Harding Financial Inc.

As a business owner, how do you pay yourself? Some business owners pay themselves a salary, while others compensate themselves with an owner’s draw. But before you can decide which method is best for you, you need to understand the basics. Here’s a high-level look at the difference between a salary and a draw:

✅ Draw: The business owner takes funds out of the business for personal use. Draws can happen at regular intervals, or when needed.

✅ Salary: The business owner determines a set wage or amount of money for themselves, and then cuts a paycheque for themselves every pay period.
Those are the nuts and bolts, but we’ll dig into even more details of salaries and draws in a later section.

Interested in a little help? Check us out at www.hardingassociatesinc.com.

🤔 Does your business have a cash reserve? Cash reserves are your business’s emergency fund. It’s money that you’ve intentionally set aside and is immediately accessible to you when things get tight. Generally, it’s a good idea to keep enough cash on hand to cover your business expenses for three to six months.

There are a number of ways of creating one including setting a monthly savings goal, treating your cash reserves as non-negotiable, and creating guidelines for tapping into your cash reserve.

Let us help you make a plan to manage your cash flow that can help you build your reserve.

📚 As we wrap up the first week back in the classroom, we thought it appropriate to share a little info on filing taxes and how old you need to be. Well, we hate to say it but whether you’re 9 or 90, age has no effect on your requirement to file a tax return 🤓

Students are not exempt from filing either. If your a 20-year-old entrepreneur who made over $3,500 (after expenses) running a small business last summer, you must file an income tax return even if you're still in school. All working children should file a tax return as soon as they start earning income.

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There has been a lot of coverage in the news lately about scams related to CRA, including text message scams containing personal information, cryptocurrency scam by phone, and GST/HST tax refund/credit scam. Here's a great resource with tips on what to do if you think you have been scammed: https://bit.ly/3K22Q3H

And, if you suspect that you may be the victim of a scam or fraud or have been tricked into giving personal or financial information, contact your local police service.

As the sun sets on the lazy days of summer, so too rings the bell on the start of a new school year. And with students heading out the door sporting backpacks full of binders, pencil cases, and notebooks, parents once again wave goodbye to a sizeable amount of money from their bank accounts.

Good planning is such an important part of financial success and that includes how you budget and save for the costs of going to school. Here are some best-in-class practices for making the grade with your money management not just in the Fall, but all year round:

💰 Have a school savings strategy. It’s never too early to start saving for your child’s education. All new parents can start a Registered Education Savings Plan (RESP), which is a tax-sheltered investment plan that provides access to government grants. If your child decides not to attend post-secondary school your contributions and gains are returned to you (minus any government grants received and the interest earned on them).

💰 Make a budget – and expect it to change. This is where tracking your spend can help you rise to the top of the class. Use what you’ve spent in previous years as a baseline to create a budget for the current year, adjusting for any new or increased costs you expect to come up. Year-over-year tracking gives you a good idea of how much you should be prepared to spend.

💰 Spread out your school purchases! Between school supplies, bussing, school fees, and clothes, the back-to-school list can get quite daunting – and pricey. That said, you can reduce the budget hit in the Fall by prioritizing what your child needs right now versus what can wait until later.

Do you have any tips to share? We're all ears....and we bet the parents out there are too!!

🥂 Have a wonderful Labour Day weekend 2024! Can you believe how quickly this summer passed us by?! 🌖🌗🌘🌑🌒🌓🌔

Are you a parent with a child in sport? You can claim the Children’s Sports and Arts Tax Credit to the tune of $500 per eligible child, to help offset the cost of registering your child in sports and arts programs.

Are you eligible? Expenses must be associated with registering a child (who is under 19 years of age at the end of the tax year) in an eligible sport or art program. Eligible programs include:

🎨 arts programs like literary arts, visual arts, performing arts, music, media, languages, customs or heritage
🌷programs that provide a substantial focus on wilderness and the natural environment
🤓 programs that assist with the development and use of intellectual skills, or includes structured interaction among children (where supervisors teach or assist children to develop interpersonal skills)
⚽️ sports and physical activity programs that contribute to cardio-respiratory endurance and to muscular strength, muscular endurance, flexibility or balance
summer camps offering arts, sports or physical activity programming

This tax credit supports the participation of children living with disabilities in sports and arts programs and recognizes that every child participates differently!!

