Signs of a CRA Scam

Each year, more and more people are falling victim to CRA scams. These aren’t scams being done by the Canadian Revenue Agency but rather people scamming others by pretending to be the CRA. It’s easier to fall trap to these ploys than most people think. Many go to great lengths to be convincing. By using fake CRA identification numbers, make replicas of official websites and forge official looking documents. If you look for these signs though you can keep yourself safe and be able to identify one.

CRA Calls

One of the most common scams that people pull is calling individuals to claim they owe tax money that needs to be paid immediately. Don’t ever believe these calls. The CRA will never call and demand and immediate payment. In fact, they never even call without having mailed you a bill or notice first. It’s easy to see how people would fall trap to this scam, though. The fear of owing money to the CRA can be intense. Never give any information over the phone and double check by calling the official CRA number.

Payment Demands

The CRA will never call, email, or mail a bill demanding an immediate payment without giving you the opportunity to question or appeal them. The CRA will always work with people to find a payment schedule that works for them. The real CRA will take the time to answer questions and discuss payment methods and timelines.

Required Payment Methods

Certain payment methods are preferred over others when it comes to scam artists. This is why most CRA scams will require you to pay only using these specific methods. The real CRA has a long list of acceptable payment methods. Wire transfers, cash, and prepaid debit cards tend to be favored among scam artists as they are hardest to track.

Credit Card Numbers Over the Phone

CRA scammers will ask for credit and debit card numbers over the phone. You should never give out this information over the phone unless you know for sure who is calling. The CRA will never ask for this information over the phone. If you have given your card numbers out over the phone contact your accountant to check your finances.

Threats of Law-Enforcement

It is true that if you don’t pay your taxes or have committed fraud you could face legal repercussions. However, the CRA will never call and threaten you with law-enforcement. There is a long legal process for CRA fraud issues. A popular CRA scam is to threaten people with jail time or calling law enforcement if a payment isn’t made immediately.

Email Phishing

Email “phishing” is when scams happen through the web or email. Scammers will send out official-looking emails with links to official-looking websites to trick people into believing they are the CRA. They seek out personal and financial information to be used against them. Pin numbers, social insurance numbers, and credit card numbers are frequently asked for. Always show emails of this nature to your accountant or call the CRA to double check the validity.

Tax Refund Scams

Sometimes scammers don’t ask people to pay but instead ask for information in order to receive tax refunds. If you are going to receive any tax refund you will be mailed an official notice from the CRA. Always double-check everything before giving out information.

What To Do If You Come Across a Scam

When you come across a CRA scam there are a number of things you should do. Double-check everything with your accountant and the CRA. Contact one of the CRA hotlines and file an official complaint. If you think you have already fallen victim to a scam and notice issue with your financial data contact the police.

To learn more contact us today.

Chartered Accountant: What to Look For

Hiring a chartered accountant can benefit both your business and personal finances. It’s important to know that not all accountants are the same, though. This person is going to have access to your financial data so you want to make sure you’re hiring the right person. When you’re hiring a Toronto chartered accountant, look for the following things.

Referrals

Word of mouth referrals is how most chartered accountants get the majority of their business. Getting a referral from family, friends, colleagues, and others are the best way to know if an accountant is good.

Determine Your Needs

Before you can hire an accountant you need to determine what you need them for. Chartered accountants can specialize in different areas of finance, from small businesses to personal. You don’t want to hire a corporate accountant for your personal taxes.

Licensed Professionals

The first thing you should verify before hiring any chartered accountant is that they are fully licensed to practice. You should also make sure they are licensed for what you need them for since there are variations of accounting certifications and degrees.

Accessibility

You want to hire an accountant that will have time for you and your needs. If you like in person meetings make sure you can access their office or if you prefer remote communication make sure they’re available to answer your calls and emails. If you don’t have access to them, what is the point of hiring them?

Price

Ask the chartered accountant about their pricing structure before hiring. Is there a set fee or is it hourly? You want to know exactly how much they’re going to be charging you and why.

Technology

We live in a technological era so it’s a good thing to ask about what technology the chartered accountant used. Ask them about digital filing, cloud accounting, and remote communication. They can also provide recommendations for accounting programs and software.

Likeability and Trust

You want to be able to trust the person you’re hiring to handle your financial information. If you’re going to be working closely with them it could also be important to make sure you like them as well.

Contact us today to talk about hiring us as your Toronto chartered accountant.

Qualities Needed to Excel As a Chartered Accountant

To make it as a Toronto chartered accountant there are a few qualities, traits, and skills you need to excel. People put trust in their accountants to handle their confidential and important financial data and they expect quality services in return. Having the following qualities will help you as a chartered accountant.

