How An Accountant Can Help With Shareholder Disputes

Corporations can be complex entities.

While setting up a corporation is relatively easy, having “too many cooks in the kitchen”, so to speak, can create disagreements and heated arguments.

Whether disputes arise due to the shareholders’ vested interest in the company, or a proverbial “hot head”, dealing with these disputes can be lengthy and costly.

With the help of our certified accountants, Liu & Associates can help you navigate these disputes by gathering pertinent information regarding your corporation.

Keep reading to learn more about how shareholder disputes are resolved and how an accountant can help:

What Happens When Shareholder Disputes Arise?

Most businesses in Canada have one or more owners or shareholders.

Because shareholders hold a stake in the company, disputes among shareholders and business owners can lead to considerable disagreement and complicated litigation.

This means that a corporation can file taxes, borrow or lend money and can sue and be sued.

Shareholder disputes arise when the owners and managers of a business argum among themselves.

Shareholders and owners have the final say when it comes to making decisions that will affect the business.

The rights of the shareholder include the right to vote at shareholders’ meetings, the right to attend these meetings and the right to all information regarding the affairs of the corporation.

When these rights are not respected, a shareholder can sue the shareholders or owners who failed to respect them.

Most shareholder disputes must be resolved through arbitration instead of by the courts.

The process can be messy and expensive, requiring the support of a lawyer or litigator.

However, accountants can be highly beneficial in resolving these situations as well.

How Can an Accountant Help During a Shareholder Dispute?

During a shareholder dispute, accountants can act as either a receiver or inspector.

Receivers and Inspectors

As a receiver, the accountants are put in charge of the stakeholders’ interests by taking possession of the assets in a dispute.

Receivers can also conduct an auction between disputing shareholders which results in one shareholder buying the other out. They can also sell or liquidate the business and divide the proceeds to the respective stakeholders.

As an inspector, the accountant’s job is to gather information and report the discovered facts. This can include examining financial records, gathering information from officers and employees about the company’s affairs and completing a business valuation.

Business Valuation

Business valuations are conducted by the accountant during a shareholder dispute to determine how much the shares are worth so that a sale can be facilitated.

This is a complex process that requires a solid understanding of a host of valuation principles and application.

Income Tax Returns

Most income tax returns define shareholder equity and its changes for each year.

However, even if this is not reflected on the return, having an accountant review the income and expense information is helpful and can identify situations where returns don’t match up.

Oftentimes an innocent oversight, this issue can sometimes be a deliberate omission and having this knowledge is useful during litigation.

Financial Statements

Quarterly or monthly financial statements should be reviewed to identify any discrepancies between the records and income tax returns.

A qualified and professional accountant can review these documents to ensure there is no deliberate wrongdoing.

Mitigate Shareholder Disputes with Liu & Associates

Our accounting firm can quickly put together a team of experts to analyze taxes and business valuation, as well as use forensic accounting, to help you with your shareholder dispute.

When it comes to legal issues and litigation, a company’s worst enemy is being unprepared.

Trust our staff of professional accountants at Liu & Associates to provide you with our comprehensive understanding and investigative abilities to help you mitigate shareholder disputes.

Contact us today!

How An Accountant Can Help With Strategic Business Planning

Do you know where your business is heading?

Every business needs a strategy in order to reach their goals.

However, without the proper eyes to oversee the myriad of data involved in growth and development, that path can become confusing and impossible to navigate.

That’s why our professional accountants at Liu & Associates want to help you with strategic business planning.

Keep reading to find out what strategic business planning is and how an accountant can help you achieve your company’s goals:

What is Strategic Business Planning?

Strategic business planning focuses on identifying long-term business objectives and ranking them by importance.

This can be a complex process and involves gathering information, analyzing data and conducting assessments of available business resources.

The point of this entire process is to ensure that a company continues to develop financially and socially.

When it comes to strategic business planning, the goal is to identify and improve the framework, goals and direction of a company by considering its marketing capabilities, technological advantages and available resources.

This creates a foundation in order to develop actionable plans and solutions in order for the company to achieve its ultimate goals.

The entire process can be a huge undertaking, which is why having an accountant aid in strategic business planning can be highly beneficial.

