The Grumpy Accountant – Book Review and Giveaway

The Grumpy Accountant – Book Review and Giveaway

Ya, I’ve met a few accountants in my day and they can be grumpy.

Yet contrary to the jaded façade that Neal Winokur wants you to believe, he’s not really that grumpy.

In fact, he’s quite pleasant and very bright.

He’s just exasperated like I am, like many of you are probably, with our unnecessarily complex tax act and system.

From Neal’s book, The Grumpy Accountant:

“I have seen how honest, hard-working people get ensnared in the maze of an uncompassionate and faceless bureaucracy. Canadians spend approximately $7 billion every year to file their individual income tax returns, averaging $501 per household.”

I mean, that’s a staggering number unto itself. Let alone the colossal financial waste that goes into maintaining such a beast at multiple government levels.

I could go on this, but I’ll let Neal do all the talking. I mean, he wrote a book all about it. A tale in The Grumpy Accountant to propose ideas how to streamline our tax system once and for all.

Neal, welcome to the site and happy to interview you and understand your book better: The Grumpy Accountant.

Great to be here Mark and I admire your site. You’ve written so much great content over the years to help Canadians, not to mention, support your own journey! I hope you keep it up!

The Grumpy Accountant

That’s the plan Neal, I enjoy running the site and it’s a nice hobby for me.

OK, now to you. Can you tell readers a bit about yourself? What you currently work at and what your qualifications are for slashing our tax system?

Sure thing Mark.

I wrote this book based on my own experience as a tax accountant over the past 10 years. The past 7 years I have had my own practice. As my practice has grown, so has my grumpiness!

I have filed hundreds of tax returns for individuals, self-employed, and small business owners each year. Although I don’t consider myself an advanced specialist that knows every word of the Income Tax Act, what I do know is how the system generally works and how people are suffering under it. That is what I see every day in my role. Just the other day, for example, I was trying to change the address for a client and the service is down for maintenance. It has been two weeks that I have been trying to do a simple thing – change an address! I advised the client to call the CRA but he cannot get through on the phone. I have experienced frustrations like these daily, for years. The book is based on my experience and that is where my credibility comes from. I have had years of experience and realized that there are much simpler ways we can do things.  

When it comes to taxation – heck ya. I try not to complain about it too much on my site but I think navigating our tax system is an absolute nightmare, and I only understand the basics unlike yourself. So, I assume the grumpiness inspired the book?

Yes, it did.

As a tax accountant I am able to help a few hundred people or so each year, but I felt by writing this book I could help millions of Canadians. In my job I see how frustrating and complicated the system is (to your point Mark) and how it even affects people with modest incomes. The current Canadian tax filing system causes much unneeded suffering. I realized that instead of assisting only a few hundred complete their tax filings each year, I could share my tips and a vision that could change the system so that it is simplified for everyone.  

One of the worst tax nightmare stories that I experienced that really inspired me to finally write the book was when I was working with two women who owned a small business. They had a corporation for their small business and paid themselves $30,000 per year. They were unaware that they had to give themselves a T4 slip and their corporation had to deduct CPP and income tax from their own pay as the owners. They showed it as self-employment income on their tax returns and the corporation showed it as consulting expenses. Well, the CRA audited them and made them go back for two years and redo all their tax returns, issue T4 slips and make the corporation pay the payroll tax that had already been paid from their personal tax returns. So, all the tax and CPP was paid! They just happened to follow the wrong bureaucratic procedure. 

It was that story that really pushed me over the grumpiness edge. I could not believe that the CRA made these hard-working small business owners go back for two years and redo their tax filings. It actually took about two years to sort out because the corporation could not pay any additional payroll tax because it was already paid on the personal side. They had to wait to receive the personal tax refunds, deposit the money into the corporation, then pay the payroll tax. It was a bureaucratic nightmare. In the end, the CRA collected no additional money. It was all a waste of time for nothing. I thought, can’t we just make it simple. If we combined the corporate filing with the personal filing this could all be avoided. 

