephew is okay;
• Fees paid for leisure or recreational activities, such as tennis lessons or the annual registration fees paid for Scouts.

The individual or organization that received the payments must give you a receipt showing information about the services provided. When an individual provides the childcare services, 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 a subsequent taxation year.

If you have incurred any expenses, which could also be claimed for the children’s fitness or arts amounts, you must claim them under childcare expenses first then the balance can be claimed for the other credits.

In order to claim childcare expenses, you need to file a T778 Information About Child Care Expenses form or fill it out if using tax software. The deduction can be up to $7000 for children 6 and under, and $4000 for children between 7 & 16. For a child where you are claiming the disability amount and were born in 2012 or earlier, you can claim up to $10,000 in childcare expenses. For those children 17 and over who do have a physical or mental impairment but you cannot claim the disability amount you can claim up to $4000 for childcare expenses.

Childcare expenses are a necessary part of the working family’s life these days, and you may as well take advantage of the deduction and save yourself some taxes.

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