How Can an Accountant Help with Strategic Business Planning?

Accountants do so much more than simply organize money and finances.

Highly trained accountants, such as our team at Liu & Associates, are capable of creating an accounting system that checks, supports and lays out a business’s strategic management goals.

They are also able to adapt to change, meaning that they can accommodate new regulations that can affect your business as well as develop new strategies should your business need to head in a new direction.

Being able to factor in all these considerations means that a company can make better and informed decisions on how to save and spend their money.

Accountants can also help businesses create a strategic business plan by:

  • Setting Profitability Goals. Business decisions cannot be left to chance, especially regarding financial performance. Accountants can collect the right type of data and analyze it so that business owners can make better long-term profitability goals.
  • Creating Acquisition Strategies. Accountants can help develop acquisition strategies in order for businesses to cut costs, consolidate and make beneficial business purchases.
  • Supporting Risk Management and Control. Accountants can help companies monitor the status and health of their business activities by quantifying risk management objectives to make them relevant and measurable.

Regardless of what you are planning, our practitioners will make sure it makes sense from a financial point of view.

The best strategy is one that is clearly laid out and easy for your company to follow.

Strategic Business Planning Services

Strategic business planning can cover any number of things, from simple financial goals to future leadership and growth.

While many business owners have a great plan for their company, it can be difficult to create the strategy when you are overwhelmed by the amount of financial information involved in making that plan happen.

If you are starting a business, or interested in getting your company on the right track, don’t hesitate to contact our expert team of accountants at Liu & Associates.

We will be able to take a look at your company and offer advice on many aspects of your business including tax planning and optimization, accounting policy development, business growth and development and cost analysis.

Get in touch today!

What is a Joint Venture?

Did you know that the streaming site HULU is a joint venture between NBC and Disney?

Or have you ever noticed how there is a Starbucks at every Barnes & Noble?

These are examples of popular and successful joint ventures.

Any two businesses can enter into a joint venture in order to make a profit, diversify a product line or to simply become competitive in their industry.

These types of business alliances are growing in popularity and are gaining importance in the market.

If you are a business owner, and curious about how a joint venture works, here is a quick guide that will help you out:

What is a Joint Venture?

A joint venture is a business arrangement, such as a new project or other business activity, that involves two or more parties pooling resources.

Each of the participating individuals or entities are jointly responsible for any profits, costs and losses associated with the venture.

However, the venture itself is considered its own entity and is separated from any of the participants’ business interests.

For example, Google Earth is a well-known venture between Google and NASA. If some sort of litigation was brought against Google Earth, for whatever reason, both Google and NASA’s interests would be protected.

The same goes for BMW and Toyota, who created a joint venture to research hydrogen fuel cells, vehicle electrification and lightweight materials.

When To Consider a Joint Venture

Even though joint ventures are technically “partnerships”, they can for any legal structure.

For example, corporations, partnerships and LLCs can all be used to form a joint venture and, although joint ventures are typically formed for production or research, they can also be created for a continued purpose.

Joint ventures can also be used to combine large and smaller companies in order to complete one big project or deal or several big or little ones.

Here are some reasons why you may want to consider forming a joint venture:

  • You can leverage resources. By combining the resources of both companies, you can leverage the strengths of both entities. For example, such as Google Earth, Google had the coding and programming technology while NASA had the satellites.
  • It will save you on costs. When you partner up with another business, you can split costs such as advertising and labor.
  • You can combine expertise. A joint venture can certainly benefit from the unique skills and expertise each party can bring to the table.

If you’re looking at developing a product or business that can benefit from having another party involved, it may be worth looking into a joint venture.

The Pros and Cons of a Joint Venture

As with any business venture, there are benefits and risks. Here are some pros and cons of forming a joint venture:

Pros of a Joint Venture:

  • Joint ventures are not a partnership. Therefore, separate business assets are protected from liability.
  • Joint ventures enable fast business growth by achieving maximum profitability through shared resources.
  • Joint ventures can be temporary. This means that individual parties can benefit from the agreement and then go their separate ways after achieving business goals and sharing profits.