Well said, so on that note Neal – I’ve started the incorporation process myself. I’m not intending to pay myself a salary (nor dividends) from the corporation at this time since I still have a full-time job that I enjoy. What advice do you have for me? I’d be curious if I still have to pay myself a salary (I certainly don’t think I do!)

You’re right Mark, you don’t. And I think you’re wise to incorporate if your blog or other business ventures are making some money and increasing your personal taxable income.

Without knowing all the details on your corporation, but assuming it’s a transfer from your small home-based business to a corporate structure for tax purposes (Mark – it is); and assuming you don’t need the income from the corporation right now, then the ideal would be to leave as much profit as humanly possible within your small business corporation. If you already have a full-time income that shows up on your personal tax return, then you are likely in a decent personal tax bracket. By leaving profit in your corporation, you will save a lot of tax over time. The corporate income tax rate on “active business income” for the first $500,000 of profit is only 12.2%, which is the combined federal + Ontario rate for 2020. This is extremely low when compared to the high rates of personal income tax. So as long as you don’t require the funds within your corporation for personal use, leave them in the corporation, pay the low corporate tax, and invest the after-tax profit. Keep in mind, as soon as you withdraw the funds for personal use, you will have to report that as a salary and/or dividend to yourself and you will pay the high rates of personal tax at that time. Rule of thumb: if you don’t need the money, leave it in the corporation!

Exactly my plan Neal.

So Neal, I feel soooo many Canadians get this wrong….I’ve written about this on my site many times, why are CRA tax refunds not desired?

In plain language for people that haven’t gotten the message yet – what does that really mean if you get a fat tax refund?

By the way Mark, that post you did with Robin was excellent and you’re both spot-on.

I’ll be more blunt since you were too kind in that post Mark: if you are receiving a big fat juicy mouth-watering tax refund each year, it means that you are a sucker!

You are loaning the government money and not charging them interest on the loan. I hope you never start a bank because if you lend money without charging interest, you won’t last very long.

A big juicy tax refund indicates way too much tax is being deducted from your pay cheque and then the government is returning it to you each year in one lump sum. There are ways of requesting less tax to be deducted from your cheque if you are in this situation every year. 

The tax refund is probably the greatest evil genius that the government came up with. It makes people look forward to filing their tax returns! The majority of Canadians receive tax refunds. The federal government refunded approximately $32 billion of income tax in the 2018 tax year!  Sadly, it’s the minority of tax filers – those who are self-employed and owners of businesses that are responsible for physically paying all the tax to the government. They feel the pain of actually physically paying tax whereas employees, who have tax deducted from their cheque don’t really see it or realize it. In fact, it’s the opposite, because they receive nice juicy tax refunds. So we have a two-tiered tax system. Those who physically are responsible for making tax payments and those who get nice juicy refunds. 

Just wow and really makes you think Neal.

Last but not least, since your tale in The Grumpy Accountant covers a lot of ground, what key takeaways (maybe 3 or 4 below) would you say most Canadians should really be mindful of when it comes to our tax system, CRA scams, death and taxes and more?

For sure Mark, the book with Jerry (a fictional character representing the average Canadian with our inefficient tax system) and his grumpy accountant, George, covers many subjects.

If I was to distill key tips and tricks down to a few essentials for Canadians that would be the following:

  1. Use technology! CRA My Account online, CRA My Business Account online, and scan in your receipts throughout the year so you’re ready to go at tax time. The CRA’s online system, although not perfect, are a lot better than using their telephone systems and waiting on hold forever! So, make use of the technology that’s already out there. In “My Account” you can access your notice of assessments for the past 10 years, see your account balance, your TFSA+RRSP contribution room, and a LOT more.
  2. Use your registered investment accounts! If you are not maxing out your TFSA each year, if you aren’t contributing to your RRSP, or RESP for a child, it’s never to late to start. Small amounts do add up over time due to compounding. If you have cash or investments that are not in a registered account (TFSA, RRSP, RESP), then consider investing within these registered accounts first to save the tax on the investment income.
  3. Anyone who is self-employed MUST ABSOLUTELY speak to a tax advisor before going on the adventure of self-employment. There are so many ways to make mistakes and forget things. There is a HUGE burden of compliance placed on those who are self-employed. It can be very frustrating and costly. My # 1 tip: SET ASIDE ALL GST/HST you collect and a certain percentage of your revenue so you will be able to pay your GST/HST and income tax when the time comes. I’ve seen so many people fail to do this and it causes huge problems. I know it’s difficult but it’s a must. That is until we put enough pressure on our politicians to change these archaic laws to make the system simpler!

