Mary just turned 58 this week. She earned her designation by working full time, and going to school at night over ten years. She paid her CGA annual dues in June. She's not registered in public practice nor does she have insurance because she doesn't think she's required to be registered if she just does bookkeeping so far. But she has three neighbours (see previous post) asking if she's take on their books and prepare their 'simple' tax returns.
Mary has been a self-employed ‘on contract’ keeping books for a local business very part time for almost nine months. The business owner, Fred Jones, is happy to have a CGA helping them with their books. Mary so far is refusing to help them produce financial statements. She's not allowed to prepare financial statements unless she's registered in practice and has purchased insurance. Under pressure from Fred, she helps the owner figure out their payroll, WCB and HST reporting but makes him file the reports. She started doing the books in April 1, 2012 and now it's November 24, 2012. Fred is pressuring her to help with the tax return for the business and can't figure out why she refuses. He can't figure out why he has to hire another CGA when he already has one working for him. It makes no sense to him.
Mary works about 2 hours five days a week and is charging the owner a flat $650/week. She hires Emily to do some of the tedious sorting and data entry at $20 per hour. Emily works 8 hours a week, Tuesday and Thursday. Emily is a part time college student. Mary doesn't charge the business owner for Emily.
Mary hasn’t registered for payroll or for HST but she knows that's necessary when her income in any four preceding quarters reaches $30,000, she'll need to register for HST.
Mary purchased a desktop computer for $900 on March 15 and a second used desktop for $700 for her Emily on June 15. She has been paying $50 per month for QuickBooks so as a QuickBooks ProAdvisor she gets 5 copies of the program.. She does her billing using QuickBooks and uses it for her client's books too.
Mary works from home. Her mortgage has been refinanced and only 30% of the original mortgage is included in the mortgage principal of $100,000. Her interest for the year at 5% is $5,000. Property taxes, as she’s not over 55, are not deferred. She paid $3,500 for the 2012 year. Utilities, including hydro and gas and the municipal annual charges for garbage etc. are $3,200. She put a new roof on the house for $10,000 in June. The annual municipal services bill in March is $900.
Mary's home phone which she uses for business and personal is $450 for the year. She also pays $10 a month for a second phone number for her fax line and $80 a month for Internet and cable for the house. Mary just purchased an iPhone on a 3 year contract for $200. She uses it to keep tabs on her email and messages when she’s out at clients. It’s going to cost her $50 a month to operate but she hasn’t seen the first bill from TELUS yet.
Mary's car is 10 years old and she owns it outright. Insurance paid in August was $1,500. $560 for new snow tires in October, oil change in June, $135. Gas, $20 per week on Sunday. Her Km reading at April 1 was 58,000 km. Blue book value March 2012 was $5,000. She has a calendar of her client visits and hasn’t prepared a km log, but she does have all their addresses on her invoices. Her desk is a makeshift 4x8 sheet of plywood over a couple of sawhorses from the back shed and a desk she found on the street during spring cleanup. She’s visited Staples once a month to purchase office supplies, paper, boxes, pens, ink for her printer, which is an old Laser Jet someone gave her. Total purchases to date $1,600. She has a filing cabinet that’s worth about $800 from her last job when the company went into receivership. She took the filing cabinet in lieu of a final paycheque. An annual maintenance contract in August for $79 provides a guarantee her printer will keep working and if it doesn’t she’ll only pay for parts, not labour.
In September, Mary joined the local Chamber of Commerce and pays $20 for monthly dues. She is attending monthly dinner meetings which cost her a meal at ABC Restaurant including tip, $20 per meeting. She’s picks up 2 Starbucks coffee whenever she visits each of her 4 client’s office once a week to share with the client while they review what needs to be done. She provides pick-up and delivery services. Most clients are not willing to scan documents by email. She paid for e-courier.ca for secure encrypted email in September at the CGA conference, $300.
Emily's office is in the third bedroom in her house with a small table for the computer. Emily is also using a dining room chair as well as a card table for additional work space. Emily is paid $20 per hour and has worked every week since June 15. Mary has a nosy neighbour who is annoyed that Mary wouldn't help her with her tax filing She suspects that today’s calls from the Surrey business licence officer, Employment Standards, a Payroll Trust Compliance person at CRA and WorkSafeBC resulted because Emily parks in front of the neighbours sometimes when there's too many cars in front of Mary's when Fred shows up to meet with Mary at the same time as Emily is there.
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