Passing the Buck

We have all heard this: “you are the sum of all your learnings and experiences.” And, of course, some are good and some are bad. In the words of Downton Abbey, “We all have stories that should remain unpublished.”

Everyone’s daily interactions can be affected by our experiences. Thank you, excuse me (Polite), Boom, get r done (motivation), Jean, Bob, Jaafar (Facebook friends) and so on. Along the way, everyone will have moments where a person has made a comment, “good or bad,” that stuck and became embedded into our memory that regularly helps in daily life.

For everyone it’s different, but we all have one two or more of these moments. Mine was like this. It was a cold and windy evening, the temperature outside was minus 15 degrees, well not really, but it sounded better to start like that.

Shortly after graduating, my first job in accounting was working as a night auditor for Holiday Inn Hotels. Not the cream of all jobs, but for my first, working alone, at night, and being my own boss, it was as good as it gets. I was required to do all tasks related to reconciling the hotel books, as well deal with guests during the hours of 11:00 pm until 7 am each shift. No typo, I started late and finished early. The guest list occasionally included rock stars, so I became a quick study to developing rules to manage them without having to call the police.

Later, in a regular workweek, I arrived for my shift a little tired due to not sleeping, as I should have, during the day. The hotel had been busy and with busy comes “busy errors,” not to fear as Super Night Auditor (this was an award I had won) was on the job and balancing the books was my forte. The late night to early morning arrived fast, and to my dismay, I was not balanced. Not too concerned, as the hotel accountant would be in at 9 am and while I had never left him an unbalanced night before, “what could it hurt?” I thought.

At 7:05 am, the Hotel General Manager arrived and I was obviously displaying facial stress, as his first words were. “Not balanced yet?” Damn it, now what am I going to do? “No, not balanced, but I thought I would leave it for Ben” (day accountant). “Hmmm,” he said “Isn’t balancing the books, your job?” Damn it, he was right. I stayed an hour longer, found the error and realized very early in my career that passing your responsibilities is not how you advance, and it certainly is not how you earn respect from others.

 

PRESCRIBED INTEREST RATES — SECOND QUARTER OF 2014

 

 

The prescribed interest rates for the second quarter of 2014 were released by the Canada Revenue Agency on

March 12, 2014. Except for corporate taxpayers’ rates for interest on pertinent loans and indebtedness (which will be

4.89%), the rates remain unchanged from the first quarter of 2014 and are noted below.

● 1% to calculate a deemed interest taxable benefit on subsidized employee and shareholder loans;

● 1% on refunds of income tax overpayments paid to corporate taxpayers;

● 3% on refunds of income tax overpayments paid to non-corporate taxpayers; and

● 5% on payments of overdue income taxes, insufficient income tax instalments, unremitted employee source

deductions, CPP contributions or EI premiums, and unpaid penalties.

These rates will be in effect from April 1, 2014 to June 30, 2014.

A listing of the prescribed interest rates for each quarter, dating back to 2000, is reproduced at ¶300 and under “Quick

Links” in the Canadian Tax Reporter on DVD and online

TAX FREE MONEY LIST

Damages or compensation for personal injury, including structure settlements and awards form a provincial Criminal injuries Compensation Board

Lottery or other gambling winnings, could make you millions tax free richer if you can pick the right numbers.

Television game show prizes, even if you trained to develop an expertise in the subject matter.

Gifts (provided they are not diquised employment income or business income)

Gain on the sale of your personal residence so long as you do not repeatedly buy and sell in a manner that would constitute a business.

Certain allowances, such as car allowances at prescribed rates set by Revenue Canada.

Two non-cash gift awards worth up to $500 per year, and two non-cash awards worth up to $500 per year, subject to certain conditions.

Board and lodging at special work sites or remote locations.

1. Social events costing up to $100 per employee and available to all employees.

Employee discount on merchandise and subsidized meals, normally not below the employer’s cost.

The cost of required dress code for employees.  This would apply to uniform style attire.

Damage for breach of employment contract before it began.

T2200

For most people a T2200 is a foreign tax form.  To see if you qualify to get a T2200 you must review your employment arrangement and see if you incur any otherwise deductible expenses in the course of your employment that your employer does not reimburse you for.  i.e. home office, automobile, travel and entertainment of customers.  If you incur these types of expenses in the course of earning employment income, let your employer know and subject to conditions you now have a tax savings in hand.

Winner’s secret

Results? Why, man, I have gotten lots of results! If I find 10,000 ways something won’t work, I haven’t failed. I am not discouraged, because every wrong attempt discarded is often a step forward…. – Thomas Edison

How to save your money on tax prep

Organize your receipts by expense category. It will save your tax preparer’s time and the benefit is all for you. No receipts no expenses.

top secret of successful business leaders

They treat their employees like their own family members.

Why empower your employees?

Why empower your employees?

Deducting Motor Vehicle Expenses

Do you use your car to earn business income? Please keep an accurate logbook of business travel maintained for the entire year. You can deduct motor vehicle expenses when they are reasonable and you have receipts to support them. To get the full benefit of your claim for each vehicle, keep a record of the total km you drive and the km you drive to earn business income. For each business trip, keep a log listing the following: date, destination, purpose, and number of km you drive.

Children’s Art Tax Credit

 

Do you have children?  If yes, did you know about the Children’s Arts Tax Credit?

The children’s arts tax credit and the children’s fitness tax credit allow you to claim a 15% non-refundable tax credit on an amount up to $500 per child per credit on the fees you’ve paid in 2013 to register a child in a prescribed program of eligible activities. This can give you a credit of up to $75 per child per credit. 

HOME OFFICE EXPENSES

Do you work from home?  Make sure you know the guidelines for deductible home office expenses!

The Canada Customs and Revenue Agency (CCRA) Interpretation Bulletin IT-514 outlines the guidelines dealing with deductibles of home office expenses. Make sure you know which expenses can be written off against business income and that you satisfy the necessary criteria before claiming any deductions.

The Home Office

The home office is defined as the location where the individual principally performs their business (i.e. at least half of the time), OR the office is used exclusively for the purpose of earning employment income (in other words, no personal use) and on a regular and continuous basis for meeting clients.

What you can write off

If the criteria for a home office are satisfied, you can deduct housing expenses up to the limit of your business income. In other words, you cannot use home office expenses to create a business loss. However, home office expenses that cannot be used in the year can be carried forward and deducted from income in future years.

Eligible expenses

Home office expenses include the pro-rated portion of:

• Rent

• Minor repairs and maintenance

• Cleaning materials

• Utilities such as heating and lighting

• Capital cost allowance (CCA)

• Property taxes

• House insurance

• Mortgage interest

As a self-employed businessperson, you are allowed to deduct a portion of your mortgage interest for home office expenses. Beware of claiming CCA against the fair market value of your home. While allowable in theory, it is seldom desirable since it can impair your claim for principal residence exemption, meaning you’ll end up paying additional taxes when you sell your house.

You should also keep in mind that some office expenses are fully deductible, such as those that are used entirely and exclusively in the activities of the home business. Examples include supplies, the cost of a separate fax and phone line, furniture and computer equipment used solely in the operation of the business.

Other expenses are claimed proportionately, as a ratio of business to non-business use. For example, if your house is 1000 square feet and your office is 100 square feet, you can deduct 10% of mortgage interest and insurance costs as an eligible home office expense.

As with all tax matters, the key is to keep accurate records so that you’ll be able to provide good documentation in the event of an audit