(Mark – further reading, why I believe managing the RRSP-generated refund is the linchpin in any TFSA investing debate.)

Great stuff Neal and it was a pleasure to have you on the site.

As always, when I review the book and talk to the author, I have a copy to giveaway! 

Check out those giveaways details below, enter to win and enjoy a copy of The Grumpy Accountant with thanks for Neal Winokur. Neal will continue to lurk my site but he’ll also subscribe to comments below in case you have a question about the book or anything tax-wise in general terms. Neal can reply and provide any follow-up resources as best he can.

Neal Winokur, CPA, started his practice in 2013 and his grumpiness has grown ever since. An active blogger, several of his articles have been published in the National Post. Neal feels a moral obligation to speak out against the inherent flaws, unfairness and needless complexities that define Canadian tax. His dream is for the Canadian tax system to be massively simplified to the point where his job as a tax accountant would no longer exist. His wife won’t be too happy about this, but it’s for the good of the nation. Ha, we can only hope 🙂

You can find Neal online here.

Thanks for reading everyone, and go get a copy of the book to improve your tax acumen.

I’ll email the winner of this giveaway early in the New Year at the start of tax year. I’ll have more giveaways, interviews with experts next year of course, much more free stuff as always. 


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81 Responses to "The Grumpy Accountant – Book Review and Giveaway"

  1. Have just finished a mini-HST audit, triggered by wrong advice received when I called CRA about filing my final HST return upon retiring. Thankfully I got the name and ID # of the CRA rep and a very considerate auditor who actually talked me through the situation. Ultimately I owed just $3.27 which was waived by an administrative adjustment. It took many phone calls across the country and a couple of hours not to mention a stressful few months. It all hinged on having a small amount of “exempt” income versus “zero rated” income. Curiously, the auditor said “we all make mistakes”, while she was acknowledging the error in the advice I had been given. Hmmm, but it took quite awhile to convince her that I too, had made a mistake.

    Now that I’m retired, I can focus on tax implications of retirement investments and strategies and I have the time to read more books, like Neal’s book. Would love to win a copy – thanks for putting your thoughts and experience on paper.

  2. Oh man the stories I have on small business tax and cra audits as well as bad accounting advice are doozies. It cost money along the way but we think we have our incorporated small biz super dialed in now. Personal side has been solid for years and I think the lessons we learned as small business owners and the self employed side helped. Great advice on the using online tools as much as possible, for the biz we use My business and personal my account and my service are what make tax time easy. A great accountant is a huge asset and if you can’t find one I am sure this book while be the next best thing.

    1. Great to hear from your Chris. Will have to have you on the site in 2021 for a profile!

      Yes, a great tax accountant is huge and if you’re beyond some simple T4s and T5s, likely very beneficial!

      All the best to you!

  3. Will, its stories like yours that make me seriously rethink agreeing to be executor for my elderly parents. The CRA delays may not go away with a trust company but most of the interaction headaches involved probably would.

    Good luck finally getting yours wound up.

    Neal, I’m sure you’ve seen it all! Insane is right.

  4. I rarely comment on any articles but this one hits close to home. If you think personal/small business/corporation taxes are a nightmare, try sorting out estate taxes. We have been dealing with the CRA for close to 3 years with the assistance of great lawyers and accountants and it never seems to end. Bottom line is that we have a significant amount of money sitting in a bank account earning nothing because we are not allowed to do do anything with it because of the CRA regulations. You would think that the government would want this money to be in circulation adding to the economy but it sits in the bank. We are now going into our 3rd reassessment and there is no end in sight. The only benefactor is the bank who is able to use our money for free. We finally got to the stage where the CRA had a person contact me to get the Clearance Certificate finalized and she was told (from another CRA department) that ANOTHER form had to be completed and ANOTHER reassessment performed. The people who passed away were hard working, honest people who paid an enormous amount of tax before and after death. It is absolute lunacy.

