Many small business owners do not have the resources necessary for keeping good accounting records. For many, accounting creates a lot of frustration. I provide accounting service that saves the small business owner; time, money and frustration.
With over 18 years of accounting experience with small business in the Hamilton area, Susan Ivanovics, CPA was opened in January 2016. I work closely with my clients to make sure I know what their goals are, I provide custom-tailored service to meet their needs. Committed to developing strong customer relationships and I convey high regard towards professionalism and integrity and brand these values as my business model.
[04/30/19] Just a friendly reminder, personal income taxes and any amount owing is due today. Got a question? Reach out below!
Sole proprietors, partnerships and small business owners this one’s for you. Sharing this helpful blog with some great advice.
Happy Easter everyone~
#TipTuesday - Even if you have no or low income, file your income tax return for the following reasons;
✔️To recover any overpaid taxes or other source deductions
✔️To take advantage of Federal and Provincial refundable tax credits
✔️To create contribution room in a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA).
File a return and you won’t miss credits or benefits such as GST/HST tax credit, Child Tax Benefit and Trillium Benefit. If you do not file a return, you will miss out on any benefits that you may be entitled to.
Earlier this week I shared insights into how to claim vehicle mileage that won’t raise a flag with the CRA. Today I’m breaking down tips for small business owners claiming home office expenses.
👩💻If you are self-employed/sole proprietor, you can claim your home office expenses if it is your principal place of business used for earning income more than 50% of the time.
🏠You may also claim a portion of your household expenses. For example, if the space you use for business is 144 square feet and your entire home is 1,440 square feet that would be; 144/1,440 = 10% of the following household expenses can be claimed;
- Repairs and maintenance (reasonable, as long as it has to do with the space used for home office)
- Home Insurance
- Mortgage insurance
📆When reporting, categorize each home office expense by group by month. It’s important to keep good records.
Got a question about reporting home office expenses? Reach out in the comments below!
In my experience, there are a couple reporting issues that can raise a flag with the CRA: claiming vehicle expenses and home office expenses.
Here’s a couple tips on how to claim vehicle expenses that won't get you in hot water with Revenue Canada.
🚗 Keep a log of the total km you drive and for business. The log book should even detail the amount of km for business purposes, it’s VERY important to keep accurate records on this.
📱You can log mileage manually, or use an app such as Milog, TripLog or MileIQ.
✍️ Record mileage monthly. Track your starting km from the odometer at the start of each month. Only record in your log the km used for business. Then compare the amount total amount of km to km used for business.
Why a CPA? As part of this accredited community, here are just a few valuable things we can bring your business:
- A personal, customized approach: we can help you make good business
- One-stop shop: we provide a wide-range of services to meet your business
- A commitment to meeting your expectations: when you succeed, we succeed!
If you’re preparing for your first year of filing business taxes you may want to read this first. Got a question about this years filing for a small business? Reach out in the comments below and let’s discuss!
thebalancesmb.com All of the information Canadian small business owners need to know about preparing and filing individual or corporate Canadian income tax returns.
Happy St. Patrick's Day Hamilton!
#TipTuesday - Non-incorporated businesses, such as self-employed entrepreneurs report on a calendar year-end and file a personal return. Tax returns for the self-employed/Sole Proprietors must be filed by June 15. However, some entrepreneurs don’t realize that any tax owing must be paid by April 30. If a self-employed/Sole Proprietor files tax returns June 15 and has tax owing, the amount of days between April 30 and June 15 (46 days) will accrue interest charges.
Managing your business expense records might be that item on your to-do list that just never seems to get top billing on your list of priorities. Here are a few tips to make record filing more manageable (and tax-time a little easier!)
If you’ve recently sold or are thinking of selling your home, you’ll be happy to know that selling it won’t have an effect on your income tax at all.
Generally you don’t have to pay tax on your profits from the sale of your principal residence. However as an entrepreneur be mindful if:
👩💻you’ve used part of the home to produce income or earn income, or
🏠 if your home has not been your principal residence every year you’ve owned it.
Ask your accountant or reach out below about any tax related questions.
Hamilton entrepreneurs this one’s for you! Tax time is around the corner, and working with a CPA you trust will alleviate added stress and set your business up for success. I specialize in making professional accounting accessible for small businesses in Hamilton and fostering trust with my clients.
Here are just some of the benefits of working with a CPA:
- A personable experience tailored for your business
- Quality advice and service without the high fees
- Peace of mind knowing your filing is in order
Reach out for a quick consultation and lets discuss your business!
Have you received the phone scam from the Canada Revenue Agency (CRA) telling you owe money and must pay up? The caller threatens people that if they don't act fast, their assets will be frozen and police will arrest them. Bottom line, don’t fall for it!