Cons of a Joint Venture:

  • Joint ventures often involve different management styles. These differences may create friction and impact operations.
  • Joint ventures can end up like school projects. You may end up with one party who is unable (or unwilling) to contribute equally.
  • Joint ventures can fail if clear goals are not defined. With unclear goals, it’s difficult to assign responsibilities to all parties involved.

Are You Ready for a Joint Venture?

While joint ventures provide exciting business opportunities, no agreement should be stepped into lightly.

Our professionals accountants at Liu & Associates can help clarify the financial implications of a joint venture as well as help you determine whether incorporating this venture is in your best interest.

If you are considering forming a joint venture, please contact our experts for more information!

Writing a Business Plan: Do I Need an Accountant?

Are you starting a small business?

Have you thought about hiring an accountant?

Probably not, since you are likely focusing your time and energy on the growth of your business – but accountants are trained to do a lot more than payroll and taxes.

A professional accountant can help you develop your small business from writing a business plan to the official formation of your company.

While you don’t need to hire a full-time accountant to help you out, a couple of hours can make the difference in getting your small business off the ground.

Creating the Business Plan

An accountant will be able to help you write a business plan based on realistic information. You don’t want to risk a failed business plan based on optimistic assumptions and not current market conditions.

While optimism and risk tolerance can be beneficial to starting a business, an accountant can help you to balance the plan.

Experienced and expert accountants can use their knowledge to ensure your business plan is financially cohesive and realistic.

Forecasting Your Costs

When you create a business plan, you will be expected to forecast the various costs involved in starting and building your business. For first time business owners, this can be both daunting and confusing.

Accountants, however, can help you understand these costs by walking you through the numbers to create an accurate forecast for your business.

Determining Your Business Structure

When you start a small business, you can choose to incorporate it or run it as a sole proprietor. Both business structures have their own pros and cons, and are better suited to specific situations.

If you’re not sure about which way to go with your small business, an accountant can help you make the right choice by laying out the legal and tax advantages of incorporating your business – as well as the risks and pitfalls.

It’s a very important decision no small business owner would make lightly.

Registering Your Business

Do you know which programs you need to register with when starting a small business?

An accountant can help you out by making sure that your business is registered properly. For example, you may be required to register for GST/HST, payroll and your province’s WorkSafe entity.

Some business structures are not required to register for as many programs as others. Talk to an accountant about which programs are necessary for your small business.

Hiring an Accountant After Starting a Business

If you missed out on hiring an accountant to help you set up your small business, it’s not too late to benefit from their help!

In addition to the ways an accountant can help you get your small business off the ground, they can also help with many other aspects of your small business including:

  • Bookkeeping
  • Payroll
  • Taxes
  • Government Audits

So, even if your business is up and running, an accountant is a valuable asset when it comes to guiding and growing your business – as well as giving you back your time.

Ready to Get Started?

Our professional accountants at Liu & Associates are ready to help you get your small business started!

Contact us today to find out how we can help you write your business plan as well as guide you on the path to growing your small business into a huge success.

You can learn more about our business accounting services here.

Financial Considerations for Divorce 

Did you know that 41% of first marriages in Canada end in divorce?

While many couples divorce for a variety of legitimate and understandable reasons, the procedure is not simply a straightforward dismantling of a wedding certificate.

There are many financial considerations when filing for divorce, and the more prepared you are for that portion of the proceedings, the less you will have to worry about when the divorce is finalized.

Here are some financial aspects you should pay close attention to while proceeding with a divorce:

Marital Assets

When it comes to divorce, financial assets such as cash, bank accounts, stocks, mutual funds and savings bonds must be considered carefully.

Especially because not all assets created equal. It’s impossible to simply split everything down the middle.

Rushing into a settlement without careful consideration can be a financially and emotionally difficult situation to deal with after the divorce is finalized.

Real estate also needs to be addressed when filing for a divorce. This includes your marital house as well as other houses and properties, vacation properties, timeshares, rental properties and business properties.

Because a home is as much a financial investment as an emotional one, it can be difficult to negotiate how the property will be split, whether it is sold or one spouse buys out the other in order to keep the house.

Debt

Even if one spouse agrees to assume responsibility for debts such as mortgage, this does not mean the other spouse has no financial obligation to the joint debt.

