Good morning and welcome to another episode of always up to date. I’m Denise and this is [inaudible] and we are a coolers of always bookkeeping. Today we are going to be talking about managing your sales tax. Um, our quotes for the day is Zig Ziglar. Um, and he said when you’re, when you stopped planning and preparing, you stop winning. Um, the statistic that we have is, um, from Fraser Institute, uh, the average Canadian pays 43% of income and taxes, which is tax CPP, EEI, uh, GST, fuel tax, et cetera. And by comparison, on average, only 37% of the remaining income goes towards basic necessities like shelter, food and clothing. Um, so you know, we have a business owner who had to self file quarterly GST returns and after the hearing and was completed by the accountant, the GST returns did not match the filings at the end of the year. Um, so y’all way, I just have a few questions that, um, people might want to ask to make sure that their GST is being filed properly.
Um, so as a small business owner, when do I have to file GST? Um, it really depends on, um, what entity you have. So yeah, for example, if you have a proprietorship, uh, for, uh, for people in Alberta or, um, in Canada we have until June 15th to file or GSTs for, uh, cause we filed or our businesses with our personal taxes or proprietorship are due in June 15. Now you, if you have a, um, a corporation, then normally it’s three months after your year end if you’re filing annually with Edmonton Bookkeeping. And, um, if you have, if you are a quarterly remit or then it’ll be a month after department that you have to file your GST. Yep. All right. Um, so how often should I file my GST? Um, there’s, uh, a few frequencies that you can choose. You can choose to follow them monthly or quarterly or, and lead based.
Uh, basically, uh, if you’re under 1.5 million in revenue, you’re not, um, required to file quarterly. You have the option or month B, you have the option to file annually with your year end. Um, but again, your year and my, uh, your actual corporate tax might be a different deadline than de GSD. For some reason the Canadian government decided that your GSD should be calculated even before you’ve completed your year end, which is I, I don’t know. I [inaudible] I didn’t know what to say about that. I don’t know cause the reasoning behind it, they probably just want the, um, the GST to be remitted as quick as possible because again, this is not something that you earned. This is something that you charge your customers and on behalf of the government. So that’s probably why. But yeah, so it’s, um, it, it, uh, you can file annually, um, if your revenue is under 1.5 million with Edmonton Bookkeeping.
Yup. Uh, so is there an advantage on filing the GST annually? Um, absolutely. Um, well first of all, you don’t have the administrative burden to do the, um, to do the GSD filing us often. And also, um, if you are doing your year end, chances are you’re going to have some transactions that you might have not seen or in mind you might have a double entry or there’s so many things that could happen, uh, that you won’t discover it until, uh, your accountant finished the end of the year. So you might as well do your annual, um, G S E filing would your year and to make sure that it actually matches your year end and um, there’s less, um, the, there’s less room for mistakes in audit, so yeah, those, Oh, sorry. Yeah, no, go ahead. We talk about, um, you know, some clients get um, scared that their DST is due three months with Edmonton Bookkeeping, but their year end isn’t due till six months.
So, you know, I’m going to have to pay interest in penalties on my, uh, my GST if I don’t file it until the year end. But really the, the interest and penalties are not as high as if you have your year end and you have to make all these changes to your GST. Like, it’s, it’s such a small amount of interest that you would have to pay compared to getting it right on your, your year end. Yeah. Um, and not having to go back and refile again. Yep. Absolutely. Love everything. Um, so you want me, what are the disadvantages of filing the GST quarterly or annually? Sorry, monthly, quarterly, monthly. Uh, I think I touched on it a little bit, um, before, um, the other question. Um, yeah, so the main concern is the administrative burden that you have to do for filing it. Um, especially if you have an on a, um, an external bookkeeper and external accountant doing it for, you’re going to have to pay that person to file it, um, on a more regular basis than, um, the than what you like or what you need Edmonton Bookkeeping.
Um, but the thing about filing a quarterly, most of the business owners just think, Oh, I want my refund to come in. Um, sooner because I want it like, cause cause I need it. If you’re growing a business, your refund might just go up, might happen on just the first year of business. So Y, um, focus on that fact. Um, another thing is that especially if you’re not a zero rating, um, uh, GSD filer, um, again, if you are worried about interest and penalties on the GSD, there is an option for you to do your installment without having to file. If you’re an annual filer, as long as you file, um, you’ve paid your GST on time, even if you file a little bit later, then you should, um, eliminate the, the, um, the risk of having to have those interests and penalties on your GST.
