The Joy of Accounting

Well, after the accountant left I had to run up and fix the aformentioned (far too many times to bother linking to what I mentioned… erhm… “afor”) ex-coworkers system. Install a virus scanner, nuke the system restore information (as the final virus was hiding in C:\system volume information….), re-run virus scanner, wait for it to finish, try the CD (the other problem was the CD wasn’t working so they couldn’t install the drivers for their fancy all-in-one HP printer/scanner/copier), wait for drivers and software to install, test, prove it all worked, headed home.

The accountant was awsome. She showed me how to reconcile things properly, went through my accounts and fixed up a bunch of things, moved things around, re-arranged the way I had my owners equity set up…. basically got everything in order. I have a few minor expenses I didn’t put in (missed a month of internet or hydro or cell phone here or there), but still have to, not a big deal. Found out running a small business sucks if you actually make money tax-wise.

Because I have relatively minor expenses, with my car (insurance, amortization) and computer equipment being most of my expenses, and pulling in pretty good wage, I get to owe the government a wack of money at the end of the year for CPP and stuff. Unless I start spending a lot (I think she said I’d manage to save about $300 on taxes and paying the government if I spent $5,000 in expenses, which is a bit silly to me), I’ll be paying the government through my nose. Being a sole propriatorship doesn’t have a lot to do with it though, it’s simply because I don’t have enough expenses. I’m thinking that it might be time to quit being frugal and start buying stuff that I want/need that is a justifyable expense. IE: computer parts. Can’t hurt right? 🙂 I’ll have to ask if paying off my car with cash would help out here. It just might, and it’d make my mom happy to know that that albatross is off from my neck. If not, this will probably be my last “big income” month for the company, as I’m scheduled to go full time with $newcompany any day now. I’ll still be able to write off things like computer equipment and internet access, but not as much of the car, or gas, or lunches all the time anymore.

It was still very good to get all my books in order.

Maybe my legions of readers could suggest (legal) ways for me to suddenly find myself a whole lot of expenses before the end of the year?

8 Comments on “The Joy of Accounting”

  1. Need a comfy office chair? That can be $500 in expenses right there. The thing to remember about bigger ticket items, is it may be $300 this year, but then it will be like $250 next year and continue on becoming less and less as your assets depreciate.

  2. Oh yea, I’ve got all my gas, any food I have that can remotely be called ‘business related’, computer equipment, etc…. but it’s just not enough! Maybe there’s something I”ve been paying all along that I can call a business expense.
    Of course, I’ve been putting money aside for just this situation…. 20% of each paid invoice goes into a separate part of the account so that it will be untouched with the gov’t comes calling. I was just hoping to reduce that number 🙂

  3. well when it comes time to pay your CPP talk to your accountant about being able to write it off. Apparently ( from what I remember the accountant told Jaroc ) part of the employers CPP portion is a write off ( in some way ). I don’t know exactly how it works, or how much can be written off though. When I get home, I’ll go through my list of expenses that we’ve used for Jaroc’s business, see if anything helpful might come up!

  4. Also remember come spring time you will have one mondo tax bill. So you get the money for your own use until then (good), but bad because you can’t spend it all.
    Next year they will put you on a installments. What this means is March can be very lean as you have 1.25 years taxes to pay all at once (trust me on that one, I’ve been there).

  5. Here’s a couple of write-off ideas:
    – Charitable donations (incl. time if you have it set up)
    – Do you work from home? then the % of the area that you use for work can be written off (bathroom, kitchen for lunch room , your office). As you’re renting you don’t have to worry about depreciating the asset, as you don’t own it . Don’t forget to include any insurance, heat, hot water etc. It’s a % of ALL your expenses for renting 🙂
    – If you were a corp, you would be entitled to a AGM, in say, Tahiti (as long as it would benefit the business that it was there – board of directors being relaxed IS a tangible benefit BTW)
    – If your company puts money into YOUR RRSP before it hits your paycheck(ie. it’s not a “personal withdrawal” rather an employee benefit…), the company gets a deduction, and YOU don’t pay tax on it… (I don’t know how this would work in a sole proprietorship, tho it should somehow)
    – Hire firefly to do “maintanence” on your machines, or to “clean the office” whatever. This will give YOU an expense, and shift the money onto HER tax bill, which should be in a lower tax bracket.
    – Those nice Ikea desks you bought a while back? sell them to the company. 🙂
    – How about that TV for the “coffee break room” (that would fly in a corp, maybe not a proprietorship…)
    I can probably give you some others, but I gotta run right now (golf with work… rough life I know )
    We need to do sushi sometime anyways 🙂