The CRA will never:
❎ Ask for personal information by E-mail or text
⛔️ Request payment by prepaid credit card
❗️Share your tax information with another person or organization, unless you have agreed to it
📞 Leave personal info on an answering machine
🛑 Threaten you, use abusive and/or malicious language
When in doubt check “My Account,” at: www.cra.gc.ca/myaccount or call: 1-800-959-8281.
If you are a victim of CRA Fraud, please report the incident to: www.antifraudcentre.ca.
If you believe you are a victim and have given financial info by mistake call your local police services.
Happy Valentine’s Day Hamilton ❤️
#TipTuesday - Would you say you’re a frugal business owner or entrepreneur? Your dollars might be spent more wisely in one area over the other. Give yourself a quick assessment and see how frugal you are as a business owner.
under30ceo.com A frugal business owner can evaluate their business based on the numbers and spend the money wisely.
Pop quiz time! Do you know the difference between an accountant and a Chartered Professional Accountant? As an entrepreneur it’s important to know and protect yourself and business. Here are 3 reasons it matters to work with a CPA:
✍️ As professionals, we belong to a self-regulated professional body which has the mandate to promote and protect the public interest.
👩💻 We are required to meet and maintain standards of qualification, practice, and professional ethics, as well as standards of knowledge, skill, and proficiency.
⚖️ Only firms that are properly registered and comply with the regulatory and ethical requirements of CPA Ontario can call themselves Chartered Professional Accounting firms.
If you’re interested in working with a CPA in Hamilton I would love to help! Reach out to book a consultation today.
As a small business owner, the power of networking can make or break your business depending on your industry. Personally, we find that making more meaningful connections in smaller groups, industry associations and as part of support group can be beneficial. What are some of your networking tips?
Do you know if you need to register for W.S.I.B.? Maybe not. There are a few industries that do not have to register. Hair salons, photographers, travel agencies and even computer software developers just to name a few. Call W.S.I.B. If you are not sure 1-800-387-0750
#tiptuesday Keep these rules in mind if you’re withdrawing funds from a TFSA;
*You can take out money from a TFSA anytime and any amount.
*You can add back the amount you have taken out, however, only if you have contribution room.
*If you over contribute to your TFSA, you will be charged 1% interest in the month that you have over contributed.
Got a question about TFSAs? Just ask below!
Here's a tax tip for you; even though you may have little or low income, file your income tax return for the following reasons;
- To recover any overpaid taxes or other source deductions
- To take advantage of Federal and Provincial refundable tax credits
- To create contribution room in a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA).
If you file a return you won’t miss credits or benefits such as GST/HST tax credit, Child Tax Benefit and Trillium Benefit. Don't miss out on benefits you may be entitled to.
Got a question? Reach out in the comment section below!
Happy New (Fiscal) Year to Hamilton’s small business owners and entrepreneurs. Enjoy a safe and happy holiday.
[12/28/18] To all you hard working entrepreneurs and small businesses in Hamilton, I hope you are enjoying this week relaxing with your friends and families. And if the holidays is your busy season, I hope business is prosperous!
Enjoy the holiday season with your loved ones and have a successful year ahead! Season's greetings to you and your family!
Are you giving your business a gift this year? One idea: stress free, reliable accounting! :) Get in touch to learn more about my custom-tailored services.
#TipTuesday - If you are self-employed or a sole proprietor, you can claim your home office expenses if it is your principal place of business used for earning income more than 50% of the time. Feel free to reach out if you want to learn how to calculate what deductions you can make.
Great read. My favourite tip: “seek out other business owners (especially female owners!) as resources”.
nbcnews.com In honor of Small Business Saturday, women entrepreneurs talk about the importance of speaking up, being resourceful and knowing their value.
Who prides themselves on keeping organized records throughout the year? It can be tricky to get into the habit but once you do it will make tax time a breeze. Wave Accounting is my go-to recommendation for small business owners. Feel free to share what other tools you use to keep your finances organized.
Want to avoid trouble with the CRA? In my experience, there are two specific reporting issues that can get a small business owner in trouble with Revenue Canada: Claiming Vehicle Expenses and Home Office Expenses. Reach out if you want help making sure you are reporting correctly!
#TipTuesday - Don’t miss your deadlines! Missed deadlines are particularly harmful to Small Business Owner’s. If you are self-employed or a sole proprietor your tax returns must be filed by June 15 BUT any tax owing must be paid by April 30.
One question I see a lot from small business owners is “Should I incorporate?”. One of the advantages to think about is that incorporating can potentially reduce your tax liability. If you want to know what this means for you and your business feel free to reach out!
