When starting a business, entrepreneurs need to ensure that they are planning and preparing how they are going to remit and file their sales tax says Edmonton bookkeeping. The reason why, is because it is a very complex issue, and if entrepreneurs are not taking care throughout the year in order to have updated financial statements, they may submit their filing for sales tax at the end of the year, and end up paying penalties because it has been done incorrectly.
The most common reason why a business owner will file their GST incorrectly according to Edmonton bookkeeping is because the GST return is due three months before an entrepreneurís corporate year-end is due. Therefore, an entrepreneur has the choice between filing their sales tax return before completing their corporate year end, and risk doing it incorrectly, or filing their GST three months late when they complete their corporate year end, and risk paying interest charges on the GST that was not remitted.
Edmonton bookkeeping recommends that entrepreneurs opt for filing their GST late, and paying interest charges rather than paying penalties for doing it incorrectly. Typically, the interest charges are going to be much lower than the penalties will be. However, an entrepreneur can minimize the interest charges that they are owing to have to pay by making GST payments in instalments throughout the year, without filing. This way, the total amount that an entrepreneur will owe when they file their sales tax return three months late, is going to be less, and that means less interest charges as well.
The reason why Edmonton bookkeeping recommends paying their sales tax in instalments, and without filing, is because while filing on a quarterly basis might allow an entrepreneur to end up with a more accurate year-end filing, the year-end is still more accurate, and an entrepreneur will have to bear the financial administrative burden associated with filing quarterly. It can be more expensive, and still end up with an entrepreneur filing their year end incorrectly therefore, it is still within business ownerís best interest to remit their sales tax payments in instalments throughout the year, and file once a year, three months late so that they can file alongside their corporate year-end.
If entrepreneurs are aware of this ahead of time, they can ensure that they are planning how to pay and file their sales tax in order to minimize errors, and minimize the interest that they have to pay. Without having a plan already in place, entrepreneurs may end up having to pay so much more in interest as well as penalties. If business owners have any questions about how to get this plan in place, they can contact their Edmonton bookkeeping company such as always bookkeeping where there professionals are going to be able to help his is owners build a great financial plan that can help them ensure that they are managing their sales tax properly and efficiently.
Edmonton Bookkeeping | What Entrepreneurs Need To Know About Sales Tax
While most of the business owners bookkeeping requires careful preplanning, and keeping financial records updated says Edmonton bookkeeping, this is exceptionally true for an entrepreneur managing their sales tax. Not only is sales tax a very complex issue, but even entrepreneurs that have a lot of knowledge, and are skilled at using their accounting software can run into problems calculating or remitting their sales tax.
One thing that Edmonton bookkeeping likes to caution business owners on, is that even if they are using accounting software, and are quite knowledgeable about keeping their financial statements up-to-date, most accounting software programs out there do not have the ability to handle all of the complexities associated with sales tax. Business owners who are using their software in order to help them with this should be well aware of all of the various weaknesses that their software has especially when it comes to sales tax. If business owners are not aware of this ahead of time, they may end up making mistakes on their sales tax filing, that could come back as penalties that they have to pay.
One of the first things that business owners should keep in mind when it comes to filing their sales tax is when the deadline is. If they have a proprietorship, there GST filing will be do on June 15 every year. However, if a business owner owns a corporation, the GST filing is due three months after their corporate year-end. This means, that an entrepreneur will be expected to file their GST three months before they complete their corporate year end filing. This can create problems for entrepreneurs if they are not aware, or keeping their financial statements as up-to-date as possible.
Edmonton bookkeeping says that entrepreneurs who have previously owned proprietorship, and are moving to a corporation also need to be very aware that they are not able to use the same GST number that they used with their proprietorship. Because the corporation is a separate legal entity, they will have to get a new number. The business owner also needs to close the GST number of their proprietorship as well. If they do not close it, Canada revenue agency may self assess the GST return based on numbers is similar to the previous year that they filed. This might end up with an entrepreneur owing far more tax than they actually owe.
If business owners find that the complexities of sales tax is more than they can handle on their own, they can hire and Edmonton bookkeeping company such as always bookkeeping to help them out not only with their financial statements, but a bookkeeper can also file sales tax on behalf of the entrepreneur. Other than sending their bookkeeper a form, and signing a consent letter, their bookkeeper will be able to help ensure that there filing is accurate, and then represent the business owner and file GST on their behalf.
Entrepreneurs should be aware of all of the complex issues associated with filing and remitting their sales tax, so that they can ensure they have a plan in place, or that they hired Edmonton bookkeeping company to help them out with that. By being prepared ahead of time can help an entrepreneur avoid any issues that may come up if they were not planning for throughout the year.