Eligible expenses include registration or membership fees; rental of required facilities; uniforms and equipment. Accommodations, travel, food and beverages are not eligible expenses.

Ah finally! Your reward for all those 5 ams in the cold rink 😉

www.hardingassociatesinc.com

Even in our sweet little province of Nova Scotia, tips are still taxable 🥹! In NS, tips and gratuities are considered to be income and you must report all of it on your tax return.

How you report your tips and gratuities depends on whether you receive them directly, or through an arrangement with your employer. If you receive direct tips or gratuities (amount paid to you directly by the consumer) as part of the work you do, it is your responsibility to follow these three steps:

1️⃣ Track all your tips and gratuities received throughout the year and keep a copy of your tracking document.
2️⃣ Calculate the total amount of tips earned between January 1 and December 31 of the year for your tax return.
3️⃣ Report the total amount received on line 10400 of your income tax and benefit return.

Looking for some help? Let's connect! hardingassociatesinc.com

The 2023 filing deadline was June 15, 2024, but with June 15 falling on a Saturday, returns were considered filed on time if received by June 17. The CRA offers various resources to help you navigate your tax obligations. A few include:

✅ Liaison Officer service for confidential assistance to help you understand your business tax obligations
✅ Online tools for faster filing and refunds
✅ Flexible payment options, including payment arrangements and pre-authorized debit

Interested in more information about the resources to help self-employed folks? Check it out ▶ https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2024/are-you-self-employed-understand-tax-obligations.html

Do you provide psychotherapy and/or counselling therapy services? If so, you should know that as of June 20, 2024, certain psychotherapists and counselling therapists are no longer required to collect the GST/HST on their services.

If you provide psychotherapy or counselling therapy services, you may no longer need to charge the GST/HST if you:

⏳ are licensed with a provincial body responsible for the regulation of psychotherapy services (regulated only in Ontario) or counselling therapy services (regulated only in New Brunswick, Nova Scotia, and Prince Edward Island); or
⏳ operate in province with no regulatory body but have the equivalent qualifications required to meet the licensing requirements in a regulated province; and
⏳ provide services that are within the scope of practice of the profession in that regulated province.

Additional information can be found online, so make you sure check it out and understand if you fall within these exemptions!

This is a cool new tool from the Government of Canada, a free online learning/video series to get you up to speed on TAXES! Learn how to file your taxes, what benefits and credits are available to you, and so much more. The series also explain how the tax system works and why taxes matter.

Check it out 🎯 https://youtu.be/I9kBakN1npk?si=zxne9LDw8kL_YWI7

Learn about your taxes - Canada.ca Take this online course to help you learn about your personal income taxes, how to prepare to do your taxes and how to complete a basic tax return.

🇨🇦 Are you new to Canada? The good news is that CRA offers a bit of relief for newcomers. Furnishing your home, getting household supplies, and dressing for the weather can include sales tax, like the goods and services or harmonized sales tax (GST/HST), but individuals and families with lower incomes can get cash back.

If you’re eligible, you can apply as soon as you arrive to Canada ▶ https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/newcomers-canada-immigrants.html

While you’re there, make sure to check if you’re entitled to receive the quarterly CCR payment as well!!

🇨🇦🇺🇸 Happy 4th of July to our American friends! A common belief among many Canadians is that we pay more in income tax than our American neighbours. Even politicians in Parliament have used this argument to press for lower taxes. But is it true? The differences in income tax rates, taxable income amounts, the services provided, and costs beyond taxes make broad conclusions difficult. Therefore, people must assess their financial situations individually.

