Numetrica Cloud Accounting

Numetrica Cloud Accounting

By Numetrica CityBusiness
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Numetrica Cloud Accounting episodes

  • 11 Tax Deductions that Start ups can not afford to miss.

    Journey from Inception to Success

    It is extremely important for start-ups, entrepreneurs and

    even business pros to keep track of their business expenses. These expenses
    will reduce your taxes when it comes to file your personal tax returns (t1) or
    corporate tax returns *T2).  When tax
    season starts the deductions will help and forms your strategic plans to
    perform tax planning, maximize tax deductions and minimize tax owing. So here
    are some categories that already exist. All you have to do is take advantage of
    any or all of the following expenses that apply to your business.

     

    Startup costs

    Startup costs are the initial costs that you have made.  Which includes:

    ·       

    Incorporation fees,

    ·       

    Franchise fees and purchase of an existing
    business or assets,

    ·       

    Opening your business location,

    ·       

    Market research and analysis,

    ·       

    Business plans write ups,

    ·       

    Marketing and advertising,

    ·       

    Employee training,

    ·       

    Professional fees, such as lawyers, accountants,

    ·       

    Initial travel expenses

    ·       

    Website development

    ·       

    Assets roll-overs to the business

    ·       

    Goodwill

    ·       

    Home office expenses

    Numetricacity.ca


    4 min
  • 5 deciding factors to choose the best tax professional

    5 deciding features in selecting a professional to prepare your personal tax

    return (T1)

    Consider

    these factors when you are looking for a tax professional, please get a
    professional to help you if your taxes are complicated.

    1.                  

    Education and training

    There are different levels of professionals who prepare tax

    returns. Some are CPAs meaning they are university graduates who have passed
    the rigorous CPA exams. None designated accountants who have graduated from
    college or university but have taxation knowledge. Lastly, there are
    individuals who have some basic training in preparing a tax return or have
    learnt to use taxation software to prepare returns. More education and training
    definitely means more competencies.

    2. Experience.

    In any professional fields, experience is extremely important.

    Generally, a professional with 20 years of experience can help you more in
    comparison with less experienced professional. In my experience, when I’m asked
    with a tax question, I can provide the answer right away and don’t need to
    research it, meaning less time spent on clients file. Time is money. Experience
    is also provides the preparer with a high level view on the preparation of the
    tax returns, meaning strategies can be built.

    3. Complexity of the tax return

    Some tax returns are more complex than other. There may be

    interest income, stock trades, rental properties, foreign income, disabilities,
    tax splitting, employment expenses, Use of home, use of auto, or
    self-employments, ensure to ask about a tax professional’s experience and
    knowledge related to your particular tax situation to ensure they will be able
    to handle your return. We prepare all the above and also prepare corporate
    taxes (T2) and SRED (scientific Research and Experimental tax return) and also
    trust returns (T3).

    4. Relationship

    Trust and relationship makes a big difference. Find a CPA to

    prepare your taxes and try to stay with them during the year and especially if
    you are self-employed so you can keep asking then on an ongoing basis. Most of
    our client’s text, email, phone us with questions concerning their business
    activities. Establishing that relationship with a CPA can help make the process
    easier year after year. Read the testimonials on our website (www.TBCO.ca
    and www.Numetrica.city) and
    judge for yourself. We have cemented a strong relationship with our clients in
    Ottawa and pride ourselves as one of the best tax preparation service provider
    in Ottawa.

    5. Fees

    There is a big cost difference between hiring a tax preparer.

    Also remember that is there are mistakes you are paying the interest and
    penalties and not them. Additionally more experienced professional can also
    save you more in taxes. Remember you are paying for the quality.

     

    Definitely put us to test for the features mentioned above and

    see how we stack up when it comes to tax preparation services in Ottawa. In
    fact, mention this article and we review your prior year tax return totally on
    the house to see if something was missed or overlooked.

