Top 10 tax tips for 2009

For 2009, here are my 10 resolutions for saving more taxes:

Resolution #1: Open a TFSA. The new tax-free savings account, launched Jan. 1, is the ideal place to put up to $5,000 of savings and earn tax-free income and/or gains for life. Any withdrawals are not taxed, do not negatively affect eligibility for government-tested benefits and can be re-contributed the following calendar year.

Resolution #2: Maximize RRSP contributions. The RRSP limit for 2009 is the lesser of 18% of 2008 earned income or $21,000. Get a head start on your 2009 contribution today.

Resolution #3: Set up a spousal RRSP. The primary benefit of a spousal RRSP is that funds withdrawn can generally be taxed in the hands of the (hopefully) lower-income spouse.

Resolution #4: Earn tax-efficient investment income. For those who have maxed out their RRSP and TFSA contributions, consider tax-efficient investment income outside of these tax-sheltered plans by investing in Canadian dividends, which are eligible for the dividend tax credit, and capital gains, which are only half-taxable.

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The Importance of Accounting

Accounting can seem a dreadfully boring subject to some, but it gets its moment in the sun whenever there is a financial crisis . . . remember Enron? This time around is no exception. During the panic of September, some people were calling for a suspension of mark-to-market accounting, and while they did not get what they wanted, they succeeded in inserting a provision in the first big bailout bill to study the relationship between mark-to-market accounting and the financial crisis.

A brief, high-level explanation of the dispute: Under mark-to-market accounting, assets on your balance sheet have to be valued at their current market values. So if you have $10 million worth of stock in Microsoft, but that stock falls to $5 million, you have to write it down on your balance sheet and take a $5 million loss on your income statement. The criticism was that mark-to-market was forcing financial institutions to take severe writedowns on assets whose market values had fallen precipitously, not because of their inherent value, but because nobody was buying these assets - think CDOs - and that banks were becoming insolvent because of an accounting technicality. Under this view, banks should be able to keep these assets at their “true” long-term values, instead of having to take writedowns due to short-term market fluctuations.

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IMPORTANT BOOKKEEPING TIPS

1. Do not throw away cancelled cheques.
2. Either file a copy of the sales invoice numerically or by customer, whichever is more logical.
3. Keep a file of all invoices and bills that are paid.
4. Perform a bank reconciliation each month.
5. Periodically, count the inventory on hand.
6. Review accounts receivable on a regular basis and at year-end; determine those that are uncollectible.
7. Register for a business number (for GST and payroll taxes).
8. Discuss your financial statements with your accountant.
9. Remember to keep your business affairs separate from your personal affairs. OPEN a separate chequing account (very important).
10. Pay all transactions by cheque if possible; it is easier to keep track of cheques.
11. Detail deposit slips and keep a copy for your records.
12. If your books don't balance, try dividing the amount (that your out) by nine.
13. If your business is not as profitable as you expected, don't be afraid to ask for assistance.

Source : http://profitactivists.com/

Accounting Informational Systems

Just several years before, people, whose work consisted in conducting the financial account of organization, were engaged in much more tedious work than now. Now, these workers are helped by machines – computers, the computer programs are specially created for the conducting of such kind of work. Some people can say that before also existed such «machines», but do you remember how much nerves it cost for you just to reprint this miserable payment because of casual jamming of the keys?! Before, work which was conducting during the whole day by several workers, computer makes immediately, you just need to enter information and all is done. So what does it mean actually«It is the golden age for small and middle-size business»? It means that for the conducting of business, businessmen don’t necessary need to hire a lot of skilled employees, they can simply purchase good computer with specialized, for their type of business software. In this way owners of the business will save money (decreasing amount of money spending on salaries and production) and produce more free time in oder to do something else for earning more money.

Now, I would like to turn your attention to an accounting information system and explain what it is. So, accounting information system is database which emits bookkeeper to meet his engagements. Bookkeeper’s engagements means record keeping in accordance with the legislation. Legislation, unfortunately, compels Ukrainian bookkeeper to conduct accounts of two types: tax, book-keeping.

For the conducting of book-keeping and tax accounts a book-keeper needs information. Namely: agreements, date of conclusion, sum, terms of payment, date of fulfilling a commitment.

It is principally significant that an accountant will make actions only having on hands an agreement or writing active document about transferring of the money to a supplier or the extract of an account to a buyer. For posting, i.e. reflectioning in an account, on the accounts of record-keeping, for example - receiving materials, an accountant can with help of a computer network get information from a storage which is, maybe, hundreds or thousands kilometers away, that materials are acted on a storage. So for accountant, regard to Accounting IS, for him it is not necessary to wait till papers will be brought.

Development of computer technologies influenced very much on the whole world not speaking just about separate part - accountings information systems. With development of computers, develops software under each type of computers. For example about 5 years before accountants prepared the annual accounting in OS - DOS that was an innovation for many and a little bit difficult because far not all people could afford a computer, and work in DOS required from a user certain skills of work in it. Nowadays appeared more powerful computers as a result appeared other operating systems, accordingly other programs. Today, practically everybody is able to use a modern computer, and the use of accounting’s programs became simple and clear for the people who work in this sphere.

Creation of machines able to get and pass the enormous volume of information influenced in sharp reduction of time for treatment of information and terms of making a decision, reduction of amount of people working for an enterprise.

Before on storages worked a lot of people which wrote down the name, amount, cost of got and given out materials in the paper cards of account. Then they made themselves «Financial report after several month several year». In this gaps were put information about arrival and expense of materials.

In conclusion it is obvious to point out that today, each business conducts all this work with help of programs: informational, accounting and etc. Technique development allowed to create such structures of bookkeeping programs which allow to take into account everything to the little things in the mode of the real times. If some years before for treatment of accounting payments people required a month, than now, if you have all required documents, acts, payments it is matter of two days. Only regard to development of technique’s «opportunities» - we can take into account and process more large amounts of information. Development of technique results in possibility of creation of more difficult (I mean detailer) informational systems, including book-keeping, complicating (going into a details) the structure of the informative systems of accountant, and simplifying book-keeper’s life.

Source: http://www.carolinaarticles.com

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