    1. I feel your pain. I have seen so many similiar situations like this with regards to estates, final tax returns filed on the date of death, t3 returns after death etc. It never ends.. It’s absolutely insane.

    2. Wow, that is terrible Will. Thanks for sharing. It’s simply too bad our government can’t see the forest for the trees per se on this. Having such bureaucracy is a waste of time, money, energy and other (i.e., mounting and unnecessary stress) for all involved. I don’t get it.

  5. I like to educate myself better on personal finance matters and am the person in the household that looks after the taxes, I can do with all the help I can get and it sounds like this book will be helpful indeed.

    1. Yes, the time has come for massive simplification. It’s absolutely ridiculous that we still have a system in which even taxpayers with low and modest incomes have to suffer through CRA audits and reviews of their medical expenses, child care deductions, donation receipts etc. It’s completely nuts and I realized, after doing this work for 10 years, that I simply could no longer remain silent. I have to speak out and advocate for simplification.

  6. Pretty comprehensive and useful sounding book Neal. I have a friend who was a senior CRA corporate tax auditor and heard many stories from him, and about how complicated our tax code is!

    May have to look for a copy.

    1. The Income Tax Act is WAY too complicated, it’s a nightmare, a horror show, and it’s insane that the CRA’s budget is approaching $5B per year. $5 billion!? $5,000,000,000,000.. it’s quite unfathomable when you think about it… absolutely insane! Everyone knows this truth, nobody denies it. I don’t see anyone walking around saying “you know, I love the Canadian tax system, it’s so simple and easy, no one has any problems with it, we should be so proud of it!”

        1. Agreed! It is totally bonkers. OAS should simply be combined with the already existing GIS and re-targeted.
          There’s just too much administration and duplication of administration in so many different programs. Needs a complete review at once!

  7. Great interview Mark and Neal! And I love the “grumpy” angle! Neal – completely agree about the necessity of the CRA online account – has saved me countless hours! Their toll-free number might as well be called 1-800-HOLD-FOREVER! One thing I noticed recently is that there used to be a link between the CRA online account and Service Canada (where you could get CPP/OAS info). Looks like that link has been discontinued (forever?) – it’s too bad because it was convenient. Now I have to try to remember multiple logins/questions – although I’ve tried to make it easier by using my banking login. Anyway, wanted to mention that – keep up the grumpiness!

    1. “Grumpy” is a true story. I was at a family dinner a couple years back and I was complaining about everything I felt was wrong with society. My mother said “You sound like a grumpy old man”. I thought that was hilarious and the word “Grumpy” stayed in my head for a while and I knew I would put it good use. Ask anyone who knows me, I am extremely grumpy when I’m doing this work and especially in tax season.
      Regarding trying to call CRA, I do find if you call right at 8 or 9am you can get through faster but you’re basically right!
      Yeah Service Canada is separate – you have to create a separate My Service Canada account, why can’t this all be combined??? Better yet, why can’t CPP and OAS just be combined into one!?
      So many ways to simplify
      Why not combine OAS, GIS, Canada Child Benefits, and GST credits into one simple guaranteed income???
      So many ideas…

    2. CRA is a nightmare to deal with these days, sadly, layers of bureaucracy have created this over the years. I don’t blame the front-line employees at CRA. They don’t make the rules!

  8. Good luck Neal. Wear good hiking boots, there’s a long uphill climb on that trail! Self employed for many years, I was lucky to have married an accountant who suggested we hired a certified public accountant…thank God. My only “accounting” job was to push the accountants into the “what more can we pass as an expense area”. Most people can’t imagine the benefits of running a small corporation from your home. ( I always felt it wasn’t fair). Now retired, we use TurboTax. Good idea to invest corporate profits. As with personal investing, if your at it for many years, you generally win. I hope your book lands on the desks of our government hierarchy. Maybe it will be the spark that starts a serious conversation.

