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.

Business Matters June Edition

July 13, 2017

Dear Client:

Click here to read the June edition of Business Matters.

The first management article is titled Cannabis 101. Effective sometime in 2018, decriminalization and “controlled” distribution of marijuana will occur. Hopefully this will have very little impact on your business but if you think it will – read on.

Five finger discount is the second management article. Anyone in a retail business will be familiar with this term. Good discussion concerning ways to deter shoplifting in your business. Don’t forget that employee theft can also be a significant issue. This has been discussed in previous articles.

There are few things in life (money-wise) more enjoyable than receiving a tax refund cheque! Of course, we know that the cheque is simply a refund of our own cash but still it’s a good feeling. The taxation article is all about how to reduce or eliminate interest free loans to the government. Read on if you have been receiving refunds and want to keep more money in your bank account during the year.

Using technology tools to Connect for Profit is a definite must these days for many retailers. This article discusses using Wifi for marketing and collecting data on customers (which in turn is used for marketing). Brief but interesting.

That’s it!  Have a great summer!

We are back at 240 Main Street on July 21, 2017. Check out the “new” building under the tab Fire Update or pay us a visit in person. It’s always great to see you

Yours truly,

JIM M. SMITH CHARTERED ACCOUNTANT INC.

Jim M. Smith

Business Matters

July 13, 2017

Dear Client:

Click here to read the April edition of Business Matters (late as usual due to tax season work load).

Tax Planning

The first article discusses the importance of income tax planning for owner-managed enterprises. This is something we deal with on a daily basis. It can be very dangerous to generalize when tax planning – no two situations are identical. There are generalizations in the article. Best advice – rely on professionals who know your situation. Keep them informed and meet with them occasionally to update your tax planning strategies.

Moneysaver

Rising interest rates are a reality in the U.S. and are being talked about by the Bank of Canada. Likely, any increase will be gradual but the bottom is in as they say so an article concerning the potential effects of higher interest rates is very timely. Review all of the points listed under “Proactive Planning”, determine which apply to your situation and consider what action should be taken.

I found the Management article to be very good. All of the items listed are worth reviewing. The paragraph on page 6 that starts with the sentence “Control your business by managing rather than doing” is great. Lots to consider.

The tech article discusses passwords, specifically password management software. I think this is an area in which most businesses are a little deficient. It’s difficult to stay current with technology. It almost seems you have to pick and choose which issues to deal with at any given time. Password manager services are not expensive – that’s a good thing.

As always if you have a question don’t hesitate to contact us. We love to hear from you.

Move-Back Date

We move back to 240 Main Street in Winkler on July 21/17. It’s been great where we are but it will be even better to be back at 240 Main. It’s always good to be home!

Have a great summer!

Yours truly,

JIM M. SMITH CHARTERED ACCOUNTANT INC.

 

Jim M. Smith, C.A.

February 9, 2017

Dear Client:

It’s tax time! Click here to read the latest informative newsletter.

Taxation

The first article lists changes that may affect your 2016 personal income tax return. A significant change is the requirement (for the first time ever I believe) to report the sale of your principal residence on your tax return. The gain is still exempt but you have to report it. So, the rule basically becomes if you sell property of any kind during the year – report it! Read on!

Road Warrior/Technology

Lots of really simple inexpensive items listed in this article to keep you productive while on the road. I’m not much of a shopper but I think we need some of these things! Good article.

Motivation

This is an extremely important topic and one that is studied, discussed, written about, etc. on a continual basis. What motivates us? The article makes a number of very good points and is comprehensive yet easily understood. Well worth the read and the thoughts that will happen while you read.

Face Time

We’ve developed lots of different ways to communicate without being face to face and they all have their place but, really if it’s important, I want to sit down eyeball to eyeball. I want instant feedback and to have an immediate exchange of information.  Don’t you find that face to face can be amazingly productive?

Enjoy the rest of winter and those first few warm days of spring!