    For more information call us at 613 266 7013

     

    4 min
  • Tax Matters for Dentists

    As a dentist running your own practice in

    Canada, tax planning is an important part of managing your finances. Your
    choices about business structure, deductions, income smoothing, and retirement
    savings accounts can significantly impact how much you pay in taxes each year.

     An optimized tax strategy can lead to

    substantial savings over your career. Before delving into key options around
    your taxes, consult with both a tax professional and a financial advisor to
    ensure coordination. Tax rules can differ by province, so be sure to understand
    both federal and provincial regulations that apply to your practice.

     Let’s take a closer look at some of the top

    dentist tax planning realities in Canada – and how you should approach them to maximize
    your savings.

     

    Dentists in Canada have two main options

    for how they structure their practice, and this choice significantly impacts
    how they file their taxes:

    If you operate as a sole proprietor, your

    dental practice's income and expenses are reported directly on your personal
    income tax return (Form T1). This means your business income is combined with your other personal
    income sources and taxed at your personal income tax rate.

     

    As a sole proprietor, you can deduct

    eligible dental expenses like equipment, instruments, professional development
    costs, accounting fees, RRSP/TFSA contributions, and more. However, you need to meet certain criteria to qualify for
    some write-offs. Consult a tax professional to maximize savings.

    If you set up your dental practice as a

    corporation, it becomes a separate legal entity. You file a corporate tax
    return (Form T2) for the business income and expenses. The after-tax profits can then
    be paid out to you as dividends, which are taxed at a lower personal rate.

     

    Incorporating also opens up additional tax

    deferral strategies. As an employee of your corporation, you receive a taxed
    salary on your T1 return. You can optimize your salary to minimize combined
    corporate and personal taxes. Speak to an accountant to model out your best
    option.

     

    As a dental hygienist in Canada, you can

    deduct a wide range of dental expenses related to your profession on your tax
    return. This is a great way to help you save on your tax bill. Some common
    expenses that can be claimed include:
    Dental instruments and equipment - You can deduct costs associated with dental tools, machinery, and
    protective gear required for your work. This includes items like scaler tips,
    face masks, gloves, sterilization equipment, etc.
    Professional development - Fees for
    conferences, courses, textbooks, travel, and other costs related to expanding
    your dental hygiene knowledge can be written off. However, be aware of CRA
    rules around taxable benefits.
    Accounting services - The fees you pay
    for accounting help, tax planning services, financial advisory, and filing your
    tax return can also be deducted. Using professionals ensures accuracy and
    optimisation.
    Contributions to RRSP & TFSA - Any contributions to your Registered Retirement Savings Plan or
    Tax-Free Savings Account can be subtracted from your annual taxable income.
    This is a great way to save and prepare for the future.

    When claiming deductions, be sure to keep

    detailed receipts and records to support your claims. Consult the CRA
    guidelines and connect with a tax professional to ensure you maximize savings
    opportunities and file appropriately based on your self-employed status.

     

    Self-employed dentists are taxed at their

    personal marginal tax rates, which are progressive based on income level. Canadian personal tax rates range from 15% on the first $50,197 of taxable income up to 33% on
    income over $221,708.

     

    Incorporating your dental practice opens up

    tax planning opportunities, as the first $500,000 of active business income is
    taxed at a flat 9% small business corporate tax rate. Income splitting with
    family members and tax deferral strategies may lower your overall tax burden.

     

    3 min
  • F Dividends

    Forget dividends, it is a trap!

    John is a lawyer and asked me to review his financial
    statements. While I was reviewing the income statements, I noticed that the
    total salary for the 12-month period was 45K.

    I looked in more detail on his corporation QuickBooks

    Online (QBO) file and notice his salary was at 22K.