    1. I know this is a long battle but I feel that millions of Canadians and even many policy makers all agree on the need to simplify the tax system. People across the political spectrum will disagree on the details of what that looks like and on other details, but in principle, everyone agrees that the current system is way too complicated. Politicians are afraid too touch this issue because it would be very controversial to engage in massive broad changes to the system. But a full comprehensive review of our tax system is well over-due. In fact, it’s been over 50 years since the Carter Commission released its report after 5 years of careful study in 1967. We absolutely must simplify as much as possible as soon as possible. I hope that if enough normal human Canadians (non-politicians) read this book and more people start speaking about this, it will become more of a political issue that governments are willing to engage with.

  9. I’m very please to know that you have a section for retired people. I’ve always done my tax returns as an employee but now that I’m retired, it has become more complicated…

    Taxes in retirement are a painful added complexity to learning to manage and live out of various sources of income that are taxed differently, learning to live in decumulation vs accumulation phase, learning self investing (thanks to Mark that was the most important inspiration and source of info for me on this), with less benefits, more ‘money worries’, etc.

    Your book will for sure help here, thank you for writing it!

    1. Yes, The Grumpy Accountant progresses through every stage in life of the typical Canadian from post-secondary education all the way to death!
      Canada’s retirement system from a tax perspective has become WAY too complicated: CPP, OAS, GIS, RRSP, RRIFs, age tax credit, pension income splitting, pension tax credit, deemed disposition at date of death, estate planning..
      I tackle some of this in the book!

  10. Excited to read and understand Neal’s approach to simplify our tax system which needs an overhaul. As we become educated we also are better equipped to pass along our understanding and knowledge to others, not unlike yourself, Neal and so many other helpful people that have figured out a better way to keep ones money. Thank you Mark for your posts and willing transparency, it has been a very real support and encouragement.

  11. Thank you for the great tips, Neal. I use technology and go at least once in two months to both CRA My Account online, CRA My Business Account online. The system could be better like you said. Business people usually have time to work on administrative paperwork after the day is over, in my case at least its after midnight – and guess what most of the time CRA website is under maintenance at that time. It is frustrating. Small business owners as you said need the most help and that is where CRA needs to improve their services the most. A quick question: I am not sure, I understand what you mean by “scan in your receipts throughout the year”? Did you mean scan them on the CRA My/Business online accounts?

    1. Thanks for your comments. The CRA has improved their technology but still has a way to go. Really. it’s not their fault. If the tax system wasn’t so complicated in the first place, then we wouldn’t need to interact with CRA as much as we do now! So we need the Department of Finance to make legislative changes to the actual legislation.
      Scan in receipts – I mean like using an app on your phone or QuickBooks Online with ReceiptBank to scan your receipts for expenses throughout the year so at the end of the year, you are ready to go.

      1. Great advice for small business people on the go. Being able to do a quick photo of the receipt as soon as it hits your hands, is the easiest and fastest way to catalogue them. I also like to use the Quickbooks Online app on my phone to track my mileage as I drive around. Great new(er) feature.

      1. Can’t wait to get the book Neal. U say leave money in the Corp. I do that to minimize tax like u say. But Trudeau wants to tax the corps cause we’re using them as our pensions down the road by investing in stocks etc… u start making over 50k passive income they want more money. So what do us self employed do then? Thx u, Great post mark

        1. Great question. Yes, the new rules implemented in 2017 regarding passive income in these corps as well as TOSI – tax on split income, are some of the most complicated horribly written pieces of tax legisliation in the history of humankind, very punitive, and were done with basically zero consultation with tax experts.
          You need to speak your accountant/tax advisor. You may want to consider a holding corporation separate from your operating corporation and that may do the trick, hold the investments there perhaps. But you gotta get specific advice for your situation.
          Also, it’s usually not a good idea to hold massive investment portfolios in the exact same corporation you are operating your business in for legal liability issues, but you can dividend out cash to a holdco (tax-free dividend) and then invest the money there..

