TAX TIME IN THE SNOW

It’s almost time to prepare your 2008 income tax returns, and the mounds of snow will help keep you indoors looking for something to do, so it’s a great time to organize your records, collect your T4’s and get out that old shoebox.

Attached are two documents: the Tax data sheet for 2008. Use it to report all the current year info. If your not up-to-date and doing 2007 make sure you write the appropriate year on the form, before you send it in. You MUST sign and submit the Taxdata form in order to efile your return. Instructions for filling in the data sheet are also on my website www.Business-Prescriptions.com

Something else to make things easier for you is to apply for an account at Canadian Revenue Agency. Go to their website at http://www.cra-arc.gc.ca/eservices/tax/epassservices/menu-e.html and open an account. After you receive your password by snail mail, you will be able to use the Internet to look up all your tax and GST records, plus other areas of federal government activities that relate to you specifically. The process is as secure as your banking website. Also you can arrange to allow me to have access to your account, in case there need to be adjustments to your tax return. This gets rid of the necessity of mailing or faxing me government papers to look after your tax affairs.

Several clients are registered for the GST. If you want me to prepare your GST Returns, you must make a note of that and complete all the required information on the data sheet.
Leaving me to do calculations can be very expensive!

New on my website www.Business-Prescriptions.com, is a gst extractor excel spreadsheet. It covers the gst at 7%, 6% and 5%.

If you are thinking about NOT filing your current and previous tax returns because of the downturn in the economy, it really is time to bite the bullet. Not keeping up with your returns may mean you lose money coming back from the government. You could lose the rent rebate and the GST credit or the baby bonus if you’re not up to date, plus it makes your file more attractive to the audit department! Late filing will get you classified as a “chronic no-filer” which means penalty and interest charges will be doubled!!

Please feel free to call me at 416-537-6947 if you have questions or just need a friendly ear in these difficult times. I can always put on a pot of coffee if you wan to pop around for a face to face chat.


Danny

LINING UP AT THE BANK TONITE?

There may be long line ups at your bank today, as people who have procrastinated step up to purchase RRSP instruments from their bank. The deadline is actually March 1, but old habits die hard, especially the habit of leaving things to the very last minute.

Hopefully by today you have decided 1, whether an RRSP is a good idea for you, 2,what is the maximum amount you can deposit in your RRSP this tax year, and 3, what sort of way you are going to pay for your RRSP.

Your Notice of Assesment from last year's tax return will tell you how much you can put into your RRSP this year, it is based on how much money you EARNED last year. YOu can also telephone Revenue Canada and have them look it up for you, but today you will probbaly only get busy signals all day.If you only had dividend income or you inherited a pile of money, you don't have any earned income, and therefore your RRSP limit will be zero. People who run their businesses through a Corporation will not have any PERSONAL earned income.

All is not lost, as you may have RRSP room from previous years, or if you are really gung-ho for an RRSP, you can contribute up to $2000.00 over your limit without penalty. BUT, you will not get a tax deduction for the contribution.

Banks are falling over themselves to lend you money for an RRSP cotribution. The standard rate is about one percent LESS than the prime rate the bank charges. So it's a bargain to borrow the money, but the loan is restricted to RRSP purchases, you cant use it to pay other bills.

All of the above is predicated on the concept of actually HAVING an RRSP. Which may or may not be a good thing. Some people's tax rates make a RRSP a poor investment. Other people may find alternative ways to invest spare money. Unfortunately many people don't have spare money, as they are busy paying down their credit cards. Your mileage may vary.

WILL YOU STILL LOVE YOU WHEN YOUR 64?

Happy Valentines Day! Give yourself a Valentines Day gift by thinking about your retirement! Now is RRSP season and the banks have started to bombard us with sales pitches about your RRSP. Do you have an RRSP? Do you have an RRSP because your Union gives you one as one of the benefits? Will an RRSP benefit you when and if you retire?

First question to ask yourself is"Will I ever Retire?" Some people can't wait to retire because their work just doesn't turn them on. Others will never retire because they love their work, or know they will never have enough income to live on if they stop working. Some folks lead an unhealthy lifestyle and won't live till retirement age. Which one are you? Serious questions to ask yourself on such a romantic, heart warming day!