Ultimately, both names on the debt, loan or mortgage are held accountable for paying it. Therefore, if the spouse that keeps the home defaults on mortgage payments, both parties suffer the resulting consequences.

A divorce decree cannot terminate financial obligations to creditors.

The only way to protect yourself if your spouse is assuming responsibility for a debt is to contact the lender and determine if he or she can refinance the loan under his or her name.

Otherwise, you have to place trust that he or she will keep up with the payments.

Bank Accounts

Most married couples establish a joint bank account in which all incomes are combined and all expenses are paid from it.

If your income is automatically deposited into a joint account, you will want to have it switched to a personal account in your name only.

Be sure to also take your name off the joint accounts to avoid liability if the account becomes overdrawn.

Although most divorces are amicable, should you suspect that your spouse is going to clear out the account, take your entitled half and put it in a separate account.

Taxes

There are a number of refundable and non-refundable tax credits that are based on the size of your “family net income”. When you’re married, this means the income of both spouses.

Therefore, when you divorce, your family net income is based on only one income. This means that you may become eligible for an increase in tax credits.

For this reason, it’s crucial that you update the CRA (Canada Revenue Agency) immediately after the divorce is finalized so that the recalculations can be done as soon as possible.

If you are separating in lieu of divorcing, you will have to live apart for at least 90 days before you notify the government.

Get the Help You Need

While you may be tempted to navigate the waters of divorce on your own, it is recommended that you seek guidance from a tax professional or accountant.

Our expert and experienced accountants at Liu & Associates can provide you with professional advice when it comes to sorting out your finances during a divorce.

If you are preparing for divorce proceedings, or simply have questions about your finances, don’t hesitate to contact us today!

How to Save Money When Your Income Temporarily Shrinks

Pandemics and recessions – at this point in time it seems our society has seen it all. And the financial impacts on businesses and families is undeniable.

While our world is currently suffering the detrimental effects of COVID-19, experiencing an economic downfall is not unique to this situation.

This pandemic has certainly been unprecedented but families and individuals should always be prepared for a decline in their income.

If you were not concerned about saving money before the downturn on our economy, you are certainly trying to find ways now.

Luckily, our accountants at Liu & Associates are focused on helping people avoid financial disaster.

Here, we’ve put together ways that you can save money even when your income has temporarily shrunk:

Create a Spending Plan

The first step in creating any sort of saving plan is to take control of how you spend your money.

A spending plan is different from a budget: it’s a tool to help you feel in control of your financial decisions. It will also help you find extra income that you can safely tuck away into a savings.

First, look at your reduced income – pay attention to what is coming in and what has to go out. Expenses such as these include rent/mortgage payments, bills and necessities like groceries and gas.

Next, focus on the things you are spending money on that are necessary. Do these things make your life better? If not, consider getting rid of them (such as monthly subscriptions) or stop buying them.

This may seem difficult at first but, remember, you are creating a habit and that takes time.

Start a Rainy Day Savings

A rainy day savings is money that you put aside “just in case”. This phrase likely originated from the days of agriculture when farmers had to set aside provisions for the rainy days in which they couldn’t work.

It seems like lately our society has hit many rainy days.

For this reason, it seems more important now than ever that you put aside some money in case you run into unforeseen difficulty, trouble or need.

This will help you avoid taking on more debt to handle unforeseen situations.

This form of savings should be your top priority. Ideally, you should have at least 6 months of expenses saved away.

However, for many people this can be impossible. Instead, focus on tucking away whatever free money you can find after creating your spending plan.

Long Term Savings

Even with a shrinking income, if you are able to continue to contribute to your longer term savings and investments, continue to do so.

You may not see the point since fluctuating interest rates are making these savings less rewarding than before, but think about these investments as a long term goal.

If you’re tempted to play around with your portfolio during this economic downswing, it is advisable that you speak with a financial expert.

Recessions Don’t Last Forever

Today’s financial atmosphere may seem hopeless, but history has proven that, despite economical hardship, society always comes out the other side.

One of the defining features of a recession is that they don’t last forever.

The future is always uncertain, as we can all contest to looking back only a few months ago. However, no matter the current global condition of the economy, you should always be prepared to weather the storm.

If you are worried or stressed about your current financial situation, our expert accountants at Liu & Associates are happy to help answer any of your questions.