    I looked at John and said, you made less than your

    receptionist?!
    His response was Moe I’m growing the company.
    I said totally wrong but explain your rational.
    He said, I don’t take high salary so I keep more money in the corporation and
    then I can use the money to grow my company.
    We looked at QBO again this time on the balance sheet. Total cash in the
    company was $5K.
    So I said your rational makes sense but wrong since you haven’t saved any
    money.
    I told him, look, you are a great lawyer, and your salary would have been close
    to $200K if you worked an employee for any law offices.
    He further explained that his true rational was to offer his services cheaper
    so that he can expand his client base and eventually be more profitable.
    I said so how about your own income? With $22K can you live?
    He said oh that is easy, I’ll take dividends.
    I said that is BS, there is no income, cash or retained earnings.
    I also told him he is better off closing the corporation and work for a lawyer.
    This way he can make 10 times the salary.
    So true by closing the corporation his salary would be $200K and we would have
    10X his income.
    I would have lost a client, but it is ok, I love to help people increase their fortune.
    The focus is on them and not me.
    I actually told him, and he was shocked, and he said he loves his practice and
    totally understand the issue now.  He
    said he will follow my advice.
    Unfortunately, this is a trend with other small businesses, even I had this
    rational when I started.
    We all assume that offering cheaper services would get us more leads. Being
    cheap would give us the advantage.
    Basically, becoming cheap, becomes our marketing strategy.
    So, I said John, being cheap and cheapest will makes you go bankrupt since that is how people will judge your service and you may win the race of becoming the lowest price lawyer and eventually go out of business.
    My advice to my clients is to keep a few things in mind.
    Find your company’s hourly charges.
    You play 2 roles in your business; one is the owner and the other one is the worker/operator.
    The worker/operator should be payroll and get paid for the hours that he is doing the work which is at par with industry or even higher if you think you are an experienced person.
    For example, for John at $200K per year salary, his hourly rate should be $200,000 divided by 12 months = ~ 16,666 per month.
    $16,666 divided by 150 hours per month $111
    So John the business owner, let’s call him John Inc. should charge his clients
    enough hourly rate that John the employee will receive $111 per hour. John the
    employee MUST be paid salary regardless of John Inc. strategies. This is the key.
    Then the next part is we want John Inc to be profitable, we want him to have at least 25% net income.
    So we reverse engineer this part.
    We need to calculate admin and office expenses and come up with a ratio.
    I this case, let’s say the magic ratio is 40% So we know that he needs to pay $111 per hour to the employee and has also 40%
    other costs.
    So revenues – 40% of revenues - $111 = 25% of revenues
    .35% Revenue = $111 this means the hourly rate to charge a client should be at least $111/.35=$317
    In our case, John was probably charging clients at $150 per hour, hence after
    paying the office and himself he had almost nothing left.
    Fast forward our case, by the way John is not an actual name, but this is a true case only the name is changed to protect the innocent. we put John on payroll,
    we use Wagepoint for payroll.
    Wagepoint,
    pays the employee through direct deposit and pays CRA the source deductions on
    time, files ROE and prepared T4s and records the journal entries in QBO

    2 min
  • Hour 1 of Ottawa Now for Thurs. November 16th, 2023 interview with Moe Tabesh

    Here is my interview with Kristy Cameron about the CEBA LOAN on CFRA.


    Consequences of businesses getting closed if they don't pay the CEBA loan.

    Ottawa-based accountant Moe Tabesh has started an online petition that is quickly gaining traction. With over 13,000 signatures already, he is calling on the feds to consider forgiveness for unpaid CEBA loans. At the very least, Moe wants the Trudeau government to entertain a negotiating process with Canadian businesses who are struggling to find the money. He joins Kristy Cameron to explain further
    https://chng.it/rYSRm8JbQ7


    https://www.numetricacity.ca/





    34 min
  • CEBA Loan and what we can do about it.