          1. Very interesting. We should cover TOSI and more; how to get money out of a corporation tax-efficiently, etc. in some future posts Neal in 2021 if you’re game? I suspect there could be a set of interesting topics! Always mind-boggling to me why our government makes things so utterly difficult.

  12. “Anyone who is self-employed MUST ABSOLUTELY speak to a tax advisor before going on the adventure of self-employment”. Great advice.
    It’s becoming harder to incorporate because you have to show CRA that your business income is different from your personal income. Get the incopration set up correctly in the beginning and save yourself big headaches. later.

  13. I learnt last night, during an online Canadian whiskey tasting, that the Canadian tax system came into effect in 1917. Now that we are over 100 years in, perhaps it might be time to follow the grumpy accountants recos and implement some changes.

    BTW, my accountant is sometimes grumpy but I love working with him.

    1. Yes, I talk about this in the first chapter of the book. The income tax was introduced as a TEMPORARY measure to cover the debts of World War 1! After the war was over, the income tax stayed, of course, and here we are, over 100 years later, with the income tax. Except in 1917, the income tax legislation, known as the Income War Measures Act, was only 11 pages long, could be read in 20 minutes, and only required the top 2% of income earners to file a tax return and pay income tax. Today, the Income Tax Act is over 3,000 pages, contains over 1,000,000 words and forces nearly everyone to file a tax return and pay income tax!

  14. Just a quick clarification, technically it is the Income Tax ACT in Canada, and Internal Revenue CODE in US. Due to pervasive US media influence, this misnomer is slipping in more and more in our personal finance vocabulary. It is up to me to stop it. 🙂

    1. Yes! About 25% of the book is all about self-employed and small business owners including tax tips, real-life stories that I’ve experienced and ideas on how to simplify things for this very important group!

  15. This book sounds intriguing! I think grumpiness increases with any job. We could write a whole series: grumpy teacher, grumpy chef, grumpy cashier, etc

    Looking forward to reading about your thoughts of simplifying the Canadian tax system.

      1. What can be done to simplify the personal tax system? A flat tax? This is something that really interests me. Should we simply write to our member of Parliament? I think the Minister of finance has her hands full right now…?

          1. So much to say here! Flat tax is the simplest solution (aside from abolishing the income tax altogether and replacing it with a higher sales tax). A good compromise solution is 3 simple tax brackets, with ZERO deductions/credits. First bracket up to 50k of income – pay zero tax… next bracket from 50k-500k pay a flat rate.. then any income above 500k pay another flat rate…
            that is simple simple simple simple simple and still provides for graduated progressive tax rates that Canadians hold so dear, which were advocated for by Karl Marx! (just a fun piece of history..)

            1. Yes, correct Neal and exactly my thinking, a threshold whereby no low-income earners pay tax but they also have zero deductions or credits. Basically, there is a benefit to working – then that’s where the flat tax comes in and there are incentives to earn more income due to flat tax.

              1. Right
                And we can even provide some sort of guaranteed minimum income for those below a certain level of income a la Milton Friedman’s negative income tax which provides more incentive to wean oneself of the guaranteed minimum income

                1. It would be great to have a simplified tax system. But instead of a guaranteed minimum income, the federal government should create a way for all communities to offer guaranteed jobs to all that are able. Anything that comes free is always abused. This is not often discussed in the media but should be explored as an option. In the book The book, The Deficit Myth by Stephanie Kelton, is an enlightening view of what is possible.

                  1. Well said!
                    I’d rather any sort of guaranteed minimum income or such program be administered provincially as the provinces can do it better based on cost of living in local places as opposed to federal bureaucrats running the program from Ottawa.
                    The government is already spending $80B per year (pre-covid) on direct transfers to individuals: $5B GST credits, $25B Canada Child benefits and $50B combined on OAS and GIS.. so we can simply take those funds and re-target them better and more efficiently.
                    The Deficit Myth is interested but I respectfully disagree with it and think the premise is completely untenable. Lots to say on that!


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