Business Matters April, May, August and October 2020

Dear Client:

Attached are the April, May, August and October 2020 editions of Business Matters. We are behind in providing these articles – blame it on Covid-19!

April Edition - Read Here

Buying a Business doesn’t happen very often. When it does you need to consult professionals to represent your interest in the transaction. How best to structure the purchase, shares or assets, due diligence, etc. Read the article and then consult your advisors.

Voluntary Disclosures Program (VDP)

Very informative article about the VDP, the different programs available under the income tax and GST streams, what the programs will cover and a brief summary of recent court cases. Full information available at the website address listed at the end of the article.

Blockchain is the subject of the technical article in this edition. There is lots of buzz about Blockchain but we still haven’t seen any use amongst our clients. Something to monitor and assess as it moves forward and evolves.

Babies?

Haven’t seen many articles about babies in Business Matters but of course it’s cost that is being discussed. Personally, I have never really felt that these types of articles were very useful. The cost to raise a child will vary significantly depending upon the lifestyle of the family, where the family lives, how many activities the children are involved in, etc. Given all the variables, I’m not sure a figure of $X/child makes much sense. Lots of good, general information.

May Edition - Read Here

There were lots of scams before Covid-19 and the fraudsters certainly have not let up in the last few months. Good article on common Covid-19 Scams. Make sure to read the information listed under “Protect Yourself” on page 2.

Taxation

This article is all about Covid-19 federal government support. Most of this is very old news at this point in time but the Canada Emergency Wage Subsidy is still worth considering.

Manitoba has a wage subsidy program worth a look – https://www.gov.mb.ca/covid19/restartmb/btwmp.html

The Tech article is all about digital and electronic signatures. We are still not using either but we probably should be. Don’t know the difference between digital and electronic?  Read on! Good detail in the article.

The final article in the May edition is a brief overview of what happened to investments during March and April. Sharp decline and then a recovery.  The experts were right – don’t panic, bide your time.

August Edition - Read Here

Nothing strikes more fear in the heart of many individuals than the words “U.S. income taxes”.  If you are a U.S. citizen you must file a U.S. federal tax return. Don’t forget the FBAR form.

Corporations must file U.S. tax forms if they are “physically present” in the U.S.  Best advice – consult a professional that specializes in U.S. taxation.

Update on Covid-19 Assistance

This article is a little out of date. Some of the assistance programs mentioned have ended or “transitioned” to different types of assistance. Small businesses should review the programs still available. Questions ?  - Please contact us. Remember there is wage assistance available through the Manitoba restart program.

The Tech article is very topical – Preserving Security While Working Remotely. I found the article to be quite informative. Covid-19 has not forced our office to work remotely – we have been very fortunate. Who knows where we will be 6 months from now!

Wealth Management

Do you know how much you spend each month, each year? Many clients are surprised when we review their personal tax returns each year and show them in black and white the gross amount of their family income. “Where did it all go?” they will ask.

Review your spending/saving, revisit your investment plans and consider end of life financial issues. It’s not complicated – it just needs to be done.

October Edition - Read Here

The management article is all about “winterizing” your workplace against the effects of Covid-19. It could be interesting if we have a “bad” flu season. I think clients have done a very good job of adapting so far. Keep communicating in a straight forward, honest manner with staff.  Read on!

Whole Life Harmony?

Have to admit this is a new term to me. The article indicates that there are eight chords or facets of life that should be in harmony. The article goes on to define harmony and list the 8 facets. Hmmm… I like the 6 points listed on page 4. Running through the points should give you a good snapshot of where you are at. You have to start somewhere!

Taxation

It’s another article about U.S. Taxes for Individuals. This time the focus is on “Accidental Americans” which is something you do not want to be when it comes to taxation. However, there are some definite advantages to being a U.S. citizen. Check out the article.

