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Ok folks, this is my first year for business tax and what a headache. I am curious how you all account for inventory ?? Do you have to count every scrap of fabric, screw, locknut, eye, spool of thread, accessory etc and put a value on each thing. I assume you do ! God help me :crackup:
Also, for a first year do I have to account for all the "supplies" I owned prior to becoming a business and add them to my inventory count if I used them in 2006 ???? I could just state them as a capital cost and "buy" them at a fair price for my business. Still not sure how to handle the inventory part of that though.
I know, I should just get some accounting advice , but thought it's pick your brains first. Yes, I now it is different in each country etc.
Thanks in advance for any help and sympathy 
Back Road BearsUGH, Tammy!!!!
I was just working on mine last night!
Got a head ache and a tummy ache in the process. Why didn't I start this eons ago?
I'm not giving you any advice as it may be different in Canada than here.
But I am giving you my deepest sympathy.
:hug: :hug: :hug:
Take heart, next year will be easier! 
Thanks Daphne 
I've been getting my receipts entered into quickbooks (for the past week !) . I have the added dilema of my sales and purchases being in US funds and needing to convert to Canadian $ . I know I am not alone and it's all my fault for waiting until the last minute to enter stuff. I swear next year WILL be easier. No more procrastinating !!!
I see a big " feel good" present to myself in the future once I get this done :crackup: :crackup:
Little Bear GuyTammy for your conversion rate from US to Canadian $ use the annual conversation rate set by the bank of Canada. The 2006 rate was 1.13409360. This is also the rate the Canada Revenue Agency will use to convert US to Canadian funds ( don't ask me how I know this :crackup: ).
big hugs
Shane
Little Bear GuyOk now to try and answer your other question about inventory. We don't run an inventory , we expense everything as we buy it. So at the end of the yr we expense all of our mohair purchases or fur purchases and any other purchases from our sales. We also deduct our car lease (that's why we lease our vehicle instead of buying it) it's better tax wise as you can write off more. Plus we have the office in the home expense, plus we also claim a percentage of the house expenses for roughly 35%. Not to mention all of our travel expenses for shows and airfare and gas and parking (I write off absolutely everyting I can) .
Hope this helps,
big hugs
Shane
Thanks Shane. Well, I already manually converted every US amount based on a Bank daily conversion rate chart I found online. What a pain !!! I am not going to go back and change them all , but now I know better for next year. Thanks for that info.
As for the inventory I am still confused. What about the supplies you have left over at the end of the year. I have lots of fur, mohair , eyes etc. at the end of the year. Dont' I have to account for that somehow. I do expense it as I buy it , but for form T2124 (Statement of Business Activity ) I need to calculate the inventory totals for Cost of Goods Sold. Can I just ignore that section ??
I got the home office stuff and everything else sorted out just can't figure out what to do with the inventory/ cost of goods sold part
Ticks me off that you can't expense advertising in Non Canadian magazines, websites etc. And, I read somewhere that you can only expense 2 trade shows a year ???? What's with that !
My brain hurts
Storytime BearsI think you only have to pay inventory tax if you get items wholesale, here in the states you have to pay sales tax on the items as you buy them, I keep all my receipts and turn in all my expenses, being married to an accountant helps, I know some don't report their income from ebay but I have from the beginning, I think at some point people are going to be in deep trouble if they haven't paid taxes on sales from ebay. I just read an article about a person that got in big trouble for unreported income on ebay and they also sold on amazon.
If you get stuck let me know and I will ask my husband and I am sure he can find it out.
Bear Hugs
Jodi
Little Bear GuyI wouldn't sweat it to much Tammy, with the amount of income that you earned I doubt very much that the tax department is going to come after you for an audit 
. I expense all my trips and trade shows, you have to remember that some trade shows are not a sales show so if you are only going to show I think that's different. As for advertising I claim all advertising expenses, whether it's a Canadian magazine or not. I'd fight them on that one for sure if they questioned it and you can write off the cost of your website as well as portion of your internet cost.
