Helping You Manage Increasing Business Expenses
This year I am not raising rates for tax returns for small businesses. In fact, I brought them down a bit. After the effects of government legislation changes over the last year, I feel driven to help small businesses hurting from extra pinches introduced and want to play a big part in helping them through challenging times.
I am even conducting free confidential sessions as “In-House Business Finance Advisor for The Day” in Huntsville on February 27, in Bracebridge on February 28, and Bala on March 7. In these sessions I will help small businesses understand their costs and maximize their tax returns. With increases in costs, you’ll want to be sure to take advantage of every legitimate tax deduction to minimize your tax bill.
Know Thy Costs – The Minimum Wage Increase And More
We all know that the minimum wage in Ontario shot up from $11.40 to $14.00 on January 1, 2018 and will go to $15.00 in 2019. I recently watched a local business owner debate a Toronto restauranteur on social media. The restauranteur essentially declared that any business who couldn’t absorb the costs of the minimum wage hike didn’t deserve to be in business. After clever questioning against standard industry measures, the restauranteur came to realize that he was losing money even before the wage increase came into effect. He didn’t know his costs and didn’t realize he was running an unsustainable business.
Calculating the increased costs of labour of course includes calculating the raw wage increase. But don’t forget to factor in the effects of related costs such as CPP, EI, WSIB, vacation time, etc. Then there are the other costs introduced by Bill 148.
There’s So Much More To Bill 148
There are many other changes introduced in Bill 148 that aren’t being talked about as much. Seasonal businesses will want to review the Equal Pay for Equal Work section which insists seasonal or temporary workers be paid the same wage as full-time employees filling the same role. Rules around classifying a worker as an independent contractor versus an employee have also become more stringent.
Shift workers may be entitled to compensation for shifts cut short or cancellations of on-call shifts. Employees with more than five years are entitled to a third paid week of vacation. Changes to emergency leave now affect all businesses regardless of size, and there are changes to family medical leave and pregnancy and parental leave as well. Public holiday pay will be calculated differently too. These are just some of the changes in Bill 148 at a high level. The list goes on and on.
Federal Government Changes
The federal government last year proposed changes to the tax system related to corporations that could affect small business corporations, family trusts, and professional corporations among others. These changes are intended to impose significantly higher taxes on distributions to dividends in various situations and penalize those organizations that hold cash or investments in a business. While these proposals have not yet been made law, owners of corporations need to study them and make decisions on how best deal with the profit they have earned.
Does Government Respect Small Business?
Regardless of your political stance or feelings on these matters, business owners need to fully understand these changes and think through the increases in their costs. And there’s a lot to understand. Have a discussion with a business and tax advisor to fully understand the changes and how they specifically affect your business situation. Then we can determine how to deal with the effects by finding other costs to cut or better yet strategizing on ways of generating more income. And of course, let’s be sure to employ every legitimate tax deduction possible!
Attend A Free Session
Book your appointment for a one hour complimentary and confidential session during “In-House Business Finance Advisor For A Day” being held on:
- February 27th in Huntsville at The HUB (Muskoka Room)
- February 28th in the offices of Muskoka Futures
- March 7th at the Muskoka Lakes Chamber of Commerce office in Bala.
You may also be interested in these articles by David –
Business tax season; Let’s tackle it together
It’s easier than you think to go paperless for 2018
Proper tax planning requires professional advice relative to an individual’s specific situation. Information presented in this column is general in nature and does not supercede any advice provided by a professional. If you have questions about small business or corporate tax and finances, contact David Perlock of The Velocity Partners at 705.645.3459, email [email protected] Or visit www.davidperlock.com.
Founder of The Velocity Partners David Perlock has been consulting with clients for over 20 years. In that time he has worked with over 500 clients ranging from gas bars to airlines – independent contractors to home manufacturers – retail stores through wholesale distribution and manufacturers. David attended Wilfrid Laurier University for business administration and is also a graduate of the University of Windsor (Commerce) and the Canadian Tax Academy. He is currently the Treasurer for the Bracebridge Chamber of Commerce, is active on the Board of Directors of the Huntsville Chamber of Commerce, and is a member of the Stephenson Lions Club. David enjoys helping small businesses save money, defer tax, adopt technology and grow!
David W. Perlock, Principal Consultant & Small Business Tax Specialist, The Velocity Partners.
Direct – 705.645.3459
E-Mail – [email protected]