The reason why an efficient sales tax strategy requires planning according to Edmonton bookkeeping is that it is a very complex issue for a number of reasons. If entrepreneurs are not aware of all of the complexities ahead of time, they may get to the end of their year, file their sales tax return, and realize that they have done it incorrectly. This may result in additional interest charges, or even being hit with penalties due to the nature of their errors. In order to avoid this, entrepreneurs can come up with a plan on how to collect, remit and file their GST.
One of the first things that are important for an entrepreneur to know early on in their business, is that there GST return is going to be due three months before their corporate year-end is due. If entrepreneurs are keeping updated financial statements throughout the year, when the file their sales tax return three months before their corporate year-end, that can result in significant errors. Even if they have accurate financial statements, there still may be errors when they file sales tax.
When a way to mitigate there GST filing having errors, is to wait until they have completed their corporate year-end. However, Edmonton bookkeeping says that this means entrepreneurs will need to file their sales tax return three months late. If this is the case, they will owe interest on the amount of sales tax that they owe Canada revenue agency for the three months that they are late. However, paying interest in three months is often a better prospect than the penalties they could get from filing their sales tax incorrectly.
One thing that entrepreneurs can do to minimize the interest that they will owe by filing late, is to remit sales tax intermittently throughout the year. Since it is possible for entrepreneurs to make their sales tax payments in installments without actually filing their sales tax, this is a great solution to ensure that when an entrepreneur files their sales tax rate, they will owe the minimal amount in interest charges.
Many entrepreneurs might think that if they’re paying their sales tax installments, they should just start filing quarterly, instead of annually, and then avoid filing their sales tax three months late at the end of the year. Unfortunately says Edmonton bookkeeping there can still be errors with a quarterly sales tax filing, and the only way a business owner can find that out is if they complete their corporate year-end. all that filing quarterly will do, is increase their administrative burden, which can cost additional money, especially if they are using an Edmonton bookkeeping company to help them with their financial statements or their filing.
By being aware of when there sales tax is due, and how they can manage went to pay can help business owners ensure they are filing accurately, and minimizing interest. This takes planning ahead of time, at the beginning of the entrepreneurs a fiscal year. By doing this, entrepreneurs can ensure that they are managing their finances in their business that will help them be successful.
Edmonton Bookkeeping | Efficient Sales Tax Strategies Require Planning
It is very important that business owners are aware of what is required in managing their sales tax including collecting it, paying it and filing it says Edmonton bookkeeping. Regardless of if an entrepreneur owns a proprietorship or corporation, if they are over the threshold, they will have to apply for a GST number, and collect and remit sales tax to the government. Learning how to do this efficiently is important to ensure that business owners are doing it correctly, and avoiding making mistakes that can end up costing them in the long run.
When it comes to when a business owner is expected to file their GST, it depends not only on their entity but how much money they make in a year as well. Proprietorships have until June 15 to file GST, which is the same as their personal tax deadline. If the business is a corporation, however, there sales tax deadline is three months after their corporate year-end, as long as they are making under $1.5 million per year. If they are making over that, they will need to file GST quarterly.
If a business owner has a corporation but is still making under $1.5 million, they need to understand that the GST is going to be due to file before their corporate year-end is due. This is important to note so that they can ensure that they are keeping up-to-date financial statements throughout the year to ensure they have the most up-to-date information possible, increasing the chances of their GST filing information to be accurate.
Many business owners believe that they can manage their own sales tax by themselves because they are very familiar with their accounting software, which has a built-in capability to deal with sales tax. However, Edmonton bookkeeping says that business owners should be very careful if this is there strategy because accounting software is not able to handle all of the complications associated with managing sales tax. Each software has features that it is good at when managing sales tax, and weaknesses. If an entrepreneur is counting solely on their software, they may end up with mistakes.
However, if business owners hire and Edmonton bookkeeping company, they can ensure that they are getting accurate and up-to-date financial statements throughout the year, and as accurate as possible year-end GST filing as well. Bookkeepers can also file sales tax on behalf of business owners, as long as entrepreneurs sign a consent form. By allowing an Edmonton bookkeeping company to handle this on behalf of business owners, can allow them to spend their time focusing on growing their business, and allowing the experts to manage what they are good at, that business owners can ensure that is being done accurately as possible, while they work on building a successful business.