Fire your Accountant & Hire a Partner

True story! My accountant saved me big money. Does Yours?

Posted on 11 November 2010

OK, so here’s my story. You have to read the whole thing to find out how my accountant saved me money.

That's me with the cool hat standing beside my ride! : )

I was recently in a car accident. Yes, it’s true that I can make mistakes, but don’t tell anyone else. It’s just between you an me…..shhhh…..

The good news is – no one was hurt.  The bad news is my little fender bender was going to cost $10,000 to fix! AAAAAAAHHHHHHHHGGGGGGGG. $10,000 – that’s crazy! We both drove away and the airbags didn’t even go off.  Thank God I have insurance.  Just when I think I am off the hook for the 10 grand and only have to pay my $300 deductible, they get me……oooof…… just like a punch in the stomach.

I have to pay the taxes on the repairs. Because I am self employed, I get a refund for the taxes I pay against the taxes I collect for the government in the form of a “transaction tax”.  A very ingenious scheme by the government to make business responsible for collecting taxes.  Brilliant! Seriously brilliant!

You might not think that just paying the tax on the transaction is much, but in my fair province, we have HST. That means 12% on every transaction.  Wow, my bill was no longer $300 but instead it was $1,400. A far cry from $10,000, but ouch,  it hurts.  Don’t tell me that any of you like paying a $1,400 bill because I know you’d be lying.

So now for the good part.  I called my accountant and my good buddy Vince. I cried a river of tears on how hard it was to pay this horrendous bill.  Vince, being the true friend, was very sympathetic to my plight. But Vince, the accountant, had a different response. He told me that I could not reclaim 100% of the “transaction tax” because I don’t use my vehicle 100% of the time for business use. He also warned me that if I tried to, I would be committing fraud.  Again YIKES!

Soon there will be a thought tax!

Vince suggested that I call up the insurance company and share his wisdom regarding only paying what I could honestly claim.  I did and boy am I glad I have a great accountant and friend.  They reduced my bill by over $400. Hooray, I can now buy food and get my car back!

The moral to my story…….don’t just pay the bill…….ask your accountant first.  Even if I had to pay him for the advice, I still would have money left in my pocket. So don’t ever be afraid to ask your accountant a question. Go ahead, pick up the phone and save your money.

Got a similar story? Email it to me and I will post it here! You can also just leave your story in the comments field. We would love to hear it.

On your team,

Mark Kennedy