    As a business consultant, I have witnessed firsthand the struggles of my clients who have borrowed funds through the Canada Emergency Business Account (CEBA) to keep their businesses afloat amidst the economic turmoil caused by the pandemic. These are hardworking individuals who contribute significantly to our economy, yet they find themselves unable to repay these loans due to continued financial hardship.
    The CEBA was designed as a lifeline for small businesses during an unprecedented crisis. However, with over 800,000 approved applications and nearly $35 billion disbursed as of January 2021 according to data from Export Development Canada (EDC), it has become clear that many businesses are still struggling and may not be able to repay these loans.
    We must remember that behind every business there is a person or family whose livelihood depends on its success. The inability to repay these loans can lead not only to financial ruin but also immense personal stress and anxiety.

    Nearly 900,000 businesses were approved for the program, which distributed just over $49 billion in loans. About a fifth had paid their loans in full by the end of June.

    According to a recent survey, 16 per cent of CFIB member businesses said they would be seeking an additional loan from their financial institution to meet the forgiveness deadline. Another 9 per cent said they were considering using home equity to help pay off CEBA on time.
    Therefore, we call upon our government representatives and relevant authorities for compassion and understanding in this matter. We urge them to consider loan forgiveness for CEBA borrowers who continue facing financial difficulties despite their best efforts. By doing so, we can help ensure that our local economies remain vibrant while supporting those entrepreneurs who have been hit hardest by this crisis.

    https://chng.it/VJ82wKQW2m


    https://www.numetricacity.ca

    12 min
  • Salary, Dividends, Due to/from shareholder, Draw - What form of income should I take out?

    Salary, Dividends, Due to/from shareholder, Draw - What form of income should I take out?


    Which is which?

    Which is better?


    One thing for sure, don't go for dividends unless you know what is going on.


    Most business owners debate about taking salary, dividends, draw and so on.

    In this episode, we talk about how much money to draw at a minimum in a form of salary 

    What to watch our for making draws from the company and section 15 of Income Tax Act (ITA) 

    Also what is your plan, do you plan to count on Canada Pension Plan? 


    Numetrica


    .

    14 min
  • 11 Tax Deductions Every Startup Should Know About Specially The Initial Investments

    Eleven Tax Deductions Every Startup Should Know About Specially The Initial Investments

    It is extremely important for start-ups, entrepreneurs and even business pros to keep track of their business expenses. These expenses will reduce your taxes when it comes to file your personal tax returns (t1) or corporate tax returns (T2).  When tax season starts the deductions will help and forms your strategic plans to perform tax planning, maximize tax deductions and minimize tax owing. So here are some categories that already exist. All you must do is take advantage of any or all of the following expenses that apply to your business.

    Startup Costs

    Startup costs are the initial costs that you have made.  Which includes:

    • Incorporation fees,
    • Franchise fees and purchase of an existing business or assets,
    • Opening your business location,
    • Market research and analysis,
    • Business plans write ups,
    • Marketing and advertising,
    • Employee training,
    • Professional fees, such as lawyers, accountants,
    • Initial travel expenses
    • Website development
    • Assets roll-overs to the business
    • Goodwill
    • Home office expenses

      • SRED (read as SHRED) or SR&ED Scientific Research and Experimental Development Tax Credit


      Accelerated CCA Calculations

      Professional Fees

      Home Office

      Home office expenses include almost any of the physical costs of running an office, such as interest mortgage, property taxes, lease costs, utilities, office supplies, cleaning services and internet fees, home phone. However, there are specific rules for you home space to qualify as a legitimate home office. A home office must be a principal place for doing business and a site that you use on a regular basis.  To calculate the costs, for some it is very straight forward, for example if WIFI is used for the business significantly then it is 100% expensed however for others, what you need to do is measure the total area of your home and your office.  Obtain the percentage for home office, ie, 20% then 20% of your home costs can be expensed. One more note, create a habit of calculating these costs on a monthly basis and sending an expense report to your company/corporation and get reimbursed.  To make this easy for our clients, we have created an excel template which includes a lot of possible items that could potentially be used in the business. When they had the data, the spreadsheeted gives them the total and calculates the HST.  This practice also creates a great audit trail in case CRA is asking for details of home office expense.