Whether you agree with our tax system or not, here are some key takeaways on the differences in our systems:
▶️ The IRS taxes the wealthiest Americans at 37% on their top dollars as of 2024. The top federal tax rate in Canada is 33%.
▶️ Wealthy Americans have access to many tax deductions that Canada's alternative minimum tax doesn't allow.
▶️ Some U.S. states levy no income tax, but all Canadian provinces and territories do so.
▶️ Canadians pay taxes for the healthcare services they receive under a publicly funded healthcare system.
▶️ U.S. citizens pay for healthcare with their own funds or through a healthcare plan that they purchase, although they also pay taxes toward the government program Medicare.

Summer is a fun time, but can also be expensive. Fear not, because there are simple ways you can learn how to budget and retrain your brain to save money:

1. Set limits in advance. Take a look at your cash flow and make intentional decisions about where you want to spend and where you may want to cut back.

2. Be smart about scheduling. You can save on your next trip by taking vacation during the last week of August. Data from Tripadvisor suggests you'll spend 23% less if you travel after the early summer rush!

3. Use cash, not credit. Leave your credit cards behind on day trips and outings when possible.

4. Track your spending. You can't change what you don't measure. Start a spreadsheet and log your expenses. This will make you more aware of your summer spending habits and highlight where there's room for improvement.

5. Shop sales. Summer is a great time to get deals on big purchases like appliances, personal electronics, outdoor furniture and mattresses.

6. Don't skimp on savings. No matter your stage of life, you need an emergency fund to handle unexpected expenses. Give yourself peace of mind by automating a bank withdrawal to your savings account each month.

7. Eliminate expenses. Audit your bank statements. Cancel subscriptions or memberships you're not using. Consider cutting the cord and going cable-free.

12. Be smart about childcare expenses. Get creative about paying for childcare on a budget. Coordinate with other parents to alternate weeks taking care of one another's children.

13. Ask for an energy audit! Save money on your utility bill by having a technician assess your home. They'll inspect for drafts, seal air leaks and provide recommendations to make your home more energy-efficient.

Making your money go further doesn't have to be a huge sacrifice. There are simple and creative ways to stretch each paycheck.

When you think of bookkeeping, you may think it’s all just numbers and spreadsheets. That’s not exactly the case. Bookkeeping is the meticulous art of recording all financial transactions a business makes. By doing so, you can set your business up for success and have an accurate view of how it’s performing.

Here's a great graphic from our friends at Quickbooks laying out the difference between bookkeeping and accounting.

5 Summer Money-Saving Tips from Your Favourite Nova Scotian CPAs!

Hello, Nova Scotia! 🦞 With the warm weather finally here, we know you're ready to enjoy all the summer fun our beautiful province has to offer. But summer fun doesn’t have to break the bank! Here are five expert tips to help you save money this season:

1. Embrace the Great Outdoors
Take advantage of Nova Scotia’s stunning parks and beaches. Hiking, picnicking, and beach days are budget-friendly ways to enjoy nature.

2. DIY Summer Treats
Skip the expensive ice cream shops and make your own popsicles and frozen treats at home. Get creative with fresh, local fruits!

3. Energy Efficiency
Keep your cooling costs down by using fans, closing blinds during peak sun hours, and investing in energy-efficient appliances.

4. Smart Travel Planning
If you’re planning a getaway, book flights and accommodations in advance, and look for last-minute deals. Consider staycations to explore our beautiful province without the hefty price tag.

5. Utilize Free Community Events
Nova Scotia offers a plethora of free summer events, from music festivals to farmers' markets. Stay tuned to local listings and social media for upcoming events.

Saving money doesn’t mean sacrificing fun. With a little planning, you can enjoy a fantastic Nova Scotian summer without the financial stress. Need more personalized financial advice? We're here to help!

Harding Financial is pleased to join people across the country in recognizing National Indigenous History Month in Canada, an opportunity to learn about the unique cultures, traditions and experiences of First Nations, Inuit and Métis. It's a time to honour the stories, achievements and resilience of Indigenous Peoples, who have lived on this land since time immemorial and whose presence continues to impact the evolving Canada.

