taxdetective-Sandusky-Register



Testimonial about this week's webinar, Part 1 of 4 part February 2013 series:
"Eileen’s presentation, Wednesday, was very enlightening and engaging.  There were many takeaways but one that stood out to me is that by reconciling personal books along with the various business reconciliations, everything is wrapped up neat and tidy. 

Today's workshop was very well attended. I glanced up at the end and noticed there were 44 participants on the call.  Very few questions though, must have been because everyone knows there' so much to know... lots of content and concepts presented in one hour and I'm sure everyone will want the recording to play it again. If you attended it's available for 48 hours for $5.00 with the promo code, and if not, purchase the recording directly from my website.

If you haven't already, sign up for next week at www.ipbc.ca

I mentioned that the sample data files will be available under the eCommerce tab at Keeping Records  www.taxdetective.ca. I'll be loading them up in a few minutes.

Here are the questions and answers for today:

Q: Why would you not just set up business accounts to post the amounts straight there instead of using a cash clearing?

A: If you're a self-employed business person, you're likely living out of your personal lines of credit and credit cards. I like to set up a separate set of books for the business in QuickBooks, and keep track of the personal aspect of our family finances in Quicken. I don't want to miss out on any deductions, so I record all the business purchases and business deposits to the clearing account in Quicken, then check to make sure I've captured all of those same expenses and deposits in QuickBooks using a mirror image clearing account in QuickBooks. Every month I find that I have missed something that I wouldn't have caught if I didn't have this little control system in place. Plus I can report to my spouse on how I'm contributing to the household this way as the net of this clearing account is my contribution to household cashflow.

Q: Are you using Clearing instead of Owner's Draw? Are they the same?

A: No, I'm using Clearing in addition to Owner's Draw. They are not the same. The Owner's Draws may not reconcile to the Clearing Account in Quicken. Let's be clear, I'm doing this to reconcile to the money. If I make adjustments later, I may not always go back and adjust the money in the personal records as it just isn't as important to do that unless there's a burning desire for incredibly accuracy, which given that most people don't even record their personal financial transactions, I somehow doubt that's necessary.

Q: Are you able to share the sample chart of accounts you set up?

A: Yes, you'll find more information and sample data files under the eCommerce tab, where there is a separate page called Keeping Records.

Using Internet Explorer because it has a SAVE As feature, save the file to a folder and then open QuickBooks to restore from *.QBB or Quicken to open the data file. 

Noticed something interesting while perusing my new version of the CCH Preparing your Income Taxes book that arrived yesterday.  There are two different charts with Km rates. One for tax-free km's paid to employees, the other for a variety of other purposes. The rates are NOT the same.

On page xxiv the chart for Automobile Rates and Limits for tax free allowances paid to employees for 2013
54/48 cents over 5000 km's for all provinces (last year 53/47)
58/52 cents for Nunavut, Yukon and NWT (last year 57/51)

Here's how CRA presents the same information (not in a chart so it's more difficult to compare):
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/bnfts/tmbl/llwnc/rts-eng.html

Notice how the rates increased a penny in 2006, 2008, 2012 and again in 2013?

But on the next page, xxv, (or see the link below) mileage rates for northern residents deductions, moving expenses and medical transportation services have declined 3 cents.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns248-260/255/rts-eng.html

In 2011, the rates are different for each province, and for BC they were 52 cents, but in 2012, they've dropped, to 49.5 cents.

Humph! so much for the penny dropping. Here we have half pennies on the decline.

Notice that they don't give the rates for 2013 until 2014. Why? Because you can't claim your medical or moving or northern resident claims until spring of 2014 for 2013 when you file your return for the previous year.

So yesterday, I received a message to call back the PST info person. I had written in to get advice on whether or not the products on my website would be taxable, or not. Still don't have an answer, but at least I know why. We're being held up by the politicians who are reviewing the new laws and regulations before passing them.

http://www2.gov.bc.ca/gov/topic.page?id=0CE539AD86F44033A1C531B9B597EA86

Here's what we do know. There are bulletins but the laws and regulations, where we'll find out what the rules really are, aren't passed yet. They've been drafted, but until they are law, we really have no clue how to interpret the new law. We can look at the old rules and interpretations because those may give us a clue, but those aren't going to help in some ways because technology has come some a long way in such a few short years. When PST went away, I wasn't using technology available today to create products I couldn't have dreamed up back then.

You'd think it would be easy. Today I sell is recorded webinars, eBooks, and templates that show how to calculate and reconcile the books and taxes that I've created in Word, Excel or OneNote.

They could tell me, based on Notice #18, that my live presentations, as in you attend a live presentation of almost any type, that wouldn't be considered PST taxable because it would definitely be exempt. On those I'd only have to charge GST. Same with my accounting/consulting/tax services.

But, once that live presentation was recorded and uploaded for sale as a downloadable product, it is no longer a live event, so it doesn't meet that exemption any more. But wait, there are other exemptions.

So you'd have to look at the exemption for "qualifying educational ..." and they don't yet have a definition for that. So until they decide whether what I'm doing qualifies under that definition, I'm in limbo on the re-sale of a live event. Do I qualify or don't I? My products are educational, at least I think they are, but will they meet the definition? No idea.

Not really sure about the templates as they would fall under that same "qualifying educational ..." or my eBooks, because they are PDF's whether they are qualified as exempt either, as we aren't sure of the definition of an eBook is.

Sigh. I can't imagine this is easy for the bureaucrats writing this new law and regulations either. The old law was quite simple, and the complication came in the interpretations of the law, which weren't law, and were incredibly specific about all sorts of things. It's supposed to be easier to interpret, because the new law and regulations will include these interpretations, making them accessible but not necessarily easy to understand and follow.

I'm already wishing we hadn't switched from HST to GST and PST. Not only will I have an increased cost of operating, but there will be a whole new change in everyone's procedures. Coupled with the loss of the penny, that's two fairly major changes in one spring. Welcome to my spring.