Income Tax Rates for the Year 2014

Federal personal income tax rates below for 2015

  • 15% on the first $44,701 of taxable income, +
  • 22% on the next $44,700 of taxable income (on the portion of taxable income over $44,701 up to $89,401), +
  • 26% on the next $49,185 of taxable income (on the portion of taxable income over $89,401 up to $138,586), +
  • 29% of taxable income over $138,586.

Provincial personal income tax rates below for 2014

Tax for all provinces (except Quebec) and territories is calculated the same way as federal tax.

Form 428 is used to calculate this provincial or territorial tax. Provincial or territorial specific non-refundable tax credits are also calculated on Form 428.

Alberta 10% of taxable income

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ALL-PRO Bookkeeping Ltd.

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ALL-PRO Bookkeeping & Business Services Ltd. is a Calgary based bookkeeping business established in 2006 by founder and owner Valerie Mellof

 We provide over 20 years of experienced bookkeeping services to Entrepreneurs and small to medium sized business owners in many differnt fileds.

 We customize our services to suit your needs – whether your business requires weekly, semi-monthly, monthly, quarterly or an annual bookkeeping service.  Our goal is to ensure your needs arae met!

 Our staff includes trained, professional bookkeepers with over two decades of unparelleled experience in both the private and public sector.  We at ALL-PRO are dedicated to producing high quality work for our clients.  We have worked with a wide variety of different business, not only helping with their bookkeeping but also in training in-house staff as well as consulting. 

 We look forward to providing you the best service possible!

 

Tracking your Mileage

Track Your Mileage

During the course of a year, many of us will use our own vehicle for business purposes. But what exactly makes up the total expense we can claim on our taxes?

You can claim the full amount of:

  • Parking fees, and
  • Supplementary business insurance on your vehicle

And you can claim the business use of:

  • Licence and registration fees,
  • Fuel and oil costs,
  • Insurance,
  • Maintenance costs,
  • Interest on money borrowed to buy a vehicle, and
  • Leasing costs

Now this is where it is very important to track your mileage.  Since only the amounts of business use can be claimed for the second list, you need to know how many kilometers of your total number of kilometers in the year are for business use.

Luckily, there are easy ways of tracking this!

For those who are tech savvy, there are apps you can download to your mobile device that will use GPS and track the distance you travel. Milebug is an app that I use on my iPhone.

There are also log books you can keep in your vehicle to record your business mileage.

CRA Requirements for Invoices

The CRA’s requirements for invoices depend on the total sale amount.

For sales Under $30, there are 3 pieces of information:
– The name of the business
– The invoice date
– The total amount paid

For sales Between $30 and $149.99, include the above 3 points, plus:
– The total amount of HST/GST charged on the sale
– If the sale has items taxed at different rates, you must show the break-down of the amount of tax at each rate
– The business number of the business issuing the invoice

For sales Over $150, all points above must be included, plus:
– A brief description of the goods or services
– Terms of payment

Accounting Terms Explained

Lately I have had some clients ask me what the meanings of certain accounting terms are.  I have compiled a few answers to common questions below…