Organization

As an accountant, you have to keep all the figures, data, and paperwork in order. An effective organization system that helps you maximize productivity is vital to excelling. A good Toronto chartered accountant will have top-notch organization skills so that their clients never have to deal with you misplacing vital paperwork.

Time Management

As a chartered accountant, you will have to keep track of schedules, deadlines, and meetings. Many accountants not only file financial data but they also have the additional tasks and roles of providing financial advice and decision-making. Getting a reputation for filing data late or missing meetings will not help your reputation.

Creativity

You might be surprised to learn that a good chartered accountant also has to be creative. No every case or client will fit into a standard textbook solution. Toronto chartered accountants need to be able to think out of the box.

Attention to Detail

Chartered accountants have to have good attention to detail. The smallest mistake can have extreme consequences when it comes to accounting. You have to be able to catch not only your own mistakes but your clients as well.

Communication

To excel as a chartered accountant you must be able to communicate effectively. You’ll have to communicate with colleagues as well as your clients. Miscommunications can be as detrimental as accounting errors.

Trustworthiness

Bottom line, if people don’t trust you they won’t hire you. As a chartered accountant, you are dealing with confidential, important data. Whether the client is a large corporation, a small business, or someone’s personal finances, they have to trust in your integrity and abilities.

Patience

A Toronto chartered accountant has to have patience. You will need it when working through endless numbers when you wait seemingly forever for a client to get back to you, and when you’re explaining how to fill out a simple form for the hundredth time.

Professionalism

Being professional at all times, even when others are not, it an important quality in a chartered accountant. Keep emails and phone calls cordial and even when you’re getting blamed for something you didn’t do you must take it in stride. Nothing will make you lose clients faster than being unprofessional.

Being a Toronto chartered accountant is hard work, but by working toward gaining and honing these few qualities you can excel at the job. Contact us today if you have any more questions.

 

 

 

Why You Should Get QuickBooks Online For Your Small Business

Bookkeeping is one of the most time consuming and stressful parts of being a small business owner. It’s seemingly never-ending and can become overwhelming. Luckily in this age, there is accounting software such as QuickBooks Online that can help you better manage your financial data. Here’s why we recommend you getting QuickBooks Online to help you manage your small business accounting.

Price

Even the most basic QuickBooks Online package offers everything you’ll need to manage the books. Every key feature you could want or need is offered even at their cheapest plan, unlike other software, which can be pricey especially as you add more on. Every package of QuickBooks Online can be customized to your pricing and accounting needs.

Easy To Use

QuickBooks Online is extremely easy to use. With its navigation and dashboard, you can see the financial health of your business at any time. This software also boasts a friendly and professional customer service team to help you with any needs or concerns you have along the way.

Time Saving

Most small business owners will tell you they spent more time on bookkeeping than they’d like. With QuickBooks Online you don’t have to anymore. This accounting software is a huge time saver. Tasks can be automated and financial data between bank accounts can all be synced to make everything easy for you. QuickBooks Online allows you to spend less time working on your books and more time actually running your business.

Accountant-Approved

Most accountants already use QuickBooks so whether you already have an accountant or are looking to get one in the future chances are they already know how to use this software. Sharing vital and necessary data with your accountant also becomes significantly easier and safer with QuickBooks Online as your accountant can sign in and see everything you need them to.

Cloud Accounting

QuickBooks Online is a cloud accounting software, meaning your financial data is stored in secure and remote cloud servers. This data can be accessed anywhere at any time through encrypted passwords. Real-time changes and updates make it easier for you to run your small business. There are even more benefits to cloud accounting which you can read about here.

If you own and run a small business consider getting QuickBooks Online today. With this software you’ll have an easier time with bookkeeping and more time to focus on what really matters, running your business. If you would like to know more about QuickBooks Online or want to talk to an accountant contact us today.

 

Tax Tips for Real Estate Agents

The boom of the real estate market can be enticing to newcomers. Make sure you follow these tips as you enter the business to make sure you make the most of your time and money.

General Tips

  • Meet an accountant: an accountant will tell you what documents to keep and for how long. They’ll be able to answer all your questions and help you with claiming tax deductions you might have not otherwise known about.
  • Organization: Organization is a good idea for everyone, but especially if you run a business. Consider getting online accounting software to keep track of everything.
  • Separate business bank account: This is a no brainer but you should always have separate business and personal bank accounts. It makes keeping track of the different kinds of expenses easier and it makes things cleaner for tax purposes.
  • GST/HST: The GST/HST you collect throughout the year doesn’t actually belong to you- it all has to be paid back to the CRA. We recommend putting it all aside in a separate account so you don’t have to scramble at the end of the year.

