Why Work with Professionals to Get Tax Relief for you
Many people would prefer a do-it-yourself approach with many tasks in life. Nevertheless, attempting to deal with tax debt on your own can be very challenging and in some cases, it can be disastrous. Getting a tax relief is one of those processes best undertaken by professionals who know how to work the system. A qualified and experienced tax relief professional has vital knowledge relating to processes of the CRA and complexities that come with tax codes.
To help you fully grasp why it is important to hire professionals when looking to get tax relief, this article has comprehensive points that will make you think twice before trying to do it yourself.
1.You get peace of mind
Dealing with any kind of debt can be overwhelming and exhausting. Dealing with tax debt is a whole other issue especially when you consider that it is the CRA that you owe money. Definitely, the CRA will not relent as they try to get their money back and if you are dealing with them alone, you become really stressed. To avoid living in constant worry or fear, hire professionals who will undertake your tax duties efficiently. This will help you focus on other things as they try to get a relief for you.
2.Professionals know better
Experienced tax experts are your best bet if you want to get a tax relief because these guys are well accustomed to the system. Getting tax reliefs is what they do every single day so you can be sure they will easily do the required job and in the shortest time possible. It is, therefore, a no-brainer that tax professionals are a great help when you want to deal with various tax-related challenges.
3.They offer much-needed support
The adage,’ no man is an island’ is quite profound in finance-related issues. We all need support in life and only the right people will offer you the right support. As much as your family will stand with you during difficult times, vital encouragement when dealing with heavy tax debt will come from people who know exactly how such a situation is like.
These professionals will give you the much-needed encouragement by tailor-making a solution that takes care of all your tax problems. Moreover, they will be right there with you as you face the taxman.
4.Tax professionals can help reduce what you owe
By accessing your situation, a tax professional is able to realize channels of ensuring removal of the penalties and interest you have incurred. As much as this depends on the reasons why you owe the debt, someone with the required expertise will know how to do it for you. The best way to find out if CRA can forego your interest and penalties is by hiring a tax professional.
The tax relief chase becomes smooth when you hire a tax professional. Don’t pressure yourself by trying to do everything by yourself. Hire a tax expert today.
Why Bookkeeping is a Pain Point for Small Businesses
Without accounting business automatically dies. This means that, not only will it be hard for you to determine the robustness of your cash flow, but also it will definitely mean that you will rub shoulders with the CRA, and they are especially stern and objective with businesses that produce incorrect entries come tax seasons.
Why is auditing such a pain area then?
Hiring a private auditor
Owners of business often find themselves getting a private auditor as a way of keeping their business financial aspect in check and to show that they comply with the rules. Although that’s quite alright, it becomes tricky when a small business, having scarce funds and workers goes ahead to hire one. This could easily result in problems rather than provide solutions.
Because of lack of clear structures that enhance the relationship between owners and auditors, business owners end up getting inadequately trained or badly motivated auditors. It greatly pains owners to have to pay auditors, especially when they don’t even manage them, and worse, they can’t even offer bookkeeping that can actually help their small businesses to grow.
Not an enjoyable task
Auditing is not loved by everyone, in fact, it’s one of the tasks that most business owners dislike doing. A fact is that, once you hate the job, you tend to do it so clumsily and shoddily, and this is the reason why it becomes such a tedious and pain area for most if not all.
Bookkeeping work is so repetitive
If you are an owner who doesn’t have patience, you are so unlucky because auditing is an exhausting job that constantly requires repetitive action. It will not require you to do it once or twice, it will be an everyday job that you will perform for the entire time your business will be operational.
Need for consistency
Consistency is necessary for a smooth experience. To run a successful business you must be willing to constantly dedicate your time, energy and know-how to updating information in your books. This is often not the case with all small business owners. At times you miss to do so and such days matter the most because a couple of missed updates will lead to a tedious bookkeeping process that’s dreadful and cumbersome.
So is outsourcing the solution?
Though outsourcing may not be an alternative in your business, it is very suitable for administrative functions such as auditing and accounting. The greatest part about outsourcing the bookkeeping task is that you don’t get to do a thing. Everything is handled by the hired company, from the coaching, hiring and even supervision of workers who will carry out the bookkeeping work for you.