What is an asset? Just like in ordinary language, an asset is something you own that adds value to your business. Fixed assets are things you wouldn’t normally sell, like buildings or equipment. Current assets include cash, accounts receivable and things you normally use up or sell.
What are Accounts Receivable? This is a list where you keep track of which customers owe you money, how much they owe, and how long since you earned the income. This is one of the most important assets of your business. It must be monitored regularly, to make sure you collect on what are really interest-free loans to your customers.
What are Accounts Payable? This is where you keep track of which suppliers you owe money to, how much you owe, and when they must be paid. This is one of the most important liabilities of your business. It must be monitored regularly also, with regard to being able to pay on time.
What is a Balance Sheet? The top of your balance sheet shows you the assets owned by your business. The lower portion shows (in broad terms) where the money came from to buy those assets: either from you (equity); or borrowed (liabilities). One reason it is called a balance sheet, is because the total value of the assets always equals the total of equity and liabilities.
What is a Business Plan? A business plan is a report that summarizes the research and planning you have done in order to answer this question: will you be able to sell your products and/or services, and make a living at it? Going through the process of preparing a business plan will make you face the hard questions every successful business deals with. They aren’t easy to do, but they are worth it. Existing businesses can benefit from a solid business plan, but an inexperienced manager of a new business really needs one.
There are many free internet resources to help you prepare a business plan, usually taking the form of questions that you answer one at a time. These questions include describing your cash flow requirements and your marketing strategy.
What is Double-Entry Bookkeeping? Unlike using a cheque-book to keep track of a single bank account, double-entry bookkeeping lets you keep track of many accounts, and maps the transactions between them almost effortlessly. If you have a business with more than one bank account, including a credit card or line of credit, double-entry bookkeeping is more efficient.
What is cash flow? Cash flow is the day to day ebb and flow of money in and out of your business. Even if orders are coming in fast, you may find you are short of cash to pay your bills. Up-to-date invoicing, and collecting on those invoices, are critical for a healthy cash flow.
What is a Cash Flow Projection? A cash flow projection, or cashflow analysis, is extremely useful on its own, or as part of a business plan. It is generally prepared using spreadsheet software. It will have columns of monthly (or weekly) estimates of income, investment and expense amounts, the more detailed the better. For example, if you know you will have to pay $2,000 in rent each month, there will be a row just for rent. It will also include large one-time costs, such as equipment purchases. The benefit of a cash flow projection is that it shows you when you will be short of cash, and gives you time to prepare. Even poor estimates are much better than none, and they can be improved as time goes by. One of the most common ways growing businesses run short of cash unexpectedly, is when they are waiting for previous customers to pay up while materials must be purchased for new orders.

10 Bookkeeping mistakes made by Small Businesses

10 Bookkeeping mistakes made by Small Businesses

This post consists of the top 10 bookkeeping mistakes made by small businesses which many will encounter at some stage of their life cycle. The excerpt is from an article that appeared on AllBusiness.com.

From one-person entities to major corporations, bookkeeping is a significant part of any business endeavor. While it is typically not one of the more glamorous jobs, bookkeeping is at the heart of a company’s success, and errors can cost the company significantly. Below are 10 of the most common errors that you want to avoid.

  1. Not saving receipts of less than $75. While such receipts may not be required by the CRA, they provide backup documentation for the many deductions you may claim. It is very simple to have a folder for such receipts, which can prove valuable at tax time.
  2. Doing it yourself. No matter how much they hate it, many small business owners insist upon handling the books themselves. Having a competent bookkeeper coming in to handle the books can be extremely beneficial in that they have the skills to do the job quickly and efficiently and will provide a second pair of eyes to find errors and make suggestions.
  3. Forgetting to track reimbursable expenses. Small business owners often pay for expenses out of pocket or with their own personal credit card then make the mistakes of failing to track these expenses. They then fail to submit the expenses to the company for reimbursement.
  4. Not properly classifying employees. The proliferation of independent contractors, consultants, and freelancers has made it difficult to determine who is on staff and who is not. This results in misfiling when it comes to filing taxes since there are different rules and regulations for employees and non-employees.
  5. Lack of communication. Having someone handling bookkeeping is only effective if they are filled in and kept up to date on all financial transactions. A frequent mistake is paying someone a bonus and not reporting it or buying supplies and not providing the bookkeeper with the information or receipts.
  6. Not reconciling the books with the bank statement each month. One of the fundamental aspects of bookkeeping is reconciling the books and bank statements every month. Nonetheless, there are businesses that do not do this and others where errors are made by not doing it properly. Again, this is a good reason for hiring an experienced bookkeeper.
  7. No backup. The paperless office does not exist in the real world, where audits do still exist. A paper trail, documentation or verification in the form of backup documents should be available, especially if all files are on the computer system, which could be prone to technical problems.
  8. Not deducting sales tax. A common mistake in retail businesses is not deducting the sales tax from the total sales. This results in a higher total sales amount and does not lower the amount of taxes due.
  9. Petty cash nonchalance. A system should be set up whereby a set amount of money is in petty cash and each time money is taken out for any purpose, a petty cash slip is filled out. When the fund is exhausted, the slips will total the original amount and a check can be written to cash to set up the full amount again. Many offices are nonchalant about using the petty cash fund without keeping accurate records.
  10. Miscategorization or overcategorization. There are fairly standard categories for expenses. However, often expenses are entered into the wrong categories or too many categories are created. Use general bookkeeping guidelines for standard categorization and create as few new categories as possible. Try to follow generally accepted accounting practices.

An outsourced bookkeeping solution can help in avoiding mistakes like these.