Deductions and Write-Offs

  • Standard Expenses: All the standard expenses such as advertising, promotions, and meals can be deducted from your business taxes. Double check on how much you can claim for each expense.
  • Commission Rebates: Commission rebates are 100% deductible for real estate agents.
  • Real Estate Tuition Courses: Real estate courses are deductible and can be claimed either as a tax credit or an expense. Factors such as whether you have your license or how long it’s been impact which way you should claim these courses. Talk to your accountant to make sure you are claiming it the correct way.
  • Vehicle GST/HST: The GST/HST on vehicle purchases can all be claimed. If the vehicle is sued 90% or more for business purposes all of it can be claimed but if it is used for less than 10% none of it can be. There is a certain formula used to calculate GST/HST claims if you call somewhere between.

The real estate market can be tough and stressful. Hopefully these tax tips, deductions and write-offs can alleviate a little stress and save you a lot of money. Talk to an accountant before filing to make sure everything is correct and up to the CRA standard.

 

Incorporating Your Business: What To Do After

After taking the big leap of incorporating your business and wading through the questions that come with that, you might be left wondering what to do next. Often, business owners have just as many questions after as they did before. It’s always important to keep your business legal so make sure to follow these steps after you’ve incorporated.

  1. Obtain a Business Number from the CRA

A business number is how the government keeps track of your business. The CRA will main you’re an official business number but if you need it right away you can always call them at 1-800-959-5525.

 

  1. Determine if a HST number is required

A HST number is required for businesses that earn over $30,000 annually. You can register for a number by calling the CRA at 1-800-959-5525.

 

  1. Open a Corporate Bank Account

A separate corporate bank account is important to running a legal corporation. It’s required in order to receive cheques or pay yourself and employees.

 

  1. Track all Business Income and Expenses

Keeping track of all income and expenses for your business, whether you’re incorporated or not, is vital. Talk to your accountant on the best way to keep track of all your financial data and in determining what receipts need to be kept and for how long.

 

  1. Determine How to Pay Yourself

There are two main options to paying yourself from your incorporated business, salary or dividends. You accountant should be able to advise you on which is best for your situation.

 

  1. File Corporate Tax and HST Returns

Corporate taxes have to be filed annually, just like personal ones. HST returns on the other hand are filed based on selected frequency, usually either annually or quarterly.

 

  1. Obtain Required Business Licenses and Permits

Certain businesses or industries may be required to obtain certain licenses or permits. Even if you are a registered corporation you might not legally be allowed to operate without certain licenses and permits.

It’s always a good idea to research online and contact your accountant to make sure you are meeting all the legal requirements for your newly incorporated business. Follow these tips and guidelines and you’ll be on the right track.

 

Paying Yourself From Your Company: Salary or Dividend?

 

Owning a small business is stressful at the best of times. You work hard, putting in precious time and energy to keep it running successfully. You’re then faced with the tough decision on how best to pay yourself. There are two main options available: salary or dividends. To help you decide, we’ve compared the advantages and disadvantages of both.

Salary Payment Advantages

A big advantage with paying yourself a salary is that you have a personal income. This means that:

  • You are able to contribute to the Registered Retirement Savings Plan (RRSP)
  • You will be paying into the Canada Pension Plan (CPP), which both set you up for retirement.
  • Your salary will be tax deductible for the corporation
  • Splitting income with a related family member becomes easier

 

Salary Payment Disadvantages

There are some disadvantages as well when it comes to salary payments. For one, having a personal income is a con as well as a pro. It means that:

  • Your salary is 100% taxable
  • You will have to pay CPP as both an employer and an employee
  • You will have to set up a payroll with the CRA
  • All related paperwork will have to be completed for the CRA

 

Dividend Payment Advantages

If you’re not sure paying yourself through a salary is for you there is also dividends. Dividend payments have the following advantages:

  • They are taxed at a lower rate
  • Not paying into CPP means saving more money
  • It is a simpler paying process

 

Dividend Payment Disadvantages 

There are also some disadvantages to receiving dividends. Such as:

  • Not allowed to contribute to the RRSP
  • Not paying into the CPP directly effects how much you receive when you retire. Both of these things put your retirement in jeopardy.
  • Tax deductions such as childcare might not be available to you
  • Wage replacement for injuries and disabilities is harder to calculate

Which Payment Method?

There are advantages and disadvantages to both payment methods. The answer to which method you should pay yourself with is that it depends entirely on your personal financial circumstances. Talk to you accountant to discuss which option is better for you.

Look Out For These Red Flags to Avoid an Audit  

            Whether it’s personal or business taxes, an audit is everyone’s worse nightmare. Sometimes there is nothing you can do to avoid one- the CRA (Canada Revenue Agency) does audit at random. However, there are 8 huge red flags that people often commit that draw unwanted attention and can result in an complete financial audit.