If the stress of bookkeeping is keeping you from your other business priorities, consider working with a professional. A bookkeeper can manage your accounts receivable, accounts payable, invoicing, payroll and more. Feel free to message me if you have any questions.
Nearly every accountant has a horror story about receiving a box full of receipts from a client during tax season. Not only do those clients risk losing out on available credits and deductions, but failure to keep accurate, or complete records can also be a sure-fire way to end up in trouble
Here are some great tips for entrepreneurs to keep their records organized.
theglobeandmail.com It's nearly that time of year again. And so it's also time to avoid some of the most common, and costly errors
There is an issue that many small business owners can get tripped up by and could cause problems with Canada Revenue: Determining is someone is a contractor or an employee. This article accurately describes the difference between the two so business owners can be considerate before hiring someone; https://www.thebalancesmb.com/are-you-a-contractor-or-an-employee-2948639
thebalancesmb.com Independent contractor vs employee? Learn how to protect yourself from being declared an employee by the CRA and losing your business expense claims.
I get this question now and again, "when should my fiscal year start?" Here's a great article that helps explain how to determine your fiscal year based on your business. https://www.thebalancesmb.com/how-do-i-determine-my-company-s-fiscal-year-397563
thebalancesmb.com What is a fiscal year? Why does it matter? How do I determine the date for my company's fiscal year end?
I love the fall. Is it just me? Or do you love to go to fall fairs too? I'll be ringing in the first fall weekend at Turner Park, they're hosting a fall fair that starts today at 11 am. Hope to see you there~
hpl.ca Everyone is invited to the Fall Fair!
Susan Ivanovics, CPA
ARE GIFTS OR INHERITANCES TAXABLE?
There is NO "gift tax" in Canada. Any resident of Canada who receives a gift or inheritance of any amount from almost any source (except from an employer) will NOT have to include it in his or her income. However, if capital property is involved (real estate other than a principal residence, or investments) and is given as a gift, the person who has given the gift will be deemed to have sold the capital property at fair market value, and will have to pay tax on any resulting capital gain. Fair market value is deemed to be the "cost" to the person to whom the shares were given. If money or capital property is given or loaned to a spouse or a related minor child, attribution rules will apply.
Susan Ivanovics, CPA
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Susan Ivanovics, CPA
I am often asked about the capital Gains consequences of selling and purchasing a home for personal and for income. I thought I would share this post on the topic;
Capital Gains and Selling Your Home
SELF EMPLOYED & SMALL BUSINESS
June 7, 2013 / Caroline at TurboTax
If you have sold your home recently or are thinking of selling it, you’ll be happy to know that selling your home normally won’t have any effect on your income tax at all.
Generally, you don’t have to pay any tax on your profits from the sale of your principal residence (a property that you own and that you and/or your family live in during the tax year; see the Canada Revenue Agency’s S1-F3-C2: Principal Residence for a detailed explanation of this term).
However, there are several instances where you will have to pay tax on the sale of your home:
• if you’ve used part of the home to produce income or earn income, or
• if your home has not been your principal residence every year you’ve owned it.
Let’s look at each of these situations in turn;
When You’ve Used Part of Your Home for Income
If part of your home has been used as a business or if you’ve rented out part of it, you will have to report your capital gain on the part of your principal residence that you’ve used to produce income.
To do this, you will need to split the selling price and the adjusted cost base between the part you used for your principal residence and the part you used for rental or business purposes.
The adjusted cost base is the cost of a property plus any expenses to acquire it, such as commissions and legal fees.
How do you know how much to assign to each side of the split? The Canada Revenue Agency leaves that up to you, saying that “You can do this by using square metres or the number of rooms, as long as the split is reasonable.”
The Canada Revenue Agency provides a step-by-step example of how to dispose of a principal residence partly used for earning income (T4037 – Capital Gains).
Claiming Vehicle Expenses for Business
When using your vehicle for both personal and business. To claim vehicle expenses for a business you will need to keep records of the km used, this means you will need to purchase a log book for tracking KM (you can purchase from staples: Vehicle mileage log book). You will need to provide the OD reading in the log (how many km when you first started to using it). Record all of the km you used at the end of the month, you will need to do this per month. Only record in the log book the Km you used for business. At the end of the month, compare the total number of km used to the amount of km used for business, for example:
A total of 50,000 km were used in one month period and 18,000 was used for business. Then I would take the 18,000 / 50,000 = 36% and that would be the amount of vehicle expenses you can claim (36% of total vehicle expenses).
You will be able to claim: License & registration
Maintenance & repairs
Not all, but 36% of those costs (for example). This method is OK with Revenue Canada as long as you are keeping accurate records backing up the expenses.
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