Sincerely,

Jim

 JIM M. SMITH CHARTERED ACCOUNTANT INC.

Business Matters Newsletter

February 9, 2017

Dear Client:

It’s tax time! Read our latest news article HERE.

Taxation

The first article lists changes that may affect your 2016 personal income tax return. A significant change is the requirement (for the first time ever I believe) to report the sale of your principal residence on your tax return. The gain is still exempt but you have to report it. So, the rule basically becomes if you sell property of any kind during the year – report it! Read on!

Road Warrior/Technology

Lots of really simple inexpensive items listed in this article to keep you productive while on the road. I’m not much of a shopper but I think we need some of these things! Good article.

Motivation

This is an extremely important topic and one that is studied, discussed, written about, etc. on a continual basis. What motivates us? The article makes a number of very good points and is comprehensive yet easily understood. Well worth the read and the thoughts that will happen while you read.

Face Time

We’ve developed lots of different ways to communicate without being face to face and they all have their place but, really if it’s important, I want to sit down eyeball to eyeball. I want instant feedback and to have an immediate exchange of information.  Don’t you find that face to face can be amazingly productive?

Enjoy the rest of winter and those first few warm days of spring!

Sincerely,

Jim

 JIM M. SMITH CHARTERED ACCOUNTANT INC.

Dear Client:

The last Business Matters of the year. (Click here to read the newsletter). Wow 2016 went by in a hurry! We hope that the year was prosperous and enjoyable for yourself and your staff.

Taxation

This article is all about possible taxable benefits that can arise from personal use of company owned vehicles. Remember there are two components to these types of taxable benefits - a standby benefit and an operating benefit. This is an area that CRA has devoted a lot of resources to and the rules can be fairly complex. Fortunately, the article does an excellent job of explaining the basics- read on!

3D Xpoint Technology ?

Never heard of it until I read this article. It sounds exciting, a little bit expensive to start but that will change. Don’t you just love the way technology keeps advancing! Hats off to all the techies that work hard to keep the innovations coming.

It’s time to think like Scrooge

Random ideas in this article to help your business save money. Some of them will apply to your situation and some won’t with the main point being that you should, on a regular basis, review expenses with the goal of reducing them. At a course I recently attended a very successful businessman was quoted as follows “Costs are like finger nails - they grow continuously and need to be trimmed regularly”. Ain’t it the truth.

Management

This article is all about life insurance - do you need it, if so how much? The answer to both of these questions will depend on your personal situation. Only term life insurance is discussed. Keep in mind that whole or universal life insurance should also be considered as part of your analysis. An easy read!  Remember, life insurance is not for you it’s for those around you (family, business partners/staff, charities, etc.).

That’s it!

From our outfit to yours we wish you a Merry Christmas and the very best for 2017. When the good times come may you take the time to truly enjoy them, during the hard times may you experience generosity and be able to share some laughter with those around you.

All the best,

Jim

JIM M. SMITH CHARTERED PROFESSIONAL ACCOUNTANTS INC.

2016 Federal Budget Commentary

Dear Client:

Attached here is the Chartered Professional Accountants of Canada Federal Budget Commentary.

The commentary provides an overview primarily of proposed taxation changes contained in the budget.

Of course spending was a big part of the budget.  The Commentary does not review spending proposals unless they involve payments that will be administered by Canada Revenue Agency such as the new Canada Child Benefit.

Special Note

Proposed changes to the Small Business Deduction limit will negatively affect many professionals that have incorporated their practices.  These changes are discussed on page 4.

Essentially the Small Business Deduction limit of $500,000 will have to be shared by all professionals operating as “partners” within a common practice/business.

This change is effective for year-ends commencing after March 21, 2016

As always if you have questions please contact our office.

Best Regards,

JIM M. SMITH CHARTERED ACCOUNTANT INC.

P.S. Happy Easter to all celebrating this event!