While many business owners think that managing their sales tax will be very simple says Edmonton bookkeeping. Just because collecting sales tax from their clients, does not mean that filing their sales tax is just as easy. In fact, it such a complex issue that many entrepreneurs struggle with doing it correctly. There are many reasons why, and when entrepreneurs get informed on sales tax, they can avoid making errors that can end up costing them additional payments.
The first things that business owners should learn about filing their GST and their corporate year-end are that the two have very different filing deadlines. Many entrepreneurs believe that the GST is due to be filed at the same time as their fiscal year-end, but that is not true. In fact, there GST is due three whole months before their corporate year-end is due. This can lead to a variety of problems when filing sales tax.
The first problem that can arise from having a different filing deadline says Edmonton bookkeeping, is that an entrepreneur will have all of the right information on how much tax they owe the government until after they have completed their corporate year-end. However, since a business owner will have to file their GST before then, there is a great chance that an entrepreneur will file with errors. Depending on what those errors are, it may end up causing an entrepreneur to have to pay additional amounts and penalties.
In order to avoid paying penalties on incorrect tax filing, business owners have come up with the solution of filing their tax return at the same time as their corporate taxes says Edmonton bookkeeping. However, while this solution says one problem, it also creates another. A business owner who files their tax return late will incur interest charges on all of the taxes that they owe for the entire time. That they have been late. Depending on how much tax a business owner has collected through the year, this might be more than the penalties incurred from family incorrectly or could be less.
If an entrepreneur is using the strategy of filing their tax return months late, they actually can address the issue paying interest, in order to minimize the amount that they will be assessed. If they are making tax payments intermittently throughout the year, they can ensure that they are minimizing the amount of taxes that they end up owing the government. That way, business owners can create a plan to file late and pay minimal interest.
The only way that an entrepreneur will be able to come up with this strategy says Edmonton bookkeeping, is being aware of the complexities of sales tax and then working with experts to help ensure they create a plan that works for them. By doing this at the beginning of their fiscal year, business owners can great a plan that can give them peace of mind, so that they can spend their time and attention on activities that are going to help grow a successful business.
Edmonton Bookkeeping | What Entrepreneurs Need To Understand About GST
There are many complexities about sales tax that entrepreneurs need to understand in order to ensure that they are filing their sales tax properly, as well as permitting payment properly says Edmonton bookkeeping. If an entrepreneur thinks that it will be easy to manage, simply because sales tax is easy to collect, they may be setting themselves up for failure. In fact, there are lots of things that they need to keep in mind, that can help ensure that they are managing their sales tax correctly.
One of the first things that entrepreneurs should keep in mind, even as a small business owner is that as long as they are making over thirty thousand dollars in the year, they owe Canada revenue agency sales tax. Even if they are a proprietor, if they make over that threshold they should apply for a GST number immediately.
Once an entrepreneur has a GST number that they are using as a proprietor, they need to understand that there filing deadline is going to be June 15 every single year. It will be easy to remember because it is the same date that their personal taxes are also due. Says Edmonton bookkeeping.
However, once a business owner grows enough that it is in their best interest to incorporate, they cannot use the same GST number. Since a corporation is a separate legal entity, they need to apply for a new number and use that with their corporation. Then, it is important that they keep in mind that there filing deadline is going to change. Whatever date they choose for their fiscal year-end with their corporation, there sales tax deadline will be due three months after that date. Since the date, an entrepreneur might choose to have their fiscal year-end may be strategic, and the decision made with their Edmonton bookkeeping company, that will mean that a business owner might not know when their tax return needs to be filed until they have decided on that fiscal year-end dates.
Once an entrepreneur has grown their proprietorship, and save obtained a new GST number, it is very important that entrepreneurs know that they also have to close the previous GST number as well. If they do not do the paperwork to close it, the government will believe that the entrepreneur is still in business with that old number and think they just havenít filed taxes yet. This will because Canada revenue agency sends the business owner an assessment for the old GST number, giving them a taxable that they do not expect.
Not only is it important for entrepreneurs to understand how to manage their sales tax, but as their business grows, the requirements change. by being aware of this, entrepreneurs can ensure that they are managing their sales tax correctly. However, if they are feeling overwhelmed they can always contact and Edmonton bookkeeping company to help ensure that they are managing and filing it accurately.