Today we're celebrating excellence! Do you know Harding Financial has a PERFECT 5-STAR record on Google Reviews?! ⭐⭐⭐⭐⭐ Thank you to our incredible clients for your trust and support. Your feedback inspires us to keep delivering top-notch service every single day.

Here's what some of you have said:
🗣️ "Exceptional service with personalized attention!"
🗣️ "Professional, reliable, and always going the extra mile."
🗣️ "The best accounting firm in Nova Scotia—highly recommend!"

Our commitment to excellence drives us to:
✅ Provide tailored financial solutions
✅ Offer proactive tax planning and advice
✅ Ensure your peace of mind with meticulous attention to detail

Looking for an accounting firm that puts you first? Let's connect and see how we can help you and your business thrive!

www.hardingassociatesinc.com

It is a requirement for most Canadian based businesses with revenue over $30,000 to register, collect and remit HST to the Canada Revenue Agency on a periodic basis. Our team can assist with the HST filing requirements for your business and ensure they are remitted on time and to the appropriate government agency.

www.hardingassociatesinc.com

Everybody hopes for a big tax return. Solid bookkeeping is the best way to ensure that you get the most out of your return. Keeping track of every bit of money that came through your business during the year can open up opportunities for tax deductions and returns that you may not have considered.

In Canada, there are a wide variety of categories that can potentially be claimed as business expenses, including but not limited to:

✅ Insurance fees
✅ Property tax
✅ Meals and entertainment costs
✅ Accounting fees
✅ Travel
✅ Supplies

It can be difficult to remember all of these items offhand, but if you keep detailed books, at the end of the year you have a record of every item that you spent money on, and you can then check that record against the list of deductible business expenses from the Canada Revenue Agency, and know exactly what amounts you can and can’t claim.

Yes - that is a lot to do. We're here to help make this simple. Want to learn more about working with us? Check out our website at www.hardingassociatesinc.com.

Are you a small business owner? It's important to be prepared before we meet. For small business owners, this includes ensuring:

➡ all your bookkeeping entries are complete
➡ you've reconciled your bank statements
➡ you've reviewed your profit and loss and balance sheet for understanding and accuracy

If you are also generating employment or investment income, you should organize:

➡ any information slips (T4s, T3s, etc.) you have received
➡ receipts for any expenses that may be claimed as deductions
➡ any other relevant tax documents

This can be done by you or by us. If you plan on asking us to do the bookkeeping, communicate this with us and budget extra time.

Having all this information ready will save both of us time and you money, as tax preparation can get costly when we're also tasked with completing your bookkeeping, organizing documents and following up for missing information.

Rob Carrick from Carrick on Money (The Globe and Mail) provides a great answer in relation to a parent wanting to help their child buy a home. He covers what a reverse mortgage is and what to be weary of:

'If you have a home equity line of credit, you could tap that for cash to give to your child. You’d have to make minimum payments each month of the amount of interest owing and pay back the principal at some point. A reverse mortgage could also free up some money. The amount owing on the reverse mortgage would be repaid when you sell your home.

Two caveats on the reverse mortgage – interest is charged on the amount of your mortgage at rates that today range from 6.99 per cent to 8.15 per cent (the HELOC would be around 5.95 per cent). The ever-growing amount you’ll have to repay on the reverse mortgage will eat into your proceeds when you sell your home eventually. Reverse mortgages can be a good short-term borrowing tool, but long-term use can seriously erode your home equity."

When it comes to business, taxes are a way of life. You have to make regular payments to the Canada Revenue Agency (CRA), or your business will cease to exist. However, that does not mean you have to pay your taxes blindly. There are steps that you can take to minimize your company’s tax burden.

1. Set Up a Home Office. If you are like most small business owners, you probably do a fair bit of business from your home. Things like utilities, Internet charges, and stamps are often missed by business owners who run a home-based business or use a home office.

2. Retirement Contribution. Saving for the future is never a bad idea, but it could also be your best bet for paying less business tax. And, Canada’s Registered Retirement Savings Plan (RRSP) is often touted to be one of the best income tax deductions for small businesses.

