Issue 11(30) / December 2009

TAXPRO Canada saves your money
Đóńńęŕ˙ âĺđńč˙

TAXPRO Canada saves your money

TAXPRO CANADA recently opened its office in Concord, Ontario. TAXPRO Canada’s cofounders Vadim Ermolenko and Luba Radchenko told us about the company and why its services are necessary for almost everyone.
TAXPRO Canada  saves your money

DorogaRoad: The first question goes to Vadim. Vadim, you are well known in the community as a trucking company owner, trucking business entrepreneur. Suddenly, you decide to deal with taxes. Why?

Vadim Ermolenko: Based on our rich twelve-year experience we came to the conclusion that particularly in the trucking business, and as we know, there are many truckers in the Russian community – independent owners/operators, drivers, small trucking companies – they face tax issues at the end of the year. Actually, not only at the end of the year, but, practically, any time.

An accounting company is not only about tax preparation, it’s not only bare numbers. We provide information to the people. There is a lot of information, that is constantly changing, and the government keeps making changes. During this recession time, we are helping people – drivers, truck owners – to properly take care of their financial documents, to set up their business structure. The trucker’s job is very difficult, they are always on the road, they don’t have time to deal with it. They come home tired, with a bag of receipts, drop it somewhere, then forget about it, and, by the end of the year it gets lost completely, and this affect tax preparation and deduction in a great way. Or, for example, someone works hard, and by the end of the year they suddenly have to pay $10,000 in taxes. So, why work so hard, save every penny and then pay such a big amount in taxes? This money could be spent more wisely, for example, to be invested in his/her own business, but not just simply paid in taxes. Our goal is to help people in the transportation industry to properly manage their financial situation, especially these days. And, of course, we do tax preparation at the end of the year. Many clients are registered as a corporation that is why they need to do tax preparation as both individuals and corporations. It would make sense to keep both reports in the hands of one accountant. I know this business very well, so by looking at the financial statement of any trucker or owner/operator I can see where mistakes are made, where the expenses are too high, and what to pay attention to.

DorogaRoad: Let’s introduce the third participant of our conversation.

Vadim Ermolenko: With my pleasure. It is our Senior Accountant Luba Radchenko. Luba is well known in our trucking community, she has worked in trucking business for seven years, and before that she had worked at H&R BLOCK for four years, so she knows her field very well. As an example, there are many doctors, first they studied human health and body in general, but then every one of them gets their own specialization: otolaryngologist, surgeon, neuropathologist, etc. So, each of them specializes in their own field. It’s same with us: our team specializes in the trucking business. Of course, Luba can do a tax preparation for a restaurant, store, any manufacturing enterprise, personal tax preparation, of course. Even so, our specialization and our clientele is 80% trucking business – the subject we are carefully monitoring. A new tax season is coming up, again there are many changes related to transportation business. There are certain expenditure items, which were increased specifically for transportation businesses. Many accountants who don’t have such customers and such specialization are just simply not looking into it.

DorogaRoad: Luba, so it makes no difference for you – a hired driver, or an owner/operator can come to you and you will help them?

Luba Radchenko:: Yes, of course. As Vadim mentioned, I have worked in this industry for seven years. I would like to point out that in most cases the biggest expenses incurred by every working person in Canada are taxes, but not everyone understands that the tax amount to a lesser extent depends on the income of the person, and to a large extent – on the strategy of tax reduction (of course, in a full accordance with the Tax Law).

Moreover, the amount of money, which someone manages to save up throughout their entire life to a great extend depends on the tax optimization plan used by their accountant, and to a lesser extent on this person’s income.

Many owners/operators open businesses, corporations, and do not understand what is going on. They may forget that GST is refundable. They often miss documentation, it gets lost somewhere all the time...

We want to help drivers start their business from scratch in a proper way, not to make those mistakes, for which they pay much more than that minimum they paid for tax preparation. We help to set up the business, because often they would open a business and not know how to deal with GST. They open GST account with tax preparation once a year, although it is more convenient to do it every quarter. Although it can be later changed... A lot of their money gets lost because of lack of knowledge of the subject. They can be good truck drivers, but in terms of finance and taxes they don’t know much.

DorogaRoad: In other words, if you want to save money, turn to a specialist as soon as possible.

Vadim Ermolenko: This is true. Usually people think: I don’t need it because I need to pay for this service”. If it were for free, we would have a line-up here. Of course, professionals need to be compensated. I understand owners/operators and drivers: we are in a difficult situation now, in order to earn their minimum, they need to work harder today than five, or even three years ago, and every penny spent hurts. But I can prove to anyone that it would be cheaper to pay for our service than lose throughout the year while not using our services. We will show them where their money is, we will save for them much more than they will pay for our service, plus we should not forget that this money is tax deductable.

Luba Radchenko:: Truckers’ tax situation is often neglected because they practically do not have time to deal with it.

DorogaRoad: You mentioned that receipts often get lost. What are other common tax mistakes?

