The Murkiness of Misinformation
Hello All,
It is easy to get sucked into the vortex of social media. It can be a fun distraction and depending on your interests, educational and inspiring. It is also a megaphone where often the most opiniated people hold the most weight. Someone with thousands of followers who confidently asserts a fact, is taken at their word. Unfortunately, thought, some of this information is erroneous or has been manipulated to support an argument and anyone trying to correct errors or present a counter argument is shut down or simply deleted.
This is not a rant about social media (which I certainly use as much as anyone else). It is, however, an observation on the amount of misinformation that we are exposed to. My interest, for the purposes of this newsletter, is in how it relates to finance and tax and how to ensure that we are not being manipulated into believing facts that are simply not true.
So what can you do to ensure that you are not being misinformed? First of all, it is important to use critical thinking. If someone tells you about a “tax loophole” that they just discovered and no one else is using, it should raise alarm bells. There are numerous accountants and tax specialists whose job it is to see the implications of tax law and they almost certainly know better. Much of this advice is offered without context and is over sensationalized or simply disingenuous and provided with the aim of getting more likes and followers.
Second, it is useful to go straight to the source. Revenue Canada (and Quebec) have fairly easy to follow information on their websites relating to many aspects of tax and finance. Of course, they don’t always address your exact situation, in which case you can do an internet search. It can also be useful to build a list of trusted websites, however, I still recommend cross checking among several sources to verify for accuracy.
Finally, it you are not satisfied with the answers or if your situation is so specific that the answers do not exactly address it, I recommend speaking to an accountant or tax specialist. While there is a cost associated with this, it can save you the penalties and loss of sleep from doing things incorrectly. Note that even with a professional, you should be alert to someone who is overly opinionated and who claims to know better without providing an adequate explanation. And don’t be afraid to ask for sources to support their answers.
It should be acknowledged that there is certainly some ambiguity about facts. Context is often crucial and there is a reason that specialists get paid significant amounts of money to find the best possible interpretation for their clients. But, just because X person posted something and has a million followers (which are often acquired by being controversial rather than for accuracy) or just because a book has hundreds of positive reviews (see my last newsletter rant), it is always a good idea to delve a little more deeply into it and determine for yourself if it makes sense.
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From the Blog
Many of you are starting to prepare your taxes and one of the most common questions that everyone wants to know is what business expenses can you claim. Not much has changed in this regard so I have included my newsletter on the subject from last year, which includes link to a couple of blog posts:
A Primer On Business Expenses
The question that almost every small business owner wants to know, especially at this time of year , is what expenses can I deduct to lower how much I owe in tax. This newsletter is not going to revea
Business/Finance Stuff:
The consumer price index for February was lower than expected: The February inflation rate came in at 2.8% vs the expected rate of 3.1%. This is potentially positive for anyone hoping for an interest rate cut in the near future (particularly those with mortgages that are variable or coming due or loans tied to the prime rate).
AI Tools for Small Business: If you’re like me, you are fascinated by the plethora of AI tools available for small business. Of course most of them are not free, so deciding which ones to pay for requires a cost benefit analysis. This video explores some of those tools and, if nothing else, gives you ideas about what can be automated.
Tax Stuff:
Tax tips for the self employed: I am interviewed in this article from the Globe and Mail where I provide some tax tips that include ensuring that you estimate and save for taxes and scanning your receipts.
Bare Trust Reporting: Some of you may have heard about this new and onerous tax rule which applies to anyone who holds property where the person on the legal documents is different from the person who enjoys the benefits of the property. If this applies to you (and numerous people are caught in this net), you are required to file a trust tax return the deadline for which is April 2nd, 2024 (for year ended December 31, 2023). This article explains it in greater detail.
Quebec Budget : The 2024-25 Quebec budget did not announce any changes to personal or corporate taxes. Highlights include changes to business tax credits for e-commerce, phase out of the electric vehicle tax rebate and cancellation of tax credit for employing seniors.
Possible Tax Changes in Upcoming Federal Budget: The federal budget will be released on April 16th. This article discuss some potential changes including a proposal to increase the percentage that you can contribute to your retirements savings
QuickBooks Tutorials:
For those of you that are reviewing your year and discovering that you have amounts from customers that are not likely to be paid, this video explores how to write off bad debts in QBO:
How to Write off Bad Debts in QuickBooks Online
A variety of other tutorials can be found at my channel here
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Also, if you have any questions about QuickBooks/Xero/Excel or finance in general for which you would like to see a video, please either leave them in the comments section of any of the videos (I see them all) OR email me directly at ronika@montrealfinancial.ca
Free Tools and Resources
Small Business Books
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A Comprehensive Guide to Working with QuickBooks Online
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A Straightforward Tax Guide For Canadian Small Business Owners
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Everything Canadian Business Owners Need to Know about Dividends and How to Pay Themselves
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Everything You Need to Know About Starting Your Sole Proprietorship
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Consultation Services
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Note that I no longer provide ongoing accounting or tax preparation services.
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I would love to hear your comments on my current blog posts, topic ideas for new blogs, book feedback or anything else that you want to talk to me about. You can use my feedback form or email me directly at ronika@montrealfinancial.ca.
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Wishing everyone an enjoyable, first official spring of 2024, weekend!
Ronika