  1. Revenue Discrepancies: Make sure the revenue you declare on your income taxes matches all forms including your employer’s, your GST and your spouse’s.
  2. Being an Outlier: If your business profits are higher or lower than the normal industry amount the CRA pays special attention to you. Sometimes you can’t avoid this so if you’re in this situation talk to your accountant to make sure all your financial information is set incase an audit comes your way.
  3. Deducting Large Business Expenses: Make sure you’re deducting the right amount for the large items you purchased for your business. Your accountant can best advice you on how much to claim for advertising, entertainment and other business expenses.
  4. Claiming Home Office Deductions: If you work out of a home office you can make some tax deductions but the CRA keeps a close eye on these so be sure you qualify and that you only claim the correct amounts.
  5. Claiming 100% Business Use of a Vehicle: This is a huge red flag the CRA notices. Very few people use a vehicle exclusively for business. Keep detailed records of mileage and consult your accountant before making these claims.
  6. Running a Cash-Intensive Business: Businesses that work with high levels of cash (restaurants, bars, hair salons etc.) are big targets for the CRA. There’s a big temptation to underreport and the CRA knows this. Make sure you report everything to avoid an audit, back payments and fines.
  7. Math Errors: Basic math mistakes are red flags committed by both individuals and businesses. We’re only human but the CRA audits most people because of these simple errors. Have your accountant double check all your work to avoid unwanted attention.
  8. Income Threshold: If you earn more than $100,000 in income a year the CRA automatically pays more attention to you unfortunately. If you fall into this category make sure you and your accountant have all your financial data ready for an audit because your chances of getting hit with one significantly increase. 

Honesty is the best policy when it comes to filing both business and personal taxes. Avoiding these red flags significantly decreases your risk of an audit by the CRA. Sometimes it can’t be avoided though so make sure you keep your financial information up to date and organized.

Canadian Professions That Can Incorporate

There are a ton of benefits to incorporate as a business profession but unfortunately only a few professions qualify for it. Typically only professions that are governed by a professional governing association can be lawfully incorporated.

There are some limitations and restrictions when it comes to professional corporations and your accountant can help guide you through them. The benefits greatly outweigh the limits though. A primary reason to incorporate has to do with taxes. Professional corporations receive lower tax rates and income tax deferrals. Personal taxes are also positively impacted when you incorporate.

Unfortunately only a few professions are eligible to incorporate under Canadian law. The following professions are allowed to:

  • Audiologist
  • Chiropractors
  • Dental hygienists
  • Dental surgeons
  • Dental technologists
  • Denturists
  • Dieticians
  • Lawyers
  • Massage therapists
  • Medical laboratory technologists
  • Medical radiation technologists
  • Midwives
  • Nurses
  • Occupation therapists
  • Opticians
  • Optometrists
  • Pharmacists
  • Physicians and surgeons
  • Physiotherapists
  • Psychologists
  • Respiratory therapists
  • Social workers and social service workers
  • Speech language pathologists
  • Veterinarians

If you’re a licensed profession in any of the eligible fields talk to your accountant about incorporating today. The tax benefits of incorporating your profession are bountiful and it won’t be a decision you’d regret.

 

 

 

 

Small Business Expenses to Claim On Your Taxes

Everyone that has ever owned a small business knows that there are costs every step of the way. The good news is that the CRA makes most of these expenses tax deductible. A good rule to remember is that if it is necessary to running your business then chances are you can claim it. Go over these expenses with your accountant to make sure you are claiming the right items for the right amount.

Advertising

Advertising and marketing is vital to the success of a business. Not every media is equal in the eyes of the CRA though. Canadian newspaper, television and radio advertising is all 100% deductible but most magazine ads are only 50% deductible. There are also certain rules when it comes to claiming advertising in international publications or towards international markets so talk to your accountant about how much you can claim for these.

Business Operating Expenses

Expenses such as fuel, repairs, and building maintenance all fall under this category. These expenses are typically 50% deductible. Service fees for lawyers or accountants are also allowed to be claimed so as you meet with your accountant and go over all these items know that you can write it off on your taxes!

Home Office

Businesses run from a home office are deductible as well. The CRA keeps a close eye on these though so make sure you qualify. You must use the space only to meet with patients, customers or clients for your business. When expenses overlap with personal ones (such as mortgage, insurance and bills) you can only claim the percentage related to the business.

Meals and Entertainment

For some businesses certain entertainment items like lunches or tickets are necessary to wooing clients and keeping them happy. The CRA allows you to claim 50% of the value of these items. Staff parties, fundraising events and client billings are also fully deductible on your taxes.

Capital Property

Purchases such as vehicles, furniture, equipment and building space are not only vital to the success of your small business but are also tax deductible. For these items the full amount can’t be claimed in one year, but the cost can be claimed in small percentages over the lifetime of the item.

When it comes to deducting items for your business, it is always a good practice to talk things over with your accountant. Deducting errors can lead to a CRA audit, which no one wants to always double check.