Alberta Outdoorsmen Forum

Alberta Outdoorsmen Forum (http://www.outdoorsmenforum.ca/index.php)
-   General Discussion (http://www.outdoorsmenforum.ca/forumdisplay.php?f=2)
-   -   Taxes freaking out now please help (http://www.outdoorsmenforum.ca/showthread.php?t=86104)

fishnut9 03-18-2011 02:49 AM

Taxes freaking out now please help
 
Ok so i dont know what to do now. I just realized that my wifes business writeoffs are actually deducted from her total income not the actual taxes. That only gives me a couple hundred dollars off. Does anyone know if this is true. She owes 5800$ to the government now here is my question. I want to go to hrblock then have them do the taxes for me. if i dont like the results can i back out for a second opinion. I have 3000 to go towards the taxes. After hr block i will see if i can get a accountant to check it out. Problem is what if he charges me 1000$ leaving me 2000$ for taxes only to have the same number pop up as hr block. Now im 1000$ short. Do accountants allow free evaluations or no. I just dont want to spend the money to get the same results.

Dennis780 03-18-2011 03:14 AM

Quote:

Originally Posted by fishnut9 (Post 872367)
Ok so i dont know what to do now. I just realized that my wifes business writeoffs are actually deducted from her total income not the actual taxes. That only gives me a couple hundred dollars off. Does anyone know if this is true. She owes 5800$ to the government now here is my question. I want to go to hrblock then have them do the taxes for me. if i dont like the results can i back out for a second opinion. I have 3000 to go towards the taxes. After hr block i will see if i can get a accountant to check it out. Problem is what if he charges me 1000$ leaving me 2000$ for taxes only to have the same number pop up as hr block. Now im 1000$ short. Do accountants allow free evaluations or no. I just dont want to spend the money to get the same results.

Yea, I know your pain my friend. I run two businesses, and had to learn alot of this the hard way also. The message is a little jumbled, but let me see if I can offer some assistance.

First, from what I gather, the business is registered under your wifes name alone? If so, the amount owing doesn't affect your taxes, only hers, and the gov't keeps taxes separate, even for married couples (though you can file together if you wish). A truly good business accountant will not look over your numbers for free, that goes without saying. Anyone willing do bend over backwards and so something free is either very nice, or very bad at what they do. Accountants are swamped during tax season, so the latter is more likely. HR Block can do very well for small business taxes. My wife used them with her home business. It was fast, easy, and I paid my accountant to look it over afterwards, and he said the return was almost exactly how he would have done it.

Why is HR Block bad? The same reason it is good. They service thousands of clients every day. They perform the same tasks every day, and can process your taxes swiftly. However to them you are a number, one of thousands that are in line behind you.

A real accountant does a good job, because his reputation is on the line.

Just remember that you aren't going to jail if you don't pay the government what you owe right away, you filed, and you will get a letter giving you your payment options. On that paper, you can call the offices and work something out if the options don't suit your financial state. The government doesn't want to put people in jail, they want to fine you, collect interest on money owed, and get paid. They will work with you, but try your best to pay it back asap, interest is the devil.

Dennis

Dennis780 03-18-2011 03:15 AM

$1000 bucks is a little steep, how big is your business? I pay around that, for both combined.

fishnut9 03-18-2011 03:36 AM

its just a dayhome. We would have had the whole amount but we spent half of the 5800$ on our wedding. Now we only have 3k. But like i said i just dont want to spend more money on an accountant to get the same result at half price.

Dennis780 03-18-2011 05:17 AM

Quote:

Originally Posted by fishnut9 (Post 872383)
its just a dayhome. We would have had the whole amount but we spent half of the 5800$ on our wedding. Now we only have 3k. But like i said i just dont want to spend more money on an accountant to get the same result at half price.

Firstly, congratulations! Now lets try to save you some money, shall we?

Your business is home-based. You can write that off. If you have your taxes in front of you, it's on line 9945 of the T1. There is also a child care tax credit, of which I know nothing about (never ran a day home, kids have too much energy).

Before you go to an accountant (or HR Block), you will want to know the dimensions of your home, and the monthy cost. Do you own the residence? Because sometimes you can breach your renters agreement or lease if you didn't notify the holder that you are using the space for a business. If thats the case, no worries, just don't write it off, and no one will be the wiser (but I'd suggest stopping until you reach an agreement).

Do you have kids of your own? Because that is also a tax write-off (who said kids cost money hey?).

If you own the home, is it your first? Because that is also a tax write off!

See where this is going? The important thing to remember is not what you made, is what you SPENT in a year that is more important. Anything including food can be used as a tax write-off for child care.

In fact, I remember reading that in 2004 (I think) Pepsi-Cola actually got a refund come tax time. This is because even though they made billions, they donated, paid out bonuses, etc.

You aren't in as much trouble as you think. If you want more tax writeoff stuff, I can dig. I'm not sure where you are from, by my accountant also could do a number on your returns, but it would be in the neighborhood of 300-400 bucks, and he wouldn't review them for free.

Let me know if you have any other questions! Good Luck!

