Expected $15,000 Tax Return from Government
March 10, 2009 Posted by Tyler CruzYesterday I went to my accountant’s firm where I go to give them all my year-end stuff. I was given a new accountant this year, and was a bit apprehensive as accountants can range greatly in skill, experience, and personality. I was also weary and hoping for somebody fairly young, since 100% of my income comes from online and it’s just easier working with somebody who is familiar with PayPal, etc.
Fortunately, my new accountant from EWM accountants & business advisors is awesome. I’m a pretty bad guesser at ages, but I’d say he was around 33-35ish. He was very friendly and seemed very knowledgeable and experienced which gave me a lot of confidence. Right off the bat he starting explaining things to me very well and gave me a bunch of tips on how to save a lot of money for 2009.
He was very easy to get along with and he didn’t pull his hair out when I started showing him all of my paperwork and how unstructured it was. I like how he was patient with me and answered all of my questions in detail until I fully understood what he was talking about. Oftentimes, accountants have a way of talking way over your head. Fortunately, he was both professional and knowledgeable yet “real” at the same time – just the way I like it.
Since this is the first year we’re doing my corporate taxes, we had to pick out a fiscal year for it. We (he… haha) decided that running it from March 1st – February 28th made the most sense. Since I had prepared my corporate taxes for the calendar year of 2008, it means that I have to go through everything again to prepare the data from the first couple months of 2009 since that is now part of the fiscal year for the corporation. This will be a bit of a pain, but it made the most financial sense.
One of the many questions I asked my new accountant was how much I would be expected to receive back from the government for my 2008 personal taxes. You see, I have to pay my personal taxes quarterly in advance, and they estimate how much you’ll have to pay by basing it on your previous year’s return. Since I owed $22,000 in 2007, they wanted $5,500 every 3-months from me – which I paid.
However, since I incorporated partway through the year, it means that my personal income for 2008 was actually dramatically lower than what the government had estimated it would be (basing it off of 2007). Because of this, a quick number crunch estimated that I should get a $15,000 return from the government once I file my personal taxes. Yay!
That’s essentially like getting a brand new 2009 Toyota Corolla from the government for free!
Well…. not exactly. First, that is MY money. They simply overcharged me by making me pay in advance. In fact, I actually lose out if you think of it since I lose out on the interest I could have made if I didn’t pay that money to them in advance. Although, I think that when I get the return, I might get paid with the interest the government made on it as well 🙂
While I should be getting roughly $15,000 back from the government for my personal taxes, it doesn’t mean that I won’t have to pay anything. My corporation will still need to pay its income taxes. I’ll essentially be taking that $15,000 and using it as a shareholder loan (since I’m the sole shareholder of the company) to pay off its taxes which should pretty much cover it since 2008’s corporate tax rate is 15.5%, although that doesn’t include the double CPP contributions (Canadian Pension Plan) which is another 5%.
In the end, with the money I’ll be getting back from the government for my 2008 personal taxes, I should roughly break even, meaning that I won’t really have to pay anything “extra” out of my bank accounts.
And since I was prepared to pay $25K+, that makes me one happy boy.
I’ll keep you guys posted once the official returns are completed by my accountant and I know exactly how much I have to pay/get back. If you’re looking for an experienced accountant, check out the best online accountants UK.
GEEZE. I wish that I could get a nice return like that from the gov.
Lucky you are 😉
That’s a pretty nice return. Yea it sucks how the Government uses that money for their own use but doesn’t pay us interest for it!
Boo to taxes!
I have no idea if I’ll see anything back this year. I do know I need to find myself an accountant to help figure out as a telecommuter what parts of my rent/internet etc I can use as a write off since I work from home 3 days a week.
I always laugh when people say things like ‘Wow I’m getting $1500 in my return! That’s awesome. Then i tell them about how it was their money to begin with and the Government has been using it without paying them interest on it and then that dampens their spirits a bit! I haven’t gotten a large tax return in a while. A few years ago I owed $2000. Next time I work two jobs, the 2nd one will always be set to tax me in the FULL amount so that I will get money back and not end up owing more.
The government actually DOES pay you interest on any money they owe you.
And then, they tell you that you must include that interest earned on your next year’s tax return so that they can tax you on it!
They did that to me, I thought it was pretty fricken funny…They tax you on interest you earn from them on the money they overcharged you for in the first place.
Tax time. Some people hate and other people love it. Depends on what happens. 🙂
Hmmm, hopefully I can find an accountant as understanding as yours. The whole world of finances (and anything math related really) confuses the hell out of me. I’m not sure what it is, but when it comes to numbers my brain just shuts down.