To add to that, you can leave the current company when they fail to perform to your expectations and move on to hiring a better one. Firing and retraining isn’t necessary when you outsource all accounting and you should definitely expect to receive some qualified auditors when you choose this option.
The success of your business depends on the effort and attitude you put into financial matters. You can also get assistance to avoid trouble and failure.
What is VDP or Voluntary Disclosure Program
Basically, what Voluntary Disclosure Program offers is another chance to correct your taxes. It accords you an opportunity to rectify that previously filed inaccurate return or to file a return you ought to have filed. When a filed VDP appeal gets approval from the CRA, you are required to clear the unsettled tax in addition to some interest paid partly or in full. However, you are likely to qualify for relief from penalties or prosecution.
It would be unfair to offer relief under the VDP to individuals or corporations who are just looking for a way to avoid taxes when a greater number of Canadians make sure to file and clear their entire taxes on time. To avoid a situation of favoritism, CRA differentiates applications for relief by taxpayers who want to rectify an involuntary error from those who are deliberately dodging their tax responsibility, and they make certain that these two kinds of people get very dissimilar reliefs.
When the CRA becomes aware of a taxpayer’s hidden engagement in a tax non-compliance, they continue restricting that person’s participation in the VDP. Note that the Canada Revenue Authority is a large body with the required expertise and resources, making it easy for them to get information about a taxpayer.
Applying for a VDP
There are two streams you can use to apply for the VDP to correct errors or exclusions in your income tax filings. However, you should know that this will rely upon the type of disclosure you want to make. One of the streams is the income levy stream which deals with all disclosures connected to the Income Tax Act. The other stream is the GST/HST stream which deals with all disclosures linked with harmonized sales tax, excise tax, goods and services tax, excise duty, air travelers safety charge and the softwood lumber products freight charge. Always ensure that you utilize the proper stream for your disclosure.
Requirements for an authentic VDP application
1. Ensure that the disclosure is voluntary. A disclosure ought not to include an offense that has been previously revealed by the representative of the applicant or the applicant themselves.
2. It should only be made in the recommended way and manner
3. It needs to be sufficient and complete with regards to all substantial aspects
What happens after you have made an application for VDP
1. It’s unnecessary to request your VDPs application’s reconfirmation. Provided that the eFiling system has admitted the application, then you should not worry because the application is on the VDP registry which means that the CRA is processing your application.
2. You will get contacted when your application is assigned to a VDP assessor for processing
3. If you change your mind, it’s possible to cancel the application.
4. Where you have other unresolved tax return issues linked to the VDP application, there are no restrictions to submitting them to the CRA via the usual channels as long as you do it before the application is handled.
Make sure to utilize a VDP so that you can regularize your tax duties for prevention of penalties and retribution.
What are the Benefits of owning Life Insurance through a Medicine Professional Corporation vs Personally owning it?
With a life insurance, the person covered can own it or they can have their company as the owner of the policy. Consequently, personal ownership means an individual is the owner of his/her policy while corporate ownership defines a life insurance policy owned by a company.
For personal ownership, the individual owning the life policy is the insured, a grandparent or a parent owning a policy that covers their grandchild or child, a wife or husband owning a policy that covers their spouse, a partner owning a policy that covers another partner etc.
When it comes to corporate ownership, a company fully owns the life insurance policy. For example, companies own life insurance policies on key employees, shareholders, or even future shareholders. In estate planning, it is very prevalent to see companies owning policies.
The difference between the two types of life insurance ownerships lies in the reasons for owning each and the benefits.
Most people choose to own life insurance personally due to personal estate planning needs. These needs include creating a pool of capital that offsets income loss which occurs when the insured passes away. For others, personal ownership is a way of funding estate taxes or fixing up enhanced integration wealth transfer.
On the other hand, companies own life insurance because of a shareholder buy-sell arrangement, to provide protection for a key-person, or as security when looking to get a bank loan. Furthermore, some people prefer corporate ownership in personal estate planning due to tax advantages and access to corporate funds when it comes to paying premiums.
