fbpx
If you think Americans are the world champions at creative accounting, think again!
Share on facebook
Facebook
Share on linkedin
LinkedIn
Share on email
Email

O Canada!

Time to play a word association game: what jumps into your mind when you hear the word “Canada”? If you’re like most Americans, it’s ice hockey or curling. Maybe it’s poutine, that irresistibly savory shotgun marriage of french fries smothered in cheese curds, and gravy that gives Canadians a helpful layer of belly fat to insulate against the winter cold. Or maybe you picture Dudley Do Right, the cartoon Mountie. Whatever your answer, it probably fits into the cliche of Canadians as “nice.”

Unfortunately, all those nice Canadians live right across the world’s longest unguarded border from (*checks notes*) us. Former Prime Minister Pierre Trudeau once likened it to “sleeping with an elephant.” Comedian Robin Williams, who filmed several movies there, drew a sharper contrast, once saying, “You are the kindest country in the world. You are like a really nice apartment over a meth lab.” Sometimes American temptations float over the border — including the temptation to fudge on taxes.

This week’s story takes us to Good Fortune Burger, a Toronto burger joint that temporarily renamed some of its sandwiches after office supplies so you could expense them. So, for example, the $10 Fortune Burger became the Basic Steel Stapler. The $11 Diamond Chicken Burger became the Mini Dry Erase Whiteboard. (What controller would look twice at that charge?) Vegetarians could order the Wired Earphones with Mic (formerly known as the Emerald Veggie Burger). And if you were just looking for a snack, the CPU Wireless Mouse looked suspiciously like parmesan fries!

Burger fans ordering the faux-labeled food may get a naughty thrill out of submitting the fake expenses — a bit like teenagers sneaking booze out of Mom and Dad’s bar and replacing it with water. As for the restaurant’s owners, they’re probably sitting by their phone waiting for the MacArthur Foundation folks to call with their Genius Grant. But the nice auditors at the Canada Revenue Agency are probably bracing for a deep dive into some grease-stained paper receipts.

Sign up for The Briefs

Over 20,000 CPAs, tax professionals, and financial advisors subscribe to The Briefs. Subscribe now to receive expert insight on growing your business, links to the latest Tax Beat and Tax Tactics articles. You will also receive invitations to webinars, events, and special offers. Published weekly.

Here in the states, none of that chicanery would matter. While the tax code has traditionally let you deduct 50% of most business meals, last year’s COVID-19 Relief Bill raised it to 100% for 2021 and 2022. North of the border, though, the 50% limit still applies. (Ice road truckers and other long-haul drivers can deduct 100% of their meals for eligible trips.) So, reclassifying your 50%-deductible meal as 100%-deductible office supplies really can give your deductions as a boost.

Now, deducting $5 extra from your $10 meal means you’d have to eat a lot of burgers to move the needle on your refund. But Canadians will put anything in their mouths — they’re perfectly happy snarfing down jellied moose nose, deep-fried pork jowls dipped in maple syrup, and “flipper pie” made out of seal flippers. So we can totally see some cash-strapped entrepreneurs eating a month’s worth of burgers to outfox the tax man.

(If you’ve nicknamed your accountant “the Chef” because of how he “cooks the books,” don’t worry, he figured this all out long ago.)

Today’s Covid-battered economy is pushing the most creative minds in business to work overtime to stay ahead of the game. We love seeing them applying that same creativity to trimming taxes. We’re just glad that we’ve got “nicer” strategies for your tax bill here at home!

Tax Beat is a weekly column with a unique angle: making taxes entertaining. Every week Ed explores the humorous aspects of taxes and current events. 

Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.
Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.

save your clients thousands and build a million dollar business

Get your FREE Copy Of Selling Tax Savings

Previous Issues of The Briefs

Big Yellow Taxi

Here’s what you don’t know about those big-box stores on the edge of town.

Membership includes everything you need to grow your business:

Have questions before you sign up? Schedule a 30-minute meeting.

Get the tools you need
to build your business and impress your clients for $99

Recent articles from Ed Lyon and Tax Master Network

Big Yellow Taxi

Here’s what you don’t know about those big-box stores on the edge of town.

Get Your Free E-Book

Enter your email to receive “Selling Tax Strategies” directly to your inbox!