Dennis

Frans 03-18-2011 09:53 AM

I'm in a similar boat, though I think I put aside enough to pay up. Switched from sole-proprietor to incorporated last fall. Always used Quick Tax (not Turbo Tax) software for the filing which worked very well. But the Incorporated package isn't as clear and straight cut as the Home Business package. The terminology is killing me. What are Directors Fees? :-)

I'm gonna need to report to someone who knows and pay my dues I guess.

DarkAisling 03-18-2011 10:34 AM

Quote:

Originally Posted by fishnut9 (Post 872367)
I just realized that my wifes business writeoffs are actually deducted from her total income not the actual taxes. That only gives me a couple hundred dollars off. Does anyone know if this is true.

That is correct.

ishootbambi 03-18-2011 10:40 AM

Quote:

Originally Posted by fishnut9 (Post 872367)
Ok so i dont know what to do now. I just realized that my wifes business writeoffs are actually deducted from her total income not the actual taxes.

that reminds me of when kramer tried to get jerry a new stereo by screwing the post office. "they know....and theyre the ones writing it off......."

its amazing how many people dont do the research before trying to run a business. dennis has given you good advice fishnut. to others reading this and thinking about starting a business, these are the kinds of things you should learn about BEFORE jumping in. good luck fishnut.

wwbirds 03-18-2011 10:48 AM

Quote:

Originally Posted by fishnut9
I just realized that my wifes business writeoffs are actually deducted from her total income not the actual taxes. That only gives me a couple hundred dollars off. Does anyone know if this is true.
but you had a pamphlet or something that you felt indicated otherwise when we tried to explain it last week. As we said last week get an acountant to set this up correctly once and for all. If you guess and get it wrong it can come back to bite you 2-3 years from now for a lot more than you are willling to risk right now.

Frans if you converted from proprietorship to incorporated last fall it is unlikely you needt to be concerned with directors fees.
Generally large public corporations (not private) would have a Board of Directors who receive a fee (honorary) for directing the affairs of the business. If incorporated within 6 months you probably have to wrap up a partial proprietorship year (to incorportion) and then your first fiscal year return for corporation will be due 6 months after fiscal year end (fall of 2011).
As above spend a few dollars to get it set up right as your trial balance from the proproietorship year end is very necessary to the start up of the incorporated entity. Well set up to begin with is essential to regular maintenance, planning and reporting.

fishnut9 03-18-2011 01:20 PM

Quote:

Originally Posted by wwbirds (Post 872650)
but you had a pamphlet or something that you felt indicated otherwise when we tried to explain it last week. As we said last week get an acountant to set this up correctly once and for all. If you guess and get it wrong it can come back to bite you 2-3 years from now for a lot more than you are willling to risk right now.

Frans if you converted from proprietorship to incorporated last fall it is unlikely you needt to be concerned with directors fees.
Generally large public corporations (not private) would have a Board of Directors who receive a fee (honorary) for directing the affairs of the business. If incorporated within 6 months you probably have to wrap up a partial proprietorship year (to incorportion) and then your first fiscal year return for corporation will be due 6 months after fiscal year end (fall of 2011).
As above spend a few dollars to get it set up right as your trial balance from the proproietorship year end is very necessary to the start up of the incorporated entity. Well set up to begin with is essential to regular maintenance, planning and reporting.

Oh don't even give me that. I told you what I could deduct I never said off what. As for you guys telling me about not doing research we had the money so we weren't worried.then some one who said they would pay for our photographer backed out last moment so we had to take the money out of the tax fund.

wwbirds 03-18-2011 01:31 PM

Nwte
 
not going there again bye

fishnut9 03-18-2011 01:35 PM

Quote:

Originally Posted by wwbirds (Post 872784)
not going there again bye

Then don't I asked for advice not criticism.

MWD 800 03-18-2011 01:41 PM

Get an accountant.



Thats all there is to it. I am a consultant and I wouldn't dream of doing my own taxes. Accountants are paid to know all of this stuff. You aren't saving any money if you do it wrong and end up having to pay. H and R block are a rip off.

Albertadiver 03-18-2011 01:43 PM

Quote:

Originally Posted by MWD 800 (Post 872794)
Get an accountant.

Either that or go find some garden gnome to serve some mojito's to the person that will audit your file.

Seriously dude, people try to give you some advice, and when it's not to your liking you ignore it.

Pay for a freaking accountant. That's what they're their for. Mine has saved me thousands of dollars in taxes. If you think of that in terms of an investment, a little money in means lots of money saved.

MWD 800 03-18-2011 01:44 PM

oh and accountant fees are a write off

DarkAisling 03-18-2011 02:05 PM

Quote:

Originally Posted by Albertadiver (Post 872799)
Either that or go find some garden gnome to serve some mojito's to the person that will audit your file.

Where's the "Like" button!

We really need some sort of post ranking system.

mooseknuckle 03-18-2011 02:28 PM

Quote:

Originally Posted by DarkAisling (Post 872822)
Where's the "Like" button!

We really need some sort of post ranking system.

Agreed! Some posts deserve the slow clap cap tilt.