3. Hire your Spouse. One of the most aggressive things you can do to pay less business tax in Canada is to hire your spouse or child. This way, his or her income still goes into your family account, and the first several thousand (up to the basic personal amount) is tax-free. Plus, the salary you pay your spouse can be a tax deduction for your business – as long as the amounts are reasonable and the work documented.

Do you have a small business and some tax questions? Contact us! We can help you develop strategies to pay less business tax.

This weekend, a little event called SailGP rolls into Halifax. We expect some of you may be taking part in the social activities and maybe even entertaining clients or customers. Will you be or should you be writing off some of those expenses?

Write-offs are one of the more helpful deductions for small businesses and entrepreneurs. The most common ones are vehicle costs, utilities, office supplies, and advertising/marketing. This said, HOW do you go about it. Contact us to discuss this in more detail and let's ensure you're covering your bases ➡️ www.hardingassociatesinc.com

Our founder and president Colin holds the Certified Management Accountant (CMA) designation. What does that mean for you?

The certified management accountant (CMA) certification, which is issued by the Institute of Management Accountants (IMA), builds on financial accounting proficiency by adding management skills that aid in making strategic business decisions based on financial data.

Oftentimes, the reports and analyses prepared by certified management accountants (CMAs) will go above and beyond those required by generally accepted accounting principles (GAAP). For example, in addition to a company’s required GAAP financial statements, CMAs may prepare additional management reports that provide specific insights useful to corporate decision-makers, such as performance metrics on specific company departments, products, or even employees.

In short, this all adds up to benefit our clients 💯

As our president Colin explained, "The differences of claiming rental income or active business income inside of a corporation is massive, make sure you're claiming the proper income to help save you a lot of tax dollars in the future."

So when it comes to cottage season, you should know that all income you receive from an accommodation sharing arrangement - like Airbnbs - is subject to income tax. However, the CRA may consider this income to be either rental income from a property or self-employment business income. The type of income affects how you report it on your tax return.

It is important to note that your Airbnb income is taxable whether you are renting out only part of your home for a few days in a year or consistently throughout the year. Rental days are the days when someone is paying fair market value for the home or a room. If you need help setting this up or understanding the rules, we can help you.

We all want our kids to be responsible and well-mannered. But how about being financially-savvy? Teach your children the value of a dollar by showing them how to grow their money. For adult children, 18 and older, contributing to a TFSA is a good idea. But younger kids need short-term goals, like saving for a new bicycle. The best way to teach, of course, is by example. Also, opening a registered education savings plan (RESP) for them is a good way to prep for their future.

No one becomes a billionaire overnight. Start early!

Our very own Colin Harding is participating in the Visionaries of the Year challenge with the Leukemia & Lymphoma Society of Canada. For one day only TODAY - Wednesday, May 22 - ALL donations will be doubled up to $25,000 during Match Day. This means for one day only your donation will have double the impact!

Team Harding is still working towards our fundraising goal, and we need your support to reach it! Below is our fundraising link to use on May 22, to DOUBLE your impact: https://secure.llscanada.org/site/TR?pg=personal&fr_id=1551&px=1102772

Together, we can make a difference and bring us closer to a future where blood cancers are a thing of the past.

Are you watching out for hidden fees? Hidden costs can cause irrevocable damage to your finances especially in an investment portfolio. You may not see it on your quarterly statements, but investment management costs steadily erode returns all the same. Mutual fund investors often unknowingly pay management expense ratios (MERs) between 2% and 3% every year. If your fees are 1% or lower, you’re doing okay but anything over 2% is causing so many problems. At 2%, fees will eat up a third of your income over a lifetime. That’s considerable!

Supercharge your savings by reinvesting RRSP tax refund 💪💰 If you contribute $5,000 to an RRSP each year and reinvest the $1,000 to $2,500 refund it generates (depending on your tax bracket), after a decade, your savings could be as much as 50% higher.

Are you following our social pages? We think you should...tips like these can be game-changers.