Please don’t hesitate to contact us today.

Does Paying My Taxes Late Affect My Credit Score?

It’s no secret that paying your taxes late comes with consequences including interest and penalties that could negatively affect your finances.

But will these consequences affect your credit score?

It’s easy to assume that any money owing and debts will be held against your credit score. However, when it comes to late taxes, it works a little differently:

Does the CRA Report to Canada’s Credit Bureaus?

In general, the Canada Revenue Agency will not report to Canada’s Credit Bureaus if you owe a small amount in income taxes, paid your taxes late or received any basic penalties.

Because of the CRA’s privacy policy, they are restricted in the amount of information they are allowed to share with other organizations, including Canada’s Credit Bureaus.

However, there is an exception: If you owe so much in taxes that it results in a court case and a collection agency becomes involved. In this situation, the Canada Revenue Agency is able to put a tax lien on your credit report.

Overall, if your debts owing to the CRA become public information via a court case or collections case, your taxes owing will affect your credit score.

What Should I Do If I Owe Taxes?

An individual will usually end up late paying back owed taxes because they are not in a financial position to do so.

To avoid any late taxes affecting your credit, it is best to deal with it immediately before the debt becomes too large. Ignoring the problem will not make it go away.

In fact, ignoring owing taxes could result in ruined credit and even bankruptcy.

Even a small amount owing needs to be taken care of as soon as possible before interest charges inflate the original debt.

If you do owe taxes, here are some steps you can take to deal with the debt:

  • Contact the CRA immediately. The Canada Revenue Agency doesn’t want to drag you through court cases, so they are often willing to work out a payment plan. If you can prove that you absolutely do not have the means to pay your owing taxes in a short amount of time, you may be able to work out a multi-year payment plan.
  • The Taxpayer Relief Provision. If your tax situation meets certain criteria, your case may be forwarded to the Minister of National Revenue. Should your case be approved, you could receive tax penalty and interest relief.
  • Save and spend responsibly. You should consider establishing a savings account for tax purposes and other emergencies. Being able to pay a portion of your tax bill is better than not paying anything.

What Does Affect My Credit Score?

Knowing what actions affects your credit score is important in keeping your credit score high.

While your taxes only affect your credit if they become a substantial debt, many other elements come into play when determining your credit score:

  1. Payment History. The largest part of your credit score is based on how well you pay your bills and owing amounts on credit products. It takes into consideration late, short and missed payments – which can negatively affect your credit score.
  2. Utilization. Credit bureaus look at how much debt you have versus how much available credit you have. If you continually run your credit cards to their limits, this will lower your credit score.
  3. Credit History. How long you’ve possessed your credit products also impacts your credit score. Debts that you’ve carried, and maintain good payments on, for many years look better than newer debts.
  4. Credit Product Variety. The credit bureaus also like to see a variety of cresot products, not just credit cards. This includes loans, mortgages and lines of credit.

Why Take the Chance?

Any amount owing in late taxes, whether it be a large amount or small one, can spell trouble for your finances.

Contact Liu & Associates today for more information on how you can avoid interest and penalties when you owe money on your taxes.

COVID-19 Canadian Tax Information

With the recent changes due to COVID-19, many clients and small businesses are feeling financial pressure.  Please know we are deemed an essential service and will continue to serve you.  If you are affected financially by this pandemic, Liu & Associates is here to help.

To help ease financial burdens of taxpayers and small businesses, the Government of Canada is providing options to defer tax payments and is extending the tax deadline.  Read more about financial help for Canadians affected by COVID-19; a hub of benefits the federal government, provinces and territories are offering to people financially affected by the coronavirus.  For more information on how this can help you, your business and your employees, please see our resource section below or call us at 780-429-1047.

You can also visit Government of Canada’s coronavirus disease or call their information line (1-833-784-4397),  available from 7:00 a.m. to midnight (EST) seven days a week.

Our team will continue to update this page as more information becomes available.

Last updated: December 15, 2020.

Our Response Plan

The team at Liu and Associates LLP wants to assure you we are closely monitoring the COVID-19 situation from a financial standpoint and recognize it is truly a global crisis and is constantly changing. This is an unprecedented time for all of us, and we feel the need for everyone to work together to weather this storm.