Source: AllBusiness.com

TOP 5 MISTAKES BUSINESS OWNERS MAKE WHEN USING QUICKBOOKS

TOP 5 MISTAKES BUSINESS OWNERS MAKE WHEN USING QUICKBOOKS

As a small business owner, your desire is to do things the right way. And one of those things is to track your expenses. So what do you do? You go out and buy QuickBooks or Simply Accounting or some other small business accounting program. And then you make the #1 mistake all businesses make when they purchase a software package – you don’t maximize the program and use it to it full capability. Don’t worry most large companies do it to with even more expensive packages. It’s one of those things I will never understand.

Now you’re probably asking yourself “what mistakes do I make”. Well I will tell you. Here are the top five mistakes made when using QuickBooks and other small accounting packages:

  1. Setting up the chart of accounts incorrectly. As a business owner you need to track your business expenses in categories that pertain to YOUR business. Although QuickBooks comes with a template list of accounts for various types of businesses, there      will still be accounts that will apply to your business and not necessarily your competitors. So be sure to have an account created for      any type of expense that cannot be captured in the accounts that are already created. Also, be sure that you are categorizing the accounts correctly. An expense account should not appear in the Assets section of the Balance Sheet. When in doubt create an “I Don’t Know” account to ask your outside accountant later.
  2. Using the Write Checks module to input any and all types of      transactions. Often times a small      business owner is busy building their business which will cause them to lag on their financial record upkeep. As a result, when the time roles around for them to produce financial records they are scrambling to get everything in. The result is that all transactions are inputted as check payments, whether they are check payments or not. This module should be used for check payments and debit transactions ONLY. There are other modules for other types of transactions.
  3. Using the Creating Invoices and/or Enter Bills module incorrectly. In this case an invoice or bill is entered correctly, but the process to record the payment is done incorrectly. You can’t enter an invoice or bill in the appropriate module and then pay it through the Write Check module. That is creates double counting. And double counting creates too much income or too many expenses. And we all know the result of that…an invitation from Revenue Canada
  4. Use the Adjusting Journal Entries module to input all types of transactions. This is the same as #2 above, with the exception that they are inputting everything as an Adjusting Entry. This module should only be used for transactions that do not fall into any of the other modules.
  5. Not reconciling your bank statements every month. This should be closer to #1 but without numbers one through four      being done then #5 can’t possibly happen. In order to know where your cash balance stands at the end of the month, you MUST reconcile your account. This reconciliation can ONLY include transactions that actually went through the cash account. Bank account reconciliation is a necessary tool to understanding your cash flow. Remember Cash Is King!

To learn more about these common mistakes and more, contact me for a discovery session to determine what type of QuickBooks training you need to be able to evaluate the financial status of your business.

Valerie

New Client Information Form

New Client Information Form

Click on the PDF (above) to print off the form.  Once it is filled out, you can either scan and email it back to info@allprobookkeeping.ca or fax it to:  403.366.4999.

I look forward to doing business with you!

Valerie

Business Owner’s Checklist

Business Owner Checklist

Click on the PDF (above) to view and print a handy checklist to make sure you have everything prior to ALL-PRO doing your bookkeeping. 

I look forward to doing business with you!

Valerie

Do you need a Business Number?

Congratulations. You’ve decided to start a business! In what has no doubt been an unsettling last few years of employment high and lows, more Canadians than ever are deciding to venture out on their own and forge their own paths through small business. There’s one thing that’s essential when it comes to getting your venture off the ground…your business number.

What’s a business number? Good question. According to the CRA:

The Business Number (BN) is a numbering system that simplifies and streamlines the way businesses deal with the federal government. It is based on the idea of one business, one number. Each business requires one BN for its legal entity. A legal entity is defined as a sole proprietor, partnership, corporation, trust or other organization.

It’s a 15 character identifier of your business. It has two parts; a nine digit number that identifies your legal entity, and a 6 character portion composed of letters and numbers that identifies the particular tax account. The nine digit number part of the Business Number never changes; the second part of the Business Number will change depending on which tax account the number refers to.

This number is the single key in dealing with the federal government on payroll, tax remittance, import/export activities, and a variety of other items. Your business number is what’s required to be referenced with the CRA when it comes to discussing the details about anything related to remittance, tax, or business activity subject to tax.

You need to register your business and get a business number. A good resource for this is the Canada Revenue Agency’s website. You can find the link here:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bn-ne/menu-eng.html

You can also register your business online here:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bn-ne/bro-ide/menu-eng.html

 

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