Besides, what's an RRSP anyway. Some people see it just as a quick tax deduction, some see it as a forced saving account. An RRSP is not really a tax deduction, but rather a tax deferral option. You will pay tax, just at a later date. Perhaps when your no longer working, and your tax rate is LOW. But if you don't ever plan to have a low tax rate, because your going to be richer and more famous in your golden years, then an RRSP is not the best for you. Also the tax laws regarding investing OIUTSIDE of an RRSP have changed so much, that many of the benefits of an RRSP can be had without the restrictions of an RRSP.


Every ones situation is different. If all the above is clear as mud, give me a call and we can discuss YOUR particular situation and future. In the meantime, eat some chocolate, its good for the heart.

Setting up an Email Account

If you don't have an internet service account, you can still use the email capabilities of the Internet by opening an account with one of the several free email services. HOTMAIL is the original and probably most widely used free email service. Others are Yahoo Mail and GMail. Each one has their differences and different fans.

To set up a Hotmail account, simply go to www. Hotmail.com from any internet connected computer. Once at the Hotmail site, choose the level of service you need. FREE is always good, but of course there are always options to spend money. If you want to send HUGE files or many photos, you might consider spending $29.95 or $79.95 per year, but it's always best to start for free, then upgrade if your needs change.

You will be asked to create an account address and a password. These will be unique to you and no one else will use them or have access to them. REMEMBER you account address and password, because retrieving them can be a painful process. When you use the Hotmail system, your computer will ask whether you want the computer to remember your address and password. If you are using your computer at home and no one else will be using the computer, take advantage of the computer memory. If you are at an Internet Cafe, protect your privacy by NOT allowing the computer to remember your address and password. Hotmail will keep your emails on file in their computer, so you always have a record of your communications. They are not stored on the computer you are using, and are safe from prying eyes, unless there is a court order!

You might want to consider changing your password on a regular basis to enhance security.

The beauty of a Hotmail account, is that you can access it anywhere you can get on the internet, so it's perfect for communicating while your on tour, on holiday, or just away from home.

One downside to a Hotmail, or other free account is the lower class image you project. You and a billion other people use a free service. If that doesn't matter to you, keep using Hotmail. Its similar to not registering for the GST, if your not registered for the GST it is obvious your annual income is LOW. But if you need to project a business like professional image, consider getting your own web page with email capacity. More on that another time.

Personal Electronic Account at CRA Revenue Canada

The tax folks, CRA, or Revenue Canada as we used to know them have set up a process whereby you can open an electronic account, much like your bank, which allows you to track your tax return progress as it works through the system to your tax refund.

Click on
http://www.cra-arc.gc.ca/eservices/tax/individuals/myaccount/menu-e.html
to open your personal, very secure account. At this time only you will know your account password. Eventually, the system will allow me to have access to your account, which when you have questions for me, I will be able to see where your troubles are.

Eventually this electronic account will enable you to deal with all arms of the government ,and hopefully replace the mountains of paper that they currently send out. This will be especially useful if you move around a lot or are on tour.
Things like child benefit cheques, Employment Insurance cheques and your old age pension payments will all be online for you to look at and deal with while on the Net. It's just part of the whole move to electronify business activities.

If your not yet up to speed, and don't have an email address to receive information and tax returns, please consider opening a Hotmail Acccount, which is FREE and accessible from anywhere in the worlld. Check out tommorrow's post to walk you through the Hotmail process.

Welcome!

Greetings and Salutations.
Welcome to Business-Prescriptions.com.
I am currently updating and redesigning this site to better serve you!
In the next few weeks I will be uploading documents for the upcoming tax season. These will be found in the right-hand column under the heading 'Documents'. I will also be sharing with you my wealth of knowledge regarding tax tips, so that you can mind your wealth! You'll find my numerous tips and advice helpful and my bedside manner entertaining. Taxes may be a bitter pill to swallow, but I shall endevour to make the process go down smoothly.... like a spoonful of sugar (to paraphrase a certain british 'brolly-toting nanny!).