If you’re already working in the accounting industry, you’ll know it to be true: accountants do so much more than crunch numbers! It’s not a surprise that professional accounting exams cover a variety of topics!
Accounting professionals are a lot like lighthouses: they’re an incredibly important guiding force for people who need them – and lots of people do need accountants, from individual clients preparing for an audit all the way up to big corporations.
Skilled accountants can even change lives by finding their clients big savings and new efficiencies.
Since accountants are such a valuable resource, we decided to compile five of the most common questions that accountants get asked by their clients. They may give you a sense of how truly important (and complicated) accountants’ work can be!
How do I save on my taxes?
Taxes are controversial. Like them or hate them, either way, everyone has to pay them!
Given the high profile they have in our society, it won’t be surprising that one of the most common questions that accountants get from their clients is how they can reduce the amount of tax obligations that is necessary to pay the government.
Accountants can answer this question, and offer clarity on how to maximize new tax incentives and run your finances in the most efficient way.
In other words, an accountant can save a client money come tax season!
Hiring an accountant can be a great way of partnering with a tax expert who knows the ins and outs of the various ways that business or personal tax obligations can be minimized, while still following the rules.
What entity should I choose for my business?
No one needs an accountant more than a new business! A young company could grow into an incredible enterprise – but only if the right paperwork is filed along the way.
There are a lot of important questions business owners can ask accountants. One of the most common (and most important) is what entity a business should operate under.
The most common entities are sole proprietorship, partnership, and corporation.
An accountant can identify which business structure offers the greatest legal advantages and tax protections, and which is likely to give a new business an edge.
The last thing that new entrepreneurs want to do is to structure their new business in a non-advantageous way, which can be costly down the line.
How can I take advantage of gifting rules?
If you’re one of those lucky folks looking to give money away, you should know that financial gifts are governed by strict rules!
For starters, there is no “gift tax” in Canada. This means that a resident of Canada who receives a gift or inheritance of any amount, except from an employer, or as a tip or gratuity due to their employment, will not have to include this in their income.
However, there are many scenarios that complicate this process, which a seasoned accountant can guide you through.
Here is a basic rundown of some of the gifting rules, just follow this link.
What is the tax effect of this transaction?
Surprise, surprise, we’re back to taxes. They really are that important! This common question deals with taxable assets.
Having an accountant is a major benefit for when considering selling or buying assets.
For example, an accountant can help setting up a stock portfolio the most efficient way.
If a home or business property is being sold, an accountant can advise the tax implications including capital gains and guide a client through the ways tax obligations can be minimized.
In other words: accountant = less tax + better management of assets!
How do self-employment taxes work?
The truth is that more and more Canadians are becoming self-employed.
This change in the labour market means that people are often working freelance and are being classified as independent contractors. There are big benefits to participating in the gig economy, but if you’re a freelancer, you should know that this group does have to file their own tax returns.
The good news is that self-employed individuals are privy to certain subsidies and programs. An accountant can help people access these benefits, while also giving clients an understanding of what can be deducted as a business expense from your tax obligation to reduce the amount payable!
An accountant can assist with filing a return with the government and make sure that late penalties are avoided.
