Dear Clients and Friends,
It's that time of the year again, as everyone shifts to holiday gear. The excitement of shopping for the perfect gift, to packing for that long awaited holiday!
I would like to take this time to express how grateful we are for our work with you. Your continuous support with your referrals coming our way, shows my team and I that we are on the right track in providing you the Knowledge, Value and Trust that we are committed to. We truly appreciate your loyalty.
We are working with our vendor to provide you with a mobile app, that will make your shoe box of receipts go directly into your QuickBooks! Simply by downloading the mobile app, you can begin taking pictures of your receipts as soon as you have it in your hand! The system will set up the rest. No more envelopes, no more scrambling around, minutes before tax season descends on you! Call me and we can set you up!
Part of our commitment to you is to keep you up to date with what is happening in the world of taxes.
When it comes to tax season, the norm is to panic when April roles around. When in fact, the time to review your tax planning is before the end of the year, to avoid any surprises in April.
In this edition of Insider Look, we will provide some tax and accounting insights for your small business.
Have a look:
2. What are Depreciable Assets for a Business
3. What is the difference between Profit vs Cashflow?
4. How to avoid an end of year surprise when it comes to Profit and Cashflow?
5. Our Professionals
Stay tuned for our January newsletter for our personal income tax list and personal income tax tips!
Connecting with my clients has been my driving force in creating quality relationships. It is always great to hear from you, so please drop me a line at clientcare@Arjcpa.ca or you can reach me directly at ajaffer@Arjcpa.ca.
Please note that our email@example.com email address has now changed to clientcare@Arjcpa.ca.
The Financial Tools on our website, www.arjcpa.ca,, are always there to assist you whenever you are searching for an answer regarding your tax planning or in your everyday financial life.
Kindly note that our office will be closed for the holiday season from Tuesday, December 24, 2019 at 2:00 pm and will re-open on January 2, 2020.
If you have any questions or comments, do not hesitate to contact us at clientcare@Arjcpa.ca or call us at 905-629-7720. As always, I look forward to hearing from you!
As the year ends and we turn to a new decade, we think about all we are grateful for. Our relationship with you is one thing we treasure. Thank you for the opportunity to serve you.
On behalf of my family and staff, I wish you abundance, happiness, and peace in the new year of 2020, a new decade filled with hope. Happy holidays!
Ali Raza Jaffer, CPA, CGA, MBA, BComm
President, AR Jaffer Professional Corporation
Chartered Professional Accountant
1. Automation is here! No more chasing receipts!
At AR Jaffer Professional Corporation, we are looking at opportunities to make your experience with us an easy and memorable one!
Envisioning our clients process to automation, has been our theme over the past few years. We are now onto the next phase of the automation process.
Tired of keeping your receipts for a year in shoe boxes?
AR Jaffer Professional Corp. has found a way to make the receipt box go directly into your QuickBooks!
Simply by downloading a mobile app, you can begin taking pictures of your receipts as soon as you have it in your hand!
The system will set up the rest. No more envelopes, no more scrambling around, minutes before tax season descends on you!
Please call our office at 905-629-7720 to learn more or register or email me at firstname.lastname@example.org.
We look forward to showing you how you can have fun and cut down your time with your bookkeeping!
Check us out on our social media platforms:
2. What are Depreciable Assets for a Business?
Depreciable assets are business assets which can depreciated also called long-term assets. Below is a list of some property items that fall in depreciable assets:
- Real estate (except land)
- Office equipment
- Heavy equipment.
Depreciation is a "non-cash" expense that reduces the value of an asset over time.
When you are considering purchasing depreciable assets, consider purchasing before the end of your fiscal year. This will create the opportunity for you to claim tax depreciation or capital cost allowance and reduce your income
3. What is the difference between Profit and Cash Flow?
These are common misunderstandings that business owners face when it’s time to pay taxes. Let’s look at what the difference is between Profit
Cashflow is simply the cash that comes in and goes out of your business each day. As the saying goes… money in, money out!
The Canada Revenue Agency (CRA) will tax you on your profit of your business operations from your end of year accounts. The calculation used to determine if you have made a profit is to add up all the revenue expenses, then subtract all expenses incurred over the past year. This will leave your profit balance.
During the year you have sales of $100,000 with running costs during the year totaling $60,000. A need occurs and you decide to purchase a piece of machinery at $40,000.
Logically it is calculated as $100,000 sales – $60,000 expenses – $40,000 machinery. Based on this calculation, you have made zero profit.
But wait, this is cash flow and does not reflect profit.
As the machinery is a depreciable asset, it will last more than a year. This is where you must depreciate the asset over time, meaning you cannot deduct the whole cost at one time. If the rate of depreciation is 10%, then the cost will be $4,000 for the year ($40,000 multiply by 10%).
To calculate your profit, it will be $100,000 less $60,000 in expenses less the $4,000 depreciation, which equals $36,000. This is your profit, $36,000, and must be reported to CRA. You will have to pay tax on that amount.
Even if you have a zero balance in your bank account!
To learn more click here to got to our Virtual CFO Services or email me at email@example.com.
4. Save money and avoid an end of year surprise!
Tips to save money and balance the difference between Profit and Cashflow:
- Set a budget
- Prepare a monthly forecast
- Plan to purchase new assets at the start of your financial year
- Hold on purchasing large amounts of inventory at the end of the year, unless you find it to be a great bargain and you have the cash
- Plan to pay for items over time to keep your cash intact
- Lease assets: Refrain from buying assets, especially if they are not used all the time
- Pay attention not to draw too much from the business during the year
Having the cash ready when the tax bill arrives, can be a daunting task.
Avoid the stress of paying a big tax bill and schedule the dates for when your business taxes are due. By planning in advance, you will not be caught off guard when the bill comes in then finding your cash reserves are low.
Call me today at 905-629-7720 or email me at ajaffer@Arjcpa.ca or visit our website at www.arjcpa.ca to learn more.
5. Our Professionals
Ali Raza Jaffer, CPA, CGA, MBA, BComm.
Fatima Rasul, ACCA (UK)
Sajita Manoj, BComm., CPA Student
Sumati Sharma, BComm, MComm., CPA Student
Pacita Padilla - BComm.
Ali Jawad Rajani - BBA
Salma Ceizar - Marketing and Administration Coordinator
Jessy Fernandes - Administrative Assistant