Coulee 03-18-2011 04:41 PM

I have had the same professional accountant do my taxes since 1996. Never had a bad experience. This year he charged me $115.00 to do them. Money well spent for a proper return and peace of mind. I don't know what H&R will charge you, but you won't be getting as qualified and experienced help as you will with a proper accountant. It might be too late for this year, but for 2011, get an accountant.

horsetrader 03-18-2011 04:51 PM

Quote:

Originally Posted by fishnut9 (Post 872367)
Ok so i dont know what to do now. I just realized that my wifes business writeoffs are actually deducted from her total income not the actual taxes. That only gives me a couple hundred dollars off. Does anyone know if this is true. She owes 5800$ to the government now here is my question. I want to go to hrblock then have them do the taxes for me. if i dont like the results can i back out for a second opinion. I have 3000 to go towards the taxes. After hr block i will see if i can get a accountant to check it out. Problem is what if he charges me 1000$ leaving me 2000$ for taxes only to have the same number pop up as hr block. Now im 1000$ short. Do accountants allow free evaluations or no. I just dont want to spend the money to get the same results.

Get an accountant he will save you more in the long run than what he cost you.
Should cost no more then 3 to 4 hundred and you can use it next year as a deduction.

fishnut9 03-18-2011 08:12 PM

Quote:

Originally Posted by horsetrader (Post 872943)
Get an accountant he will save you more in the long run than what he cost you.
Should cost no more then 3 to 4 hundred and you can use it next year as a deduction.

See that's affordable. I called one accounting firm and they said they charge 2k for small businesses.

FishingMOM 03-18-2011 09:07 PM

Quote:

Originally Posted by fishnut9 (Post 873125)
See that's affordable. I called one accounting firm and they said they charge 2k for small businesses.

That is about right for small businesses.
WWBirds is the MAN when it comes to accounting, but you blew him off. Very stupid move.
Instead of reading a brochure that you hope is right why not rely on the men and women around you give you proper advice.

End of the day, you need an accountant.

Rackmastr 03-18-2011 09:13 PM

Sure doesnt take long to read some previous posts to realize that a person who seems to act like they know everything doesnt really take advice very well from the people that do.....

Makes me chuckle a bit to see that same person asking for help....

greylynx 03-18-2011 09:32 PM

Quote:

Originally Posted by wwbirds (Post 872784)
not going there again bye

:)

I knew you meant good, but let them learn the hard way.

densa44 03-18-2011 09:42 PM

Don't listen to them!
 
File it any way you want. Revenue Canada will assign an accountant to your case and won't charge a cent. They'll then tell you how much you own plus interest and penalties.

Nothing to it. Takes all the guess work out.

Or you could pay your own on accountant. Your choice.

Lefty-Canuck 03-18-2011 09:52 PM

My Wife had a dayhome as well and we use an accountant for the taxes, I think he charged $120.00. The crappy thing about dayhomes is you have to pay almost double the EI and CPP when you are self employed to the gov't !! For some silly reason and thats what really bit us. You basically have to save about 30% of what your wife pulls in to cover the cost of taxes at the end of the year. Then you have the money (my wife used a toally separate account to deposit that money every month) to front it out come tax time. She used the 30% rule and had a small amount left over in the account when it was all said and done. Again take the advise and go with an accountant over H&R block.....had bad experiences with them.

Lefty

fishnut9 03-19-2011 02:25 AM

Let me explain this again. I never said I would do my own taxes. I asked whether or not to go to hr block. I was never wrong at any point. Also ww didn't know anything about claiming utilities even though that info I posted was strait from the government site.so excuse me for not trusting anyone that didn't know squat about dayhome write offs

Lonnie 03-19-2011 05:28 AM

H &R block are for the masses most of them that work their just plug numbers in to a form. they would not even begin to know what you are or are not allowed for deductions. your best bet is find an accountant that knows taxes for day cares or do a lot of research and figure out every possible deduction that you can get and do them your self remember its a lot better to take a small percentage of a lot of deductions than full deductions on a few things.small percentages on a lot of things makes it harder for them to argue about during an audit.

FCLightning 03-19-2011 07:10 AM

Quote:

Originally Posted by fishnut9 (Post 873450)
Let me explain this again. I never said I would do my own taxes. I asked whether or not to go to hr block. I was never wrong at any point. Also ww didn't know anything about claiming utilities even though that info I posted was strait from the government site.so excuse me for not trusting anyone that didn't know squat about dayhome write offs

Why would anyone bother to try and help?

An accountant cannot manufacture deductions from your taxes for you. You are the best one at manufacturing deductions (didn't you already want to claim a higher percentage of square footage than the accountant felt comfortable with?). Keep your fingers crossed on the audit.

MWD 800 03-19-2011 07:20 AM

A bunch of us have said H&R Block are a rip off. Is that plain enough for you?

Joe

slipbobber 03-19-2011 07:29 AM

Why would anyone who is obviously smarter than everyone on this board be asking foe help? Just about see it all now.


All times are GMT -6. The time now is 10:46 AM.

Powered by vBulletin® Version 3.8.5
Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.