I'm not sure about the inventory though, I would think as well because our business's are so small that again I wouldn't worry about it to much.
Jodi in our province (Ontario) we register our business with the province and that provides us with a retail sales number, any supplies we buy whether it be mohair or anything else for the business we are exempt from paying the provincial sales tax on it (would be your state sales tax in the US). We file a provincial tax return every six months, claiming all of our sales including web sales and show sales, but only have to pay the tax on sales within our province.
Not sure if I have helped you or not Tammy, maybe just confused you more
big hugs
Shane
Storytime BearsSee that is like when I had my toy store, the last year I was in business they did away with the inventory tax which was sooooo nice, it saves you so much money, I would hate it here in the states if I had to pay an inventory tax again.
I have a question for you guys from Canada, is Calgary a nice place to visit, my husband is going there in May and I am planning to go to, I have been up to Canada several times and LOVE it!!!!!! but have never gone very far west.
Little Bear GuyHmmm i've neve been to Calgary Jodi, I would suggest doing a new thread on that topic. There are a few artist from that area and I'm sure they could tell you more about it. I am guessing it's gonna be a great place (it's Canada ) I have never been there myself but I know there are a few people from Alberta on TT. I would come along with your hubby anyway, I'm sure you would have a great time, lots of cowboys in Alberta just like the wild west.
hugs
Shane
Tammy...........taxes are such a pain in the ---. I buy all of my supplies tax-exempt, so at the end of the year, I count all my fur, all my cotton (for outfits) all my ribbon, all my eyes, joints, threads......everything, figure out the estimated cost and add it to my list of inventory, as well as all my sales and other expenses and income, give everything to my hubby who gives it all to the tax man, and HE puts all of it on the tax forms! My dad asked me why we did not do our own taxes! HA fat chance! I started taking my fur inventory in January as I started making other animals for 2007........................
take a deep breath, have a drink, smile and start your organising/inventorying/counting/calculating........When all is done.........breath a sigh of relief, have a HUGE drink, smile and dance that it is done!
Ellen
Thanks for all the advice. I tend to be paranoid and want to do everything by the book. Drives my hubby nuts sometimes ! It does seem silly considering the small net income I end up with . But hey, I'm the one who always gets stopped at customs too.......but then again I always have all the receipts for everything I bought. I must have a suspicious face or something 
Happy tax prep everyone ! I'll finish mine by the end of the week if it kills me :crackup: :crackup:
P.S. Jodi I've never been to Calgary either.
Calgary is a wonderful place - lots of shopping shopping shopping!!! I'm from small town Alberta!
When in May will you be there Jodi?
Jane
BruinwerksI'm from Edmonton, the capital city of Alberta, about 3.5 hrs north of Calgary.
Calgary has great shopping and is about an hours drive from the rocky mountains and real bears!
The only cowboys I have seen up close were of the 'urban' variety but you are definitely in the heart of cattle country so you never know. They film lots of movies there.
Heather (psichick) lives in Calgary so I'm sure she can give you the lowdown better!
Cheryl 
Storytime BearsNot sure of the exact date, I think seeing bears in the wild would be both exciting and scary, I can't tell my husband they have great shopping, he'll dread the trip, because I know how to do some serious shopping. :dance:
Past Time BearsJust finished my taxes and what I feared has turned out to be true . . . I had a loss last year. Boooo hoooooo!
Flying Fur StudiosJodi, I have lived in Calgary all my life and I love it. We're just a short drive away from the rocky mountains and it's a big city so there is lots of good dining, shopping and just pretty places to take a walk.
Oh, and Cheryl is right, if you drive into the mountains you will see lots of wild bears, deer and mountain goats. If you like to hike I can recomend some great ones for you.
Any questions, just ask me.
And you'd better look me up! I can take you to our bear/doll store or something.
