Business owners end up having to pay a lot in taxes to Canada revenue agency, and Edmonton bookkeeping says that without understanding all of the complexities of sales-tax, it could potentially cause business owners to make mistakes. Errors in filing or remitting this tax can cause them interest charges and even penalties if done incorrectly.
The first thing that business owners should understand is when they file GST will depend on what type of business they own. If they own a proprietorship, they have until June 15 every year to file their sales-tax. However, if an entrepreneur owns a corporation, there GST is due three months after their corporate year-end, which is three months before their corporate year end is due to be filed as long as their business is making less than $1.5 million. If an entrepreneur is making over that threshold, they will be required to file their GST more often, typically quarterly.
Many problems can happen because GST is due three months before a business owner will complete their corporate year end. If they find that they have made a mistake on their GST once they complete their corporate filing, it may end up with the entrepreneur facing penalties for the mistakes. One way around this is to hold off on filing their sales tax until they have finished their corporate year-end says Edmonton bookkeeping.
If an entrepreneur chooses to hold off on filing their sales tax until theyíve completed their corporate year end, they will have to pay interest on all the sales tax they owe. They can greatly minimize the interest by remitting sales tax to the Canada Revenue Agency on a regular basis. Therefore, they can make payments in installments says Edmonton bookkeeping, and pay a small amount of interest on the rest of the sales-tax that they owe when they complete their corporate year-end. This is actually preferable to the penalties that they would have to pay if they made mistakes.
While an entrepreneur would want to remit payments in installments, there are also advantages that they will get from filing only once a year. Edmonton bookkeeping says that by filing only once he or even though they are remitting payments more often, will eliminate the administrative burden and cost associated with filing more often. Therefore, entrepreneurs can avoid penalties, minimize interest charges, and minimize their administrative costs by filing once a year. This way, an entrepreneur can ensure that they are managing their sales-tax efficiently and effectively.
The complexities associated with managing a provincial sales tax can cause a lot of problems for entrepreneurs says Edmonton bookkeeping if they are planning appropriately. By getting a professional opinion, and making plans to pay their GST in installments, while only filing once a year, and then filing that late while they file their corporate year-end, can help an entrepreneur avoid the penalties, and minimize interest charges that will allow them to manage their sales-tax efficiently.
Edmonton Bookkeeping | What Business Owners Want To Know About Sales-tax
There is a good reason why many entrepreneurs are confused when it comes to how and when to file their sales-tax says Edmonton bookkeeping. Their accounting software is not built to deal with all of the complexities associated with managing a sales-tax. Therefore, if entrepreneurs are not speaking to a professional, and being aware of all of the features and weaknesses of their accounting software, they may end up making errors.
The first thing that entrepreneurs should keep in mind when they are managing their sales-tax, is that not only can updated financial statements help them make great financial decisions in their business, but it can also help with their sales-tax filing. The reason why says Edmonton bookkeeping is if their books are updated and done properly, they will have accurate information about how much money they owe Canada revenue agency for their GST. If they do not have updated financial statements, they may have a misunderstanding about how much they owe, which would cause them to remit the wrong amount.
Not only will having financial statements that are not done properly, or up-to-date, it can lead to a business owner making mistakes when they go to file their GST three months before their corporate year-end is due. By having the wrong information or not up-to-date financial statements when they go to file their GST before their corporate year end, it could cause them to make mistakes on the filing, which carries penalties. Since GST is due to be filed before their corporate year-end, it is very important that an entrepreneur has updated financial statements so they will not file in the air, causing penalties.
If an entrepreneur has discovered that there are too many complexities and their feeling overwhelmed, they can contact their Edmonton bookkeeping company such as always bookkeeping to help them not only do their books properly but also file their sales-tax on their behalf. Bookkeepers will have a rep identification number that goal authorizes them to represent business owners for tax purposes as well as file GST. All an entrepreneur has to do is send their bookkeeper the form that Canada revenue agency sent to them when they signed up for their GST number, and then sign a consent form giving the bookkeepers the if they are ready to file on their behalf.
Another thing that entrepreneurs need to be aware of when they are filing their GST is if they are winding down their corporation, or a proprietorship in order to open a corporation, they need to ensure that they are closing down the GST number. If they do not, CRA might self assess them, giving them a larger tax bill than they actually owe.
When entrepreneurs are able to understand the complexities associated with managing their sales-tax, they can ensure that there keeping up-to-date financial statements, as well as contacting their Edmonton bookkeeping company to help them out with answering questions as well as helping an entrepreneur file. By doing that, business owners can avoid paying unnecessary penalties in minimizing interest on taxes that they owe.