Wednesday, February 21

The taxman cometh

Every year around this time I start to allow my corporate bank accounts to grow and I become reluctant to withdraw the money to invest. The reason during this season? I have an expectation that fairly soon I will have to write one or more large cheques to RevCan after my taxes are done.

Is this logical? A little bit but not entirely. This year I have nearly $60,000 sitting in my savings and chequing accounts (combined). Now, realistically, there is simply no way that I made so much money last year AND underpaid with my installments so much that I need a $60,000 tax cushion. I might need to top up my taxes somewhat, but I wrote installment cheques all the way to February, so I should be in even better shape this year than last year when I stopped at November (I don't usually see my accountant until February or March).

Of course, things could be even better if I had some way of keeping track of things to know approximately how much tax I will have to pay. Ideally I shouldn't be keeping such a large cushion in low or no-interest accounts. If I were to run things more like a "real" business I'm sure that putting money to work would be a number one priority. Hoewever, I don't have an accountant to look after things for me, so I need to balance my perfect strategy with practicality in terms of time requirements. I will add this to my list of questions for my accountant in hopes that I can start to run with a lower bank balance and invest my money more profitably.

Today's billable hours: 5.5 + 5.0 (flat rate project)
Today's contracted hours: 0.5