That is one nice chunk of change you are getting back from the government. Keep up the great work. Greg Ellison
Congrats on the great return! Its not fun paying it but it sure is nice when you get it back! It sounds like you will save alot of money this year compared to last year?
Nice man! That’s a very good tax return. Although, you did pay $5,500 every 3 months. Hopefully you get more back 😉
Hi,
Very nice article. You mentioned everything to make the points clear. bets of luck,
Its tax time 🙁
That’s horrible- you had to pay taxes in advance?! I guess there’s not much you can do about it, but that still seems unfair. Looks like you have to give the keys to your new car back before you even get it. You should take the $25k you’re saving and get an even nicer car!
That’s a pretty impressive return. Did you invest in any RRSPs?
I put around $230 a month into RRSP’s.
Glad to hear about the update on the taxes Tyler. And I am really looking forward to hearing the future updates, and I think others are too.
I was looking over at the top commentators list, and it seems that someone has “hijacked” my name using a completely different website. It appears that some of the other names have been affected too. By me leaving a comment now, it will fix it, but it’s quite sad.
I won’t say their full url address as but its hotelxmusic dot com
It also looks like game-girl’s been hijacked too, quite sad really.
Congrats Tyler . Its good you are not looking to splurg the amount. Getting a 2009 Toyota Corolla will totally rock as well 😀 , it will be a refreshing change from your old Corolla.
I’m not buying a new car, it was just an example of what I COULD buy with my return 🙂
My current Corolla isn’t too old… 2004. I don’t plan on upgrading for another few years at least. It only has about 35,000 KM on it….
Use the 15 grand as a down payment on a new home. It’s a buyers market right now.
🙂
Wokay 😀 Seems good to me
The car looks mint ;D I want one….:P
Right on! Congrats on breaking even. I am a bit scared about what my accountant is going to tell me. We’ll see I guess!
Man, this is some great news! Even though you’re just breaking even, it’s always a nice surprise when you anticipated paying a lot more. That should help you sleep easy at night 🙂
$15k? damn. I don’t know what I would do if I got $15k back from taxes. I’d probably buy some real nice stuff though (or go for a car =D).
Wow that would be a great return, too bad you don’t get to keep it all.
Come on Tyler, use your affiliate money to buy yourself an H2 in this recession 🙂 Beat Shoemoney!
-Mike
Tax time. Some people hate and other people love it.
Why you say that?
I don’t understand!
Nice return! Wish you all the best! Good article too!
Having a younger accountant is key. I’ve switched accountants the last few years since I feel that the ones I scheduled appointments with and had do my taxes weren’t “keeping up with the times”.
Nowadays I’m looking for a few things in an accountant: CPA credentials, responds to emails, younger than 40 years old.
Definitely. Yeah, my new guy is definitely fine with receiving stuff by e-mail. Saves me driving down to drop stuff off… although I usually do anyway since it ends up being faster.
But it’s certainly nice to have somebody who can work at your level.
Sounds great man.Nice to hear everything workd out
Why would you make a post about getting a $15K government refund when you just have to pay it back on the business side. I can’t imagine someone writing about anything MORE retarded.
Fantastic Congrats for the new car.
But why did u get refund of £15000 it’s really good you have got that.
Good to see a new car. Congratulations buddy !! yup that’s really true government never uses the tax in the real betterment of community hoping your tax goes into safe hands and in return we ‘ll be having some benefits. Informative post hope to see more.
I just did my tax returns and I’ll just be getting 100$ back :(. Looks like you’ve got me beat!
Mine was a lot of work because I worked in two different states throughout the year so reporting income was a pain.
[…] you remember, a couple weeks ago I posted how I Expected a $15,000 Tax Return from the Government. I have my completed return in front of me, and it ended up being even higher than we had quickly […]
Nice dude, enjoy the scratch. 🙂
[…] you remember, a couple weeks ago I posted how I Expected a $15,000 Tax Return from the Government. I have my completed return in front of me, and it ended up being even higher than we had quickly […]
Wow, SO you really did end up on top and better prepared for the next fiscal year. It is hard to find an accountant that you mesh with well. I have been through three already.
Congratulations buddy !! that’s true government don’t use the tax in the real betterment of community
Government always try to get the tax in various forms from the people.
Some people get money back with tricky methods.
thanks for sharing good article.
Hi,
Very nice article. You mentioned everything to make the points clear. bets of luck.
Congratulations buddy !! that’s true government don’t use the tax in the real betterment of country.
thanks for nice article