Personal ownership benefits
1. Income replacement: For centuries, life insurance has been a cushion to families especially where income earners have passed away. The death benefit acquired out of life insurance is investable for interest and dividends, or it can purchase an annuity. Either option is a means of replacing a portion or all the lost income.
2. Creditor protection: With a personal life insurance, creditors cannot seize the policy’s cash value. Personal ownership is applicable where one is looking to protect the proceeds of a life policy from creditors.
3. Probate fees avoidance: Provinces in Canada charge probate fees on the estate’s assets. However, a personal-held policy having a designated beneficiary is not chargeable when it comes to probate fees.
Corporate ownership benefits
1. Cash reserve: When a company decides to purchase a life insurance policy, it is buying a death benefit coverage amount. This death benefit is the compensation that the company will get in case of loss of an insured employee. Due to the cash value that comes with the policy, a company is able to access low-cost life policy loans when there is need. In a sense, buying an insurance policy is like saving money in a bank for companies.
2. Lower premium cost: The price of premiums is lower when purchasing life insurance policy via a company than buying it personally. Most insurance companies calculate premium prices to encourage more companies to purchase life insurance policies for their employees.
3. Tax benefits: Most insurance firms will allow your company to pay pretax premiums on behalf of the insured.
When choosing the best way to own a life policy, consider the benefits that you get from each type of ownership. Personally owning a life insurance policy may seem the best option for you but before you go ahead and purchase, carefully study the advantages of owning such a policy through a medical professional corporation. This will help you make the best decision.
The Top Mistakes Entrepreneurs Make with Bookkeeping
As an entrepreneur, your prime goal is to ensure that your business grows and thrives to ultimate heights and to achieve this, you absolutely need to avoid these frequent bookkeeping mistakes we are going to explain below.
Handling all auditing work by yourself
Most business owners have a DIY attitude, which means that they do every little thing pertaining to business by themselves. It’s advantageous to cut on the expenses, but you also have to understand that although not so much auditing work is done in the beginning, later on as the business progresses you will be required to habitually log your books. So if you are not prepared adequately as you start, your business will be a source of many headaches.
Solution: Plan for a professional accountant in advance, so that you can get your auditing work done fast and thoroughly.
Failing to record existing books
When you make purchases and pay using credit cards or cash, it is highly likely that you will forget to update that information. Such an action will cause a mismatch between the numbers in your books and those in the bank statement.
Solution: To avoid making errors, make sure to either note down the purchases in a notebook or get an accounting app that eradicates all the paperwork by just taking a snap of the receipts.
Using the wrong bookkeeping software
A proper auditing software is one that meets business needs and reduces the workload for your workers and to the industry as a whole.
Tip: Make sure to invest in the best software available that will give you high accuracy in record making. Ensure that staff is able to use it too and if they are not, offer the necessary training.
Having one account for both business and personal activities
Being self-employed should not give you a reason to think that you shouldn’t get separate accounts for your activities. If you use one account, everything will be jumbled up, causing you to get confused and to get errors when going through your books.
Solution: Open a business account that will solely be used for business transactions only. It makes the bookkeeping job easy and everything gets clearer for you.
Failing to organize information accordingly
Disorganized work is very displeasing and annoying, both for the business owner and for whoever stands in for you to do the auditing job. Failing to have proper categories in your account books makes referencing exhausting and recording difficult.
Solution: Have your work neatly organized to make tasks such as referencing and recording effortless and to give an easy time to your accountant while bookkeeping.
The books numbers don’t match with bank statement numbers
Witnessing this can be a sign that a receipt or bank payment was not accounted for during auditing. When this happens you can be sure that trouble may arise soon, especially when they go missing completely. Constantly failing to update information will eventually lead you astray because of the confusion it will bring as you try to fill in numbers to make them balance.
Solution: Always make sure that what has been tallied on your books is similar to what is in the bank statement, as it will give you confidence that everything is perfect.
Seek to adhere to the above bookkeeping tips for better and accurate bookkeeping results that will build a strong business foundation for your business.