Not only do entrepreneurs have to collect sales tax from their customers on behalf of the government, Edmonton bookkeeping says that business owners also have to ensure that they are remitting that payment correctly to avoid incurring penalties from Canada revenue agency. This might require simply planning to ensure that an entrepreneur is doing it effectively and accurately.
It is very important for entrepreneurs to take note that they can make intermittent instalments of the sales tax that they owe Canada revenue agency any time they want, and without actually filing their sales tax. As long as they are making under $1.5 million per year, an entrepreneur is only required to file annually. However, they can pay the amount that they owe any time they want.
The reason why a business owner would choose to remit payment more often than once a year is to ensure that they are paying accurately. It may become logistically more difficult to keep track of sales tax throughout the year. Especially if an entrepreneur it does not have the most up-to-date or accurate financial statements. By ensuring that they are paying regularly, can help an entrepreneur ensure that even if they file with mistakes, they are paying the correct amount, minimizing the penalties that they might get from Canada revenue agency.
Another reason why a business owner might choose to pay their sales tax and instalments is so that the closer they get to be year-end, the less they end up owing the government. If a business owner files their taxes late, we will incur charges of interest starting from the date that their sales tax filing was due. If they have paid a significant portion of their sales tax ahead of time, that is going to be a small interest charge, that is going to be much easier for an entrepreneur to pay.
Business Owners would choose to make payments quarterly even if they are not filing because Edmonton bookkeeping says that filing quarterly does not guarantee the accuracy of their tax filing. In addition to that, there is an additional administrative and financial burden associated with filing more often. If it is not going to help an entrepreneur save money, or ensure the accuracy of their filing, then there is no reason for an entrepreneur to spend their time and their money on this.
When business owners are aware of all the different ways that paying their sales tax instalments can benefit their business, they can make a plan to ensure that they are remitting payment on a regular basis. Even if they end up making mistakes on their return, or filing their returns late, at least they will have been paying the government on a regular basis, demising any penalties they will face. By creating this plan ahead of time, can help entrepreneurs focus on growing their business, and working on all of the activities that will help them grow and succeed.
Edmonton Bookkeeping | How To Pay GST Correctly
If entrepreneurs end up filing their GST incorrectly, Edmonton bookkeeping says that they could end up being hit with penalties that may cause financial hardship to entrepreneurs. Therefore, it is very important that whether an entrepreneur is managing the sales tax themselves, or if they are hiring a company to help them with it, they should understand as much as they can about it is that they can create a plan together on how they are going to manage it in their business.
The first thing that entrepreneurs need to understand about their sales tax, is that the filing deadline is going to depend on what kind of entity they have, and how much money they make in a year. Contrary to what many business owners think, people who own proprietorships actually owned GST, as long as they are making over the threshold of thirty thousand dollars in their business per year. For proprietors, they need to ensure that they have a GST number and that they are filing their GST at the same time as their personal year-end which is June 15.
People who own corporations, on the other hand, have a different filing deadline. Not only is the filing deadline different, but it is also a different deadline than their corporate year-end as well says Edmonton bookkeeping. Six months after a corporate year-end is when their year-end taxes are due to be filed, and corporations GST is due three months before that. This is all true as long as the business is making under $1.5 million in a year. Once the business has grown larger than that, they have a different filing schedule. Edmonton bookkeeping says that business is larger than $1.5 million in sales need to file their sales tax on a quarterly or bimonthly basis.
It is very reasonable for business owners to own a proprietorship, and get a GST number. However as that proprietorship grows, if a business owner feels that incorporation is the next step for their business, Edmonton bookkeeper says that business owners need to get a brand-new GST number. The reason why is because a corporation is a separate legal entity, and requires a completely different number than one associated with an entrepreneur, and their finances.
Once they get a new GST number, a business owner will have to ensure that they are closing the old GST number to avoid getting assessed for taxes by CRA. Even if they are not submitting a tax return, the Canada revenue agency will assume that they are still in business if they do not file otherwise. And they will send out a tax bill for an amount similar to what the business did last year.
By understanding how to manage sales tax, and the differences in filing deadlines depending on entities can help entrepreneurs know what to do even as their business grows. By avoiding additional assessments, focus on all of the activities they need to do in order to grow their business.