As the start of the new year approaches, many of us are thinking about things we want to do differently. Of course the start of a new year is essentially a social construct. January 1st was chosen by Julius Caesar in 46 B.C. to honour the god Janus (after which January is named) and as part of his efforts to align the calendar with the seasons. The Julian calendar forms the basis for our modern Gregorian calendar (which mostly just corrects for leap year which had not been taken into account). Other cultures celebrate the New Year at various times during the year and are often not a fixed date but depend on lunar cycles and may be celebrated over a number of days.

It is hard to believe that we are approaching the end of this year(I was just getting used to writing 2022). It is the time of year (between holiday preparations, Christmas shopping and trying not to overeat) that we tend to take stock of where we are, what we have done over the past year and what we want to do in the new year.

Many of us (often in spite of ourselves) are at least somewhat interested (and often excited) about Black Friday and Cyber Monday without, perhaps, even knowing why. I thought it would be interesting to (superficially) explore the psychology behind this phenomenon.

When you are in the earlier stages of being in business, you tend to be significantly less discerning with who you take on as a client (you have a business to build and you need to pay bills). Also, as an optimistic newbie, you don’t necessarily have the experience to identify clients who are going to be problematic.

In recent news, businesses will now be able to impose a surcharge to customers who pay by credit card. In the past, Visa and Mastercard specifically prohibited businesses from doing this (this was a standard clause in their agreements) If you were found in violation , your ability to accept credit cards could be revoked. This condition has now, however, been overturned as a result of a class action lawsuit that was filed in Canada (It is interesting to note that the prohibition still remains in place in Quebec).

The Quebec provincial election is quickly approaching and will take place on October 3rd. While it looks like the incumbent CAQ is going to win, by an even larger majority than the previous election, there is a possibility that the polls aren’t entirely accurate.

One of the most important questions for new and existing businesses is determining how they are going to get paid. Years ago, your options were basically cash, cheques or wire transfers (and perhaps the odd letter of credit for those in the import/export business). This, while being simple, limited your sales to customers as cheques require trust (will it clear the bank? Will the seller actually deliver the product after cashing the cheque?). Also, it is more administratively burdensome as you have to go the bank to deposit them and then wait for them to clear.

As most of you might know, the Canadian and global economy is experiencing some significant challenges.

The most significant impact for us, as individuals, can be seen in the guise of inflation. We have all noted the increase in prices of groceries and gas (I know for me it has started to become a common topic of discussion with friends and family as we bemoan the price of vegetables or contemplate the alternatives to driving our cars).

I’m generally not a huge fan of aphorisms (happy wife, happy life is one that irrationally annoys me). Recently, however, a colleague advised me to “fake it until I make it” in response to my own doubts about a situation and it resonated with me.

According to Statistics Canada, in 2019, 54% of all businesses had between 1 and 4 employees. It is likely (70% according to some sources) that the majority of these represent businesses with a single founder/employee/shareholder.

We know that every small business needs a marketing strategy. Whether you provide services (like myself) or products or a combination of both, the most important thing you need to know is how you are going to bring in customers.

The current financial environment seems a bit bleak right now. The pandemic, war in Ukraine, housing issues and other factors have led to supply chain disruptions, labour shortages, a plummeting stock market, and inflation. Almost everybody has been directly impacted with one of the most significant consequence being an increase in our expenses and a corresponding decrease in our net worth.

I will admit some bias in my title this week. I am currently in the middle of vacation (having written this newsletter in advance) and am hopefully enjoying it without work distractions! Admittedly, as a small business owner, it is difficult to completely detach from work. The line between work and our personal lives is much blurrier and our responsibilities are often weightier. If we don’t respond to a customer or a supplier or a bank on a timely basis, the very existence of our businesses could be at stake or at least the consequences could be significant. Some of us might be able to delegate, but it is often challenging to relinquish control.

According to Revenue Canada, approximately 18 million tax returns have been filed as of April 25th. This is great, but it also means that approximately 12 million Canadians have not yet filed their tax returns, when compared with total returns received for 2021. It is perhaps not a huge surprise that many of us leave the tedious task of tax filing to the very last minute (including myself :)). Of course, if you haven’t filed, now is the time to get it done! Below are my annual tips for tardy tax filers:

Given the macro environment where spending by the government has been at an unprecedented high along with significant inflation that affects all of us, the budget didn’t have much in the way of tax breaks for individuals and small business owners. There were, however, some financial measures that will have an impact, many of which relate to making housing more accessible and affordable to the average Canadian. Some of the more relevant measures include the following:

Hope everyone’s has gotten through this April Fool’s day with a healthy dose of humour, but otherwise relatively unscathed :)

Sadly, I do not have any April Fool’s pranks for you (humour is in short supply for many accountants during tax season). Instead, I bring you information on the deadly serious topic of taxes.

Whether you are an employee or a small business owner, you can claim home office expenses as long as you worked from home, although the rules are a bit different.

By now most of you have received a variety of tax documents. Some are straightforward while others may seem a bit cryptic. There are also some taxable events that do not actually result in a tax document, but require the filing of forms anyway. And if you are an unincorporated small business owner or have rental property, almost all of the burden of preparing your tax reporting is on you.

As we get closer to the tax deadline, I thought it would be a good idea to talk about some tax concepts, over the next few newsletters,and address some of the more frequent questions that I get. The most fundamental of these concepts, and one that is largely misunderstood, relates to how income is taxed in Canada.