This is income tax month in Canada, the deadline for filing is April 30. I am affected by this deadline in three ways. First, there are the people for whom I prepare and file personal income tax returns, then there are my business clients for whom I have to get files ready for their tax accountant, and lastly, I have to do my own income tax return.
And yes, that will come last — the shoemaker’s children go barefoot, and all that. I am too busy with other people’s book work to prepare my own tax return.
It would be a lot simpler if people running a business could establish a completely watertight seal between their business bank and credit card accounts and their personal accounts. Very few small business people are able to achieve this. They start out with the best of intentions, but a personal bill comes up and there is money in the business account. Or they go to a supplier and use their personal credit card. Money leaks out in various ways and the bookkeeper is left to figure out where the money came from and where it went. I do my best, but the client doesn’t get the monthly financial statement he wants (and needs) until I can trace some of those leaks.
Enough complaining. Perhaps I need to start an education program. That’s high on the list for inclusion on my business web site, once I get it going (after I’ve recovered from tax season).
The tax system is complex, but then so are people’s situations. Most people are healthy and may not grasp what is involved when one or more members of a family suffer from a disability, or the results of a debilitating accident, and needs constant care, but the tax system has provisions for such situations in the form of disability credits and caregiver credits.
A new provision this year is called the family tax cut. It is most beneficial to couples where one partner works and the other stays home to care for the children. The family tax cut allows them to split their income in order to calculate the lowest amount of tax. This calculation is made in the background and only the one working pays tax. It would be difficult to work out the optimum income split with pencil and paper, but tax software does it in an instant.
Not everybody believes that it is more blessed to give than to receive, but the generosity of many people is heartwarming. The extremes that I have seen in charitable giving over the years range from the young couple with a combined income of $100.000.00 who gave $200.00 in charitable donations, to the elderly couple with a combined pension income of $26,000.00 who gave $4,500.00. Bless their hearts.