Yeah. So can my accounting software help me with GST filing? Um, yeah, absolutely. Um, most of the accounting software is now have sales tax built into, um, into their, into their softwares. Um, but you gotta be careful because there’s, there are some entries were the software, um, is not able to handle the complexity of the transaction. So you might not be able to. Um, for example, if you’re using a general journal entry and you put a GSD on there, sometimes the, um, the sales filing, the sales tax filing, um, that is, um, in your software doesn’t necessarily understand what to do with the GSD that you put in there unless you tell it to or you assigned it. So there is some extra steps that you have to take. But definitely some of them. Um, here we have, in Alberta we have GSD. So it’s pretty simple just to have the 5% on Edmonton Bookkeeping.
Um, was it the transactions and it’s easy to set up that, um, on QuickBooks or Sage. Um, but yeah, you just have to, to make sure that you’re very, um, aware of the features and the weaknesses of the features on that software. Yeah. Yeah. Um, so you talked a little bit about installments, so is it okay to make installments without filing first? Yeah, absolutely. Um, again, if you’re, if you’re worried about having to pay interest on, um, your GSD, definitely you can make monthly installments or even quarterly installments based on, um, what you have on your books. And then just accordingly, when you have your year end, um, the thing about that is that you have, you would have paid the same amount of money that if, if you P sorry if you filed quarterly, but now when you do the annual and you did one filing the annual, uh, the annual return would be more, um, be more accurate and the CRA would be well to give you your refund, um, quicker because now it matches your Edmonton Bookkeeping.
Plus if you don’t get a refund, you’re not paying interest cause you’ve already made payments. Yeah. So, or if even if you don’t have enough, if you haven’t made enough installments, at least the interest won’t be like it’ll be even less. Yeah. Right. So, yeah. Um, so how can an updated financial statement help me with my GST filings? Again, if your books are updated and are done accurately, you should know how much you’re going to owe for GSD. So even if you file later, you already have an idea of what your GSD would be if you have an updated book. So it’s one of those things. I’m the, now your only main concern is the, um, the adjustments that your accountant will do. Right. So again, it, it eliminates the administrative burden that you have to do managing your sales stacks. Yeah. Good. Uh, so can my bookkeeper do the filing on my behalf?
Um, yeah, absolutely. There’s, there are many things that you can file your, uh, or many ways that you can file your GSD first and them you can, uh, when you set up your, your GST, usually CRA sends you a form with the electronic filing, you can use that code to file. Um, another thing is if you have your own CRA account, you can use, you can file your return using that. Um, if you have an external bookkeeper and they know your books pretty well, you can give them a consent. You can sign a consent form to them that gives them the authorization to file on your behalf. And normally a bookkeeper might have a, what we call the rep achy that enables them to represent you for, um, for tax purposes and they should be able to file, um, your GSD using their, um, client representative, uh, account.
Great. Um, and so what happens to my proprietorships GST account when I incorporate? So, um, if you were a proprietorship going to, uh, that, that that’s earning more, uh, to be able for you to incorporate, then um, you should be able to know that your GSD for your proprietorship is still separate than your incorporated business. So, um, you want to make sure that you close the GSD, otherwise you will, um, uh, sometimes they will self assess the GSC that you, um, that you will owe based on last year’s, um, filing. So you want to be careful with that cause most of the time, if you’re owing the previous years, chances are they’re gonna think you’re going to be owing the next year, even though you’re not operating as a proprietorship anymore. So you want to make sure that you filed your last year’s the return and also requests to close that she SD return.
If you’re not operating through your proprietorship anymore. That way, um, you only have one GSC account to, um, to manage and that will be your GST account for your corporation. Yeah. Great. Um, and so what happens when the CRA self assesses my GST return? So, uh, again, um, if, if you didn’t file your, your GSD, um, and you didn’t close it and this area, we’ll just assume that you were still, um, that you’re still operating as a proprietorship. So they would, uh, try and self assess your GSD return. No, most of the time it is amount owing and, um, they would put the balance that they think that you’re going to owe onto your account. So if the GSD account isn’t closed, most of the time they’ll do this every year. Um, and the more they do it, the more they think that your account is owing in that month or wing would go higher and higher Edmonton Bookkeeping.
This sometimes can lead into them holding your refunds personally for, um, for your personal tax account or your, um, or your sin number. So, uh, that’s what you want to avoid. Um, you don’t want to get, um, or you, you don’t want to deal with that at a later date. Um, most of them, they’re easy fixes. You just have to file a mail returns and, and they would do it. But, um, again, as time goes by, um, the among gets bigger and Sierra you might, um, take, take actions depending on the self assess GSDs that they did. So you want to make sure you file it, you close it, and then you just have one GSD account on your corporate docs, right, or corporate account. Yeah. So, um, I think that’s all we have, we have for today. I hope you find this informative. Um, if you, uh, if you have any questions or if you have any suggestions on what, um, as Edmonton bookkeepers want to talk about, please feel free to comment down, uh, down below. And please click like and subscribe if you like watching our videos. And we’ll see you guys next time on our next episode for always up to date.