Simon Zhong

A separate business bank account is the first step towards a healthy cash flow

Cash flow problems are responsible for causing over 70% of businesses to fail within their first year.How can you ensure that your business develops and maintains a healthy cash flow? You have to be aware of the dangers that can pose a serious threat of causing such problems.

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Income splitting

Income splitting is a family tax planning technique designed to shift income from a higher-income earner to a lower-income earner to reduce the overall tax paid by the family.

An example of income splitting 

The following simple example will help you understand the basic idea. 

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Does every employee in your company sell?

“Everything starts with a sale” - Thomas J. Watson 

In today’s competitive world, the success of a business largely depends on marketing and sales. 

However, in many companies, selling is only regarded as the job of the people in marketing and sales department. Selling should be the job of every employee. Yes, I say everyone. Sir Thomas J. Watson still thought himself as a salesman even after he had been IBM’s CEO for forty-two years. 

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It is happy to help a $3 million deal go through – a Proccounting successful story

Client had reached a tentative agreement for $3 million to sell his business to a large law firm.  This can be a once-in-a-life-time opportunity for client. While preparing the financial statements for the review by the purchaser, the accounting firm just discovered an issue that was too difficult for their team because of their lack of experience in legal industry bookkeeping and the software used. The deadline for the statement was approaching. The purchaser may walk away. The accountants were nervous.

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Make medical expenses tax deductible with a private health services plan (PHSP)

It is well known that medical expenses are personal expenses. They are only eligible for a tax credit (not a deduction) for the amount over 3% of net income. It is relatively little known that you can write off medical expenses if you own a business with a private health services plan (PHSP), a structure that is allowed under Section 248(1) of the Canadian Income Tax Act (ITA) introduced in 1989.

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Know your rights when you are dealing with the taxman

“The hardest thing in the world to understand is the income tax.”
- Albert Einstein

As the Income Tax Act (ITA) has grown to more than 2,000 pages today, the tax department is still struggling to deal with practical problems that always seem to pop up, and the apparent uncertainty in many areas of tax law.

The complexity presents a daunting challenge even to those familiar with Canada’s tax system. It is not uncommon that, in some cases, even the taxman cannot interpret the law properly. Take a look of these court cases.

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Privacy is an enemy when filing family tax returns

“Simon, just file my return for me this year. Don’t worry about my wife’s. You know, she is going to do hers by herself.”

This sounds easy. In fact, it is a challenge.

It may be OK to have some privacy between a couple, keeping a separate bank account or locking computer with a password. But when it comes to filing tax returns, it is not a good idea to keep secrets.

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The CRA's matching program

Every fall after the busy tax filing season, the matching program starts running ruthlessly. It systematically scans all tax returns and matches the information you reported on your return with the information reported by your employer, bank, investment companies, business partners, and any other partner.

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Tax deferral - a powerful tax saving strategy

Tax deferral is the concept of pushing a tax bill from the current year to a year in the future. It is one of the most effective tax saving strategies. Why can you save money by deferring tax?

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Good working habits lead to success in business

One of the goods things to work in Proccounting Inc. is the opportunity to work with many small business owners. It is amazing to see some business owners running very successful businesses and still have time to enjoy their personal life. And unfortunately, many others are really burned out but their businesses are still struggling. My experience tends to tell me that work habits contribute a lot to the difference. Good working habits lead to success in business. Read more ...

Think positively about your relationship with the Canada Revenue Agency

The Canada Revenue Agency (CRA) has long been painted as the taxman, a money grabber. Many people have been trying to shun and avoid the CRA. In fact, the CRA does more than just collect taxes. It also delivers social benefits, the free money everybody is happy to receive. It can become an ally that you can tap into a variety of lucrative benefits and credits.

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