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Rawski & Company
Chartered Professional Accountants, Professional Accounting Firm, Professional Corporation 201-9488-51 Avenue, Edmonton, Alberta, T6E 5A6 780-761-1115 |
The following article was first published in the St. Albert Gazette:
EXPERT OPINION | ||
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Is inflation significant for employees and owner/managers? Inflation is a measure of price changes over time. The existence of inflation is addressed by the Income Tax Act, which adjusts personal tax credits by the rate of inflation; and, the Bank of Canada whose stated inflation target is 2%. Inflation exists. Not adjusting for inflation means less purchasing power in as little as a year because: a) your gross revenue is less; and, b) your expenses are higher. On $80K this could be $1,600 [=2%* $80K]. Losing 2% on inflows and paying 2% more on outflows is a 4% variance or $3,200. Over two years, not adjusting, could have a significant material impact on your operations. Also, making a 2 or 3 year retroactive adjustment at once is not always an easy sell but understandable. If you require assistance assessing, calculating or implementing a strategy for an inflation adjustment; then, contact us! It could make you thousands!! Show this to your employer/customers. © - Jacob Rawski, 2015 |
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Head office:Elm Business Park, Building #1,201-9488-51 Avenue, Edmonton, Alberta, T6E 5A6 |
Telephone: 780-761-1115info@rawski.ca |