Luba Radchenko:: I would say GST-related mistakes are most common – they open an account and do nothing with it, always keep missing timeframes.

Vadim Ermolenko: There are certain deadlines for submission of reports set up by the law – by the 30-th day of next month one should submit papers. The driver is not there, he is on the road, did not have time to prepare it, came home tired, forgot about it. The papers are not ready now, not ready later – then it has a snow ball effect. This is the first. Secondly, drivers lose a lot – again, they live on the road, very often one can spend their own money instead of corporation’s funds, and lose the receipts. Throughout a year, it may come up to an amount of several thousands, and it is impossible to deduct anything because the documents to prove purchases are missing. Although most expenses should and could be deducted, returned as shareholder’s advance, and taken as money from their own corporations without taxes. It often happens that at the end of the year they take money but cannot prove that they “put” it there. And they should then pay taxes on the money they invested in their business.

DorogaRoad: Having paid the taxes already once...

Vadim Ermolenko: I had a case where someone could not prove anything because he did not have receipts. In a year, he had to declare bankruptcy because he was supposed to pay $12000 in taxes. I know two or three organized drivers, they have notebooks in trucks, and they do their own simple accounting. But there are only a couple of them, the rest is just physically unable to do it, or they do not understand how it works.

In general, our service is not only about taxes. For example, a person would like to become a truck owner, to register a corporation. We help him, start from scratch, register for him/her a corporation, open all necessary accounts – GST, WSIB, IFTA, start to do accounting. We provide the entire package – registration of a corporation, accounting, not only the tax preparation.

DorogaRoad: Say, a driver learns about your company and decides to come to you. What should he bring in order to be served?

Vadim Ermolenko: He should bring all bank statements and all the receipts, so that we could look into the situation.

Luba Radchenko:: In case the company is already opened...

Vadim Ermolenko: And then we will see what is missing there...

DorogaRoad: We are all a bit conservatives by nature. For 20 years, we refer all our accounting needs to the same accountant, and we are not sure if he/she is doing everything right? It all seems OK.

Vadim Ermolenko: It’s a good question. The market is all occupied, and I realized it when we were opening a company. Our idea is that we are offering a concrete service. Even if you have a family doctor, he will refer you to a specialist if necessary. We are not targeting everyone; but rather our services are designed above all for transportation industry. I am confident our service will be better than that of a general accountant. We will try to provide the maximum of service, and we know our clients’ mentality, we speak the same language with them. It will be easier for them and us.

DorogaRoad: Thank you for the interview.

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Owners of start-up Holland company aim to revolutionize the North American truck industry

Two Holland entrepreneurs are aiming to revolutionize the North American truck industry by introducing drivers to an innovative Austrian-designed truck trailer with side panels that lift up with a push of a button.

Bob Hakken, 52, and Duke De Leeuw, 47, signed a deal this month with Wingliner International to become the sole distributors of Wingliner System kits for sale in Canada, Mexico and the United States. The start-up venture, Wingliner North America Inc., would produce and sell the kits used to transform new truck chassis into a Wingliner truck, bringing jobs to West Michigan and helping truck owners greatly reduce transportation operating costs.

The partners hope to begin contracting out the manufacture of component parts and the assembly work to local Holland-Zeeland companies in early 2010. Visits to Plascore, Inc. in Zeeland, Genzink Steel of Holland and BuhlerPrince Inc. of Holland have taken place but no deals have been signed, Hakken says. He estimates the work could result in creating five to 10 new local jobs next year.

"We just really believe in this product and see a bright future," says Hakken. "This could really snowball into something really big because it's cost effective. We're very excited."

Unlike traditional truck trailers seen on North American roads, the side walls of a Wingliner can be moved into any position. They can be brought to rest flat on the truck roof in 10 seconds using an hydraulic circuit started by a push of a button. Loaded goods can more readily be accessed in the shortest possible time from the trailer's sides and back. The company says there can be an enormous reduction of time and operating costs with every loading and unloading process compared with conventional trucks.

Wingliner North America plans to produce a variety of Wingliner kits containing the components needed to transform the chassis of any type of new commercial vehicle -- truck, trailer, semi-truck, swap trailer, container or dump truck -- into a Wingliner.

Only a handful of Wingliner trucks exist in America. One has been used since 2004 by another Holland company owned by Hakken and De Leeux: Wagner Wood Products. The demo Wingliner vehicle was discovered while the pair was searching for a better delivery system for their newly purchased distributorship of small hardwood and plywood goods at 80 W. Lakewood Blvd. Hakken says company drivers immediately recognized a "tremendous impact" on time-saving efficiencies while making loading and unloading products. "It's all about efficiencies," he says.

"In the trucking industry, pent-up demand is growing," Hakken says. "So many fleet owners have been sitting on the sidelines due the economy. But as that turns, they'll be faced with replacing equipment on the road. They'll be looking for ways to become more efficient."