      Sub-contractor Costs

      Software Subscription Fees

      Any software subscription fees that you are using in your business can be written off. For instance, Microsoft, antivirus, QBO fees, Receipt bank fees, google G Suits, …

      I suggest that you go through your credit card statements and flag fees that you are uncertain and tell us what the fees are for. We will have a look and can tell you if you can claim them or not.

      Holiday Parties

      Travel

      Travels in relation to running, managing, and growing your business is considered tax deductible. I.e., driving to see your accountant, lawyers, marketing expert, going to the bank, post office, network parties, trade shows, seminars … you can also claim the miles you drive to meet clients and for other business purposes.

      Marketing and Advertising

      Banking and Interest Expenses


      Numetrica

      20 min
    • HST a comprehensive Overview

      HST is a topic that many entrepreneurs are interested in learning more about, and it's confusing for them. Our host will talk about HST in this new episode of the Numetrica Accounting and Business Podcast.

      What is HST?

      HST is a service tax that we charge for our services and products. The number one thing you need to know is there's a threshold. If you ever go over $30,000 in your invoices or product sales, you have to charge HST. Whenever you're registered, you have no choice. Even if you make no sales, you have to report your HST. If you were a startup, you probably paid for some services that you needed to operate your business or open your business. You paid professionals like lawyers, accountants, and you bought equipment. You will get those HST back. The HST that you have paid out is the ITC portion.

      If you had sent an invoice for $1000, there was $130 of HST. Before your sales were $1,000, your sales were $1130 because that 130 you are not eligible to either pay or collect becomes income—same with your expenses. You paid someone $1,000 for their service, and there was an HST on that. So before, your expense was $1000, but because you were not allowed to pay, your HST becomes $1130. It's extremely important in your business to pay attention to your HST, your payroll, and your business numbers.

      Examination

      What they need from you is your ten highest invoices, which you would send to them, your GL listing, that's the list of every HST that you've collected or paid. You get this from your accounting software, and when they review this, hopefully, everything is good, everything matches, everything ties in, they're all legit, so you get your refund.

      Cash Flows

      One of the things that I advise clients to set up a savings account. Most banks notice and call it a trust account because you want to park their money there. And the way CRA looks at HST, they would say this is not your money, and this is the money you're collecting on behalf of us. Many people look at that HST as I sent the bill for $1000 and I got $130 HST so my income is $1130. No, your income is $1000. That HST belongs to the federal government or provinces because HST means Harmonized Sales Tax. So the mixed GST and HST portions are provincial, and a portion of it is federal.

      Register for HST

      Whenever you register for HST, you get letters from CRA. They’ll say thank you for the registry, this is your HST, this is your filing period, and these are your codes. They give you four-digit codes, you put in the four-digit code, and you can file it.

      HST could be “I just want to make a payment.” The other one is, I'm going to file my HST and I'd make a payment, or one of them would say, I want to make airier payments. The other one is GST payment only, and this basically means this is current, or you could even sit as installments. The other one is HST Return Payment. With this one, you can file and make payments. You probably get three pages of options because there are so many things that corporations can pay to CRA.

      “Am I supposed to charge HST on this or not?”

      You can call number 1-800-959-8287. An experienced CRA HST staff answers this, and they're very knowledgeable. You ask them a question; they give you the answer right away because they're the experts in HST.

      Two methods for HST

      There's the quick method of HST and the standard or accounting method of HST. Some companies should file on quick method, mostly IT consultants. On the quick method, it says, "I have a few small expenses, but I'm not going to calculate all of this HST." So the CRA will tell you that whatever HST you have is no longer eligible for an ITC. We get 88 percent of the HSC that you collect. You can only claim an ITC if you purchase a capital asset.


      https://www.numetricacity.ca/

      33 min

    About Numetrica Cloud Accounting

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    Talking about small business accounting , accounting apps, business management, profits, HST, personal and corporate tax, advantages and disadvantages.