Wealth Management

Interest rates are at record lows – is it time to borrow to invest? Borrowing to invest is what this article is all about. There are some good points in the article. What is your ability to take risk and what is your willingness? These questions must be answered for leveraged investing. They also should be answered when you are thinking about whether or not to start a business.

It has been a great fall, weather-wise – not so much Covid-19 wise. We hope that everyone in your “bubble” is healthy and optimistic as we move forward.

Happy Thanksgiving and all the best!

Jim M. Smith, CPA, CA

JIM M. SMITH CHARTERED PROFESSIONAL ACCOUNTANTS INC.

Business Matters February 2020

Dear Clients:

Attached here is the February, 2020 edition of Business Matters.

Topics discussed in this edition include:

1)      Cyber Security – Mitigating the Risks of Cyber Attacks

2)      Your Credit Score – What does it Mean?

3)      Protecting Your Business from Identity Theft

4)      Tax and Ethics

Lots of good information in each of the articles.

It looks like we could enjoy an early spring this year – let’s hope the snow stays away!

Remember it is personal tax time!  If you have not already done so, please drop off, email or mail your information to our office. Please contact our office if you have questions.

Best regards,

JIM M. SMITH CHARTERED PROFESSIONAL ACCOUNTANTS INC.

Jim M. Smith, CPA, CA

Business Matters February 2019

Dear Client:

Attached here is the February edition of Business Matters.

Taxation

First up is an article outlining income tax changes for 2018. There are very few personal tax changes. The changes affecting companies have been discussed for some time. The takeaway from this article at this time of year should be organize your income tax information and forward it to us before April.

Management

The SCARF Model is something relatively new to us (the book, Your Brain at Work, was recommended at a seminar last fall). Be prepared to spend some time investing in the “process” of understanding how people react the way they do.

Do you or Don’t You?

Do you or don’t you have a Will?  How old is your Will? Has your family situation changed? What about your assets? A well thought out Will is one of the best gifts you can give your family.  Read on.

Privacy Compliance Strategies for Businesses

In an era of hacking and data breaches it is important for businesses to have a compliance strategy for Canada’s privacy laws. The six points listed on page 8 are an excellent starting point.

That’s it! Questions – contact us. We love interactions with clients.

Winter is over (almost). It’s time to enjoy some warmer weather and longer days.

Best regards 

JIM M. SMITH CHARTERED PROFESSIONAL ACCOUNTANTS INC.

Business Matters News

Dear Client:

Attached are the October and December issues of Business Matters – sorry for the delay!

OCTOBER 2018

Taxation

Very interesting discussion about higher CPP contributions which are being phased in over seven years starting in 2019. The impact will be significant for companies with larger payrolls.

Something to consider. Payments to employees from profit sharing plans are CPP exempt. Perhaps there is a profit-sharing plan in your company’s future especially for employee bonuses. Contact us to discuss.

Management

How do you maintain safety in the workplace? Most employers take employee safety seriously and safety awareness has increased substantially over time. This management article provides an outline concerning how to conduct a proper safety inspection – quite detailed. Don’t forget to document and follow-up.

Investing

The investing article is all about self-directed investments – advantages and disadvantages, types of accounts and the “catch-all” category other considerations.

If you do choose to go self-directed, be willing to spend some time on investment analysis, review and tracking of income and expenses.

Moneysaver

We have definitely heard a lot about the High Cost of Stress over the past number of years. For the most part, in business, we don’t deal with people suffering from extreme stress but some level of stress will be present in the work place everyday on an ebb and flow basis.

“Controlled” stress can be healthy and some people perform best under certain levels of stress – others do not. In your business do you know which staff are which in terms of stress tolerance?

DECEMBER 2018

Technical

Not every issue of Business Matters has a tech article but The Path to Automation is well worth the read. Canadian businesses need to automate (our productivity lags).

Automation is becoming more feasible for small businesses. Think about how automation could help your business – see the points on page 2.

Taxation

Does your business include “bartering” transactions? Do you sell goods or services using the internet on more than a casual basis? The taxation article discusses tax implications (GST, HST, income tax) of bartering and internet sales. It does not discuss PST but it probably should.