To ensure the health and safety of our clients and staff, we are taking extra precautions in our office – read our blog post about how our office protocol has changed.

External Resources

GOVERNMENT COVID ASSISTANCE

With the new restrictions, there have been some new announcements for COVID Assistance programs by both the Federal and Provincial government.

There are two surveys available to help identify what benefits you may be eligible for:

You also may find it beneficial to visit Canada.ca. Right under the banner you will find a link called Covid-19 Financial Assistance. Here you will find the support for individuals as well as businesses.

Lastly, the Government of Alberta has recently put out useful information regarding Albertas relaunch grant for small and medium sized businesses.

For more support services, please see the external links below.

City of Edmonton

  • The City of Edmonton has launched a new website for business support in response to the COVID-19 pandemic. This website will be updated regularly by the City.
  • If you have any business related questions, contact the City of Edmonton directly: businessinfo@edmonton.ca
  • In an effort to contain the spread of COVID-19, the City of Edmonton is taking immediate action following the direction of Alberta’s Chief Medical Officer of Health.

Surrounding Areas

For up-to-date information related to other surrounding communities, please follow the following links:

Alberta

Canada

The Government of Canada is rolling out constant updates that affect both individuals and businesses.

APPLICATIONS are now being accepted for Canada’s Emergency Response Benefit Program.

The Government of Canada has launched a COVID-19 APP; to download yours visit APPLE  OR  ANDROID

 

Prime Minister Justin Trudeau announced $350 million in emergency funds for community groups and national charities.
Individuals

 

Businesses

For more information, please contact Liu & Associates LLP.

From all of us at Liu & Associates LLP, please have a safe and healthy season.

The Benefits of Taking a QuickBooks Training Course

Your business may be small but, even if you don’t feel you need a CPA (Certified Public Accountant), you do need to keep accurate financial records.

This task can be overwhelming but it is vital to the success of your business.

Luckily, there is accounting software available to help small business owners manage their finances as well as many other aspects of business.

Liu & Associates understands the value of being able to take care of business matters. Because of this, they recommend and offer training for an amazing accounting program called QuickBooks.

What is QuickBooks?

QuickBooks is accounting software geared toward small and medium sized businesses.

Some features of the software include:

  • Track income and expenses
  • Capture and organize receipts
  • Track mileage
  • Manage bills and payments
  • Send invoices
  • Maximize tax deductions
  • Accept payments
  • Track sales and sales tax
  • Payroll
  • Track inventory
  • Run reports
  • Send estimates

QuickBooks is designed to support multiple users as well as connect with third party apps.

Why Do So Many Small Businesses Use QuickBooks?

QuickBooks provides a do-it-yourself solution for small business accounting.

The interface is user-friendly and customer-oriented. With a QuickBooks training course, anyone can master this program.

The software also helps small businesses easily manage their taxes, which ensure that taxes are filed properly along with all the necessary information.

QuickBook’s integrated tools help businesses to increase their efficiency and productivity. They also regularly update and improve the software in order to keep the program up-to-date.

Most importantly, QuickBooks offers automated backup services, meaning that all of  the business’s information is safe from data loss.

What Are the Benefits of Taking a QuickBooks Training Course?

1. The Program Can Be Overwhelming

Because QuickBooks incorporates so many wonderful and helpful features, it can take some time to figure it all out. Even with a user-friendly interface, it can be a challenge to easily navigate the software upon first use.

A QuickBooks training course will guide you through using these features and help you gain the confidence to do so in a professional setting.

2. You’ll Learn its Full Capabilities

Even if you are able to grasp how to use QuickBooks, there are some features you may not be aware of. A QuickBooks training course will help you take full advantage of the program’s full capabilities.

QuickBooks’ full array of features are designed to increase the effectiveness of a small business’s accounting department. Understanding how to use them all is valuable knowledge.

3. It’ll Show You How to Apply Your Bookkeeping Skills

You may have plenty of experience as a bookkeeper but it may be difficult to transfer your practical skills to the QuickBooks software.

A QuickBooks training course can teach you how to combine your know-how with the program’s many features.

