You know they mean well . . .

If friends and family members give you advice that sounds too good to be true, it probably is.  There are times when it really pays to ask a professional.  Getting accurate income tax and business advice is one of those times!

I founded this accounting firm in 1990 after having gained nine years of experience in other accounting firms.  During my career I have had extensive experience dealing with Canada Revenue Agency and its auditors, as well as annual tax update courses, reading the Income Tax Act and doing tax research.  Through formal training, constant professional education, and practical experience, I know how taxation and deductions work. 

Some common pieces of bad advice from people who mean well:  

*  Bad advice:  You should lease a vehicle because it's 100% deductible  (Truth:  Over time buying gets the same deduction.  There will be personal tax consequences for the personal use of a company vehicle whether it is owned or leased by the company.)

*  Bad advice:  You can throw in the odd fuel or insurance receipt for using the family car.  (Truth:  The deduction has to be tied into actual kilometres whether it is leased or owned.  I can give you a mileage log and explain its importance.)

*  Bad advice: Dividends are always the best way to get paid by the company and there is no income tax on them  (Truth:  Dividends are taxed on the person's income tax return, then there is a tax credit which may eliminate the taxes.  I can also tell you several advantages to taking wages or a wage/dividend mix.)

*  Bad advice:  You can pay a wage to a three year-old child.  (Truth:  Business expenses have to be reasonable.  Wages to children are risky if not well documented.)

*  Bad advice:  You should split your wages from the company 50/50 with a spouse.  (Truth:  Your spouse should contribute equally to the skills and effort for the company to take an equal wage.  Yes, pay your spouse but keep it reasonable.)

*  Bad advice:  You can deduct clothing, haircuts, nail styling.  (Truth:  These are personal items, ask me about the rare instances they may be claimed.  Safety gear is deductible.)

* Bad advice:  You can deduct all your meals once you are in business.  (Truth:  I can explain the strict rules about when and how much of a meal or entertainment amount may be claimed and how to document them.)

*  Bad advice:  The company should always own your truck.  (Truth:  Whether the company or you should own the truck depends on the truck's age, current market value, how it is financed, how economical it is to drive and how many business kilometres are put on it each year.  Let me help you make the right decision about who should own the vehicle.)

* Bad advice:  It's so easy to do bookkeeping, all I need is a program like Simply Accounting.   (Truth:  Bookkeeping is not intuitive, it is a learned skill.  The programs are tools but do not teach you how to do bookkeeping.  I can teach you bookkeeping or help you find a class.)

* Bad advice:  A $100 expense knocks $100 off my tax bill, so I should pick up this tab. (Truth:  An expense reduces the tax bill by a percentage of the expense.  In an consultation with me, you can learn how little tax an expense saves you, and a better way to manage your money.)

* Bad advice:  The guy doing the same contract job as you pays little or no income tax.  (Truth:  He's bragging, mistaken or at risk of an audit and penalties.  Learn the truth from me, a professional.)

*  Bad advice:  It's worth the gamble to cheat on your business expenses.  (Truth:  You may not like the consequences.  The government can charge penalties of up to 50% of the tax they were cheated of, plus add interest to the taxes and the penalties.  The tax "saved" can quickly double!  In a truly serious case, criminal charges may be laid.  Learn how to audit proof yourself with my professional advice on what may be deducted and how to keep good records.)