Moneysaver

Detailed article outlining how to “job-cost” your equipment and vehicles.

Whether it pays to job-cost your vehicles/equipment will depend, to a large extent, on how many dollars you have invested. The larger the investment the more worthwhile the exercise. Quickbooks or Sage can help you track costs.

Management

No business likes to lose clients but it happens. Check out the article Eight Reasons Clients Leave.  I don’t think there are any surprises in the list of reasons provided in the article. Complacency needs to be avoided – how do you stay “fresh” in your workplace?

Last but not least, we have attached a one-page memo discussing a Fixed vs a Growth Mindset.  Please read.

We are in the depths of what has been a fairly benign winter season so far. We hope that you enjoyed Christmas holidays. Take time to enjoy some “snow sports” before we lose the white stuff.

Best regards,

Jim M. Smith, CPA, CA

November 11, 2018

100 Years Later - We Remember!

Dear Client:

Attached here is the August/18 edition of Business Matters. A couple of management articles, one tech and one tax. Let’s get started!

Complacency

It is a very natural tendency to become complacent at work, at home, etc. The first management article is about recognizing and combating complacency at work. As managers we have to be creative to alleviate complacency and ensure productivity. Read on for some tips you can use to combat complacency.

Electronic Signatures

We still do not see many electronic signatures in our practice. The time may be coming but it’s not here yet. All you ever wanted to know about electronic signatures in the tech article.

On a different but similar topic, make sure you have multiple signing authorities on business bank accounts.  If something happens to the owner/manager and only he/she has signing authority the business could suffer – a lot.

TFSA Taxation on Death

Good summary of what happens to TFSA’s when a person passes away. The takeaway from this article “there are potential tax complications with a TFSA when a taxpayer passes away.” Your financial institution and Chartered Professional Accountant can provide answers to any questions you may have.

Control = Responsibilities

The second management article discusses what having control of a business means. It’s not what you might think. After the article lists the dire consequences of not being in control of your business, it concludes that a culture fostering processes and procedures within a company that ensures compliance with external rules and regulations is absolutely essential to ensure proper control. Kind of wordy but makes sense.

That’s it for the August edition!

May you have “fair winds and following seas” in the months ahead.

Best regards

JIM M. SMITH CHARTERED PROFESSIONAL ACCOUNTANT INC.

Dear Client:

Attached is the June/18 edition of Business Matters. It arrived on time, but we’re slow in passing on the information. Our apologies. Let’s get started. Click here to read the articles.

Taxation

Really this is an article about potential cash flow issues that can arise if you don’t manage tax liabilities properly. Over the past 20 plus years we have seen many different nightmare scenarios in dealing with Canada Revenue Agency. As the article states “Take Charge” by completing the steps listed on page 2.

The Eyes Have It

The tech article concerns eye strain when working with screens – computers, laptop or smartphone. We’ve all experienced tired or sore eyes on more than one occasion while staring at a screen. Give those eyes a break! See the tech article for helpful hints about relieving the symptoms, eye management, etc.

Websites – Windows to the World

If your business does not have a website – get one. If it does, refresh the site often. Those are the primary take aways from this article. Also, make the website specific to your business. Good article – hey we need to update our website!

Scammers

As the article states “Scams and frauds are probably as old as humanity” but let’s face it – computerization has taken things to a whole new level. The article discusses different types of scams and how to protect yourself. Read on.

That’s it for the June edition. check out past issues on our website at jimsmithaccounting.ca.

Enjoy the rest of summer and your vacation time – hopefully you still have some left!

Best Regards,

JIM M. SMITH CPA INC.

2018 Federal Budget

March 1, 2018

Dear Client:

Attached here is the budget commentary from CPA Canada for the Federal budget introduced on Tuesday, Feb. 27.