4. You’ll Make Yourself a Competitive Job Candidate

QuickBooks is quickly becoming the leading accounting software for small businesses. Knowing how to fully use the program is a valuable skill to add to your resume.

Having experience and training with QuickBooks can open the door to jobs in a variety of organizations, including:

  • Small businesses
  • Not-for-profit organizations
  • Government agencies

Businesses appreciate efficiency and productivity, which you can offer with your knowledge of using QuickBooks.

Ready to Step Up Your Business’ Accounting Game?

Liu & Associates is happy to offer comprehensive QuickBooks training!

Whether you are looking to introduce your staff to accounting, or train a new employee, Liu & Associates can tailor a QuickBooks training program to suit your needs. We offer one-on-one or group training sessions.

We work with your schedule to accommodate your QuickBooks training.

Contact us today for more information!

New Guidance for COVID Programs

As we are striving to bring you up to date information as quickly as possible, we are now providing you with further guidance from the www.Canada.ca site for COVID programs and benefits in relation to the Canada Emergency Response Benefit (CERB).

For those individuals who have received non-eligible dividends from corporations in which they held shares as the means of remuneration, the Questions and Answers section of the CERB application has been updated to address the qualification of this type of income in the application for CERB. Please note that non-eligible dividends are indicated in box 10 of any T5’s you would have received. The update is as follows:

Are self-employed small business owners eligible for the CERB?

Yes provided they meet the eligibility criteria including that they stopped working due to COVID-19 and do not earn more than $1000 in a period of at least 14 consecutive days in the first benefit period and for the entire four-week benefit period of any subsequent claim.

Small Business owners can receive income from their business in different ways, including as salary, business income or dividends. In determining their eligibility for the Canada Emergency Response Benefit:

  • Owners who take a salary from their business should consider their pre-tax salary;
  • Owners who rely on business income should consider their net pre-tax income (gross income less expenses);
  • Owners who rely on dividend income should consider this as self-employment income provided it comes from non –eligible dividends (generally, those paid out of corporate income taxed at the small business rate).

Income Requirements

What counts towards the $1,000 in income I can earn?

The $1,000 includes employment and/or self-employment income. This includes among others: tips you may earn while working; non-eligible dividends; honoraria (e.g., nominal amounts paid to emergency service volunteers); and royalties (e.g., paid to artists).

However, royalty payments received from work that took place before the period for which a person applies for the Canada Emergency Response Benefit do not count as income during that specific benefit period.

Pensions, student loans and bursaries are not employment income and therefore, should not be included in the $1000.

Applications will be verified against tax records to confirm income.

What income types count towards the $5,000 in employment and/or self-employment income?

The $5,000 includes all employment and self-employment income. This includes among others: tips you have declared as income; non-eligible dividends; honoraria (e.g., nominal amounts paid to emergency service volunteers); and royalties (e.g., paid to artists). If you are not eligible for Employment Insurance, you may also include maternity and parental benefits you received from the Employment Insurance program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan.

Pensions, student loans and bursaries are not considered employment income and should not be included.

Does the minimum income of $5,000 have to be earned in Canada?

No.

The income does not have to be earned in Canada, but you need to reside in Canada.

If I am in receipt of dividends am I eligible for the CERB?

Yes as long as the dividends are non-eligible dividends (generally those paid out of corporate income taxed at the small business rate) and you meet the eligibility criteria.

Non-eligible dividends count towards the minimum $5000 in income required for eligibility. Non-eligible dividends also count toward the $1000 income threshold for a benefit period.

Do artists’ royalties count as employment or self-employment income with respect to the CERB?

Yes, in some cases. Artists’ royalties would be considered payments received as self-employment income if they were received as compensation for using or allowing the use of a copyright, patent, trademark, formula or secret process that is a result of their own work or invention. These royalties count towards the $5,000 income threshold, as well as towards the $1,000 that claimants can earn per month while receiving the Benefit. However, royalty payments received from work that took place before the period for which a person applies for the Canada Emergency Response Benefit do not count as income during that specific benefit period. Other royalties (i.e., from investment activities) do not count with respect to the Benefit.

To read this and more about the qualifications in order to make an application for CERB. Please go to: https://www.canada.ca/en/services/benefits/ei/cerb-application/questions.html .

 

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