There were a few relatively minor tax changes in the budget which are outlined in the commentary. One item that should come as absolutely no surprise to anyone is that the Budget introduced a new tax on cannabis products.

What about those changes proposed in July, 2017 for private corporations? In very  broad strokes there were 3 pillars that comprised the proposed changes:

1.       Income sprinkling. This issue was dealt with by the Tax On Split Income rules that were introduced on December 13, 2017 and went into effect January 1st, 2018.

2.       Reduction or elimination of tax on the disposition of shares in private corporations. The government abandoned any proposed changes in this area. 

3.       Passive/investment income earned by private corporations. As the saying goes “It’s complicated” and that is certainly the case for passive income. The government significantly backed away from its original proposals in this area. Essentially the first $50,000 of passive income will be status quo - no changes. Passive income between $50,000 and $150,000 will reduce the small business limit of $500,000 on a straight line basis. Page 3 on the commentary discusses this change. There are also changes to refundable dividend tax on hand (RDTOH) related to payment of eligible and non-eligible dividends (we said it was complicated). These changes will only affect private corporations that have taxable income in excess of $500,000 and a balance in the RDTOH account and pay eligible dividends (yes, this is a run-on sentence but a very brief one compared to many in the Income Tax Act).

The best way to sum up what has happened to the changes proposed in July, 2017 is as follows (taken from Stikeman Elliott budget commentary).

            Private corporations win 2-1 in quadruple overtime.

It feels good to win but what a struggle!

As always, any questions please contact us.

Best regards,

JIM M. SMITH CHARTERED PROFESSIONAL ACCOUNTANTS INC

Jim M. Smith, CPA, CA

Business Matters Newsletter December 2017

Business Matters December 2017

Dear Client:

Attached here is the December edition of Business Matters (conveniently late so no interference with holidays, the Super Bowl and the men’s curling championship).

Management

It’s hard to escape the term “stress” these days. Combine stress with “workplace” and you have one of the management topics for this edition. The article references changes to Ontario legislation but “most other provinces have or are in the process of initiating” similar legislation to that enacted in Ontario. Don’t become “stressed out” over the new rules- read the article.

Taxation

Yet another article that discusses the ins and outs of RRSP’s.  Very timely given the change in the calendar from January to February.  This article is well written, easy to read and contains loads of good information. Like the old saying for the Participaction program when it comes to RRSP contributions “just do it”.

Technology

I’ve often written that I’m not a techno geek but the article describing WhatsApp really was interesting.  Why wouldn’t a person use this app? Sounds like a great way to encrypt messages. Read on!

Management

The second management article discusses uses for in-house financial statements and uses for statements prepared by your external accountant (that’s us). Not covered in the article are the three different types of reports that external accountants can attach to company financial statements. These are as follows. Notice to Reader (no assurance provided on the figures, minimum input by the external accountant, lowest cost), Review Engagement (moderate assurance regarding figures contained in the statements, lots of questions asked by the accountant, some detailed analysis, moderate cost?) and Audit Opinion (assurance provided on the figures, lots of documentation on accounting systems, testing of systems and balances, many questions, verification of amounts based on professional judgement, most expensive of the three options).  If you’re not sure which option is most suitable for your company just ask

We’re on the backside of winter and any day now the first days of spring will pay us a visit. They will be most welcome.

Kind regards,

JIM M. SMITH CHARTERED PROFESSIONAL ACCOUNTANTS INC.

Jim Smith, CPA, CA

WE ARE MOVING!

Our first day back "home" at 240 Main Street, Winkler location will be July 21, 2017 -  about 11 months since the fire occurred on August 13, 2016.   We are so grateful to all of our clients for adjusting well to our temporary location and welcome you all to the new, updated office at 240 Main. We also wish to thank our general contractor, WBS Construction and numerous sub-trades for their great workmanship and patience with us during the rebuild. We will provide details later regarding our grand opening which will happen this fall.  In the meantime, we are still